SAFE

What is the maximum amount of time that a bankruptcy can remain on a credit report?

10 years

How long must TILA Disclosures be kept?

2 years (exceptions - Loan Estimate is kept 3yrs and Closing Disclosure is kept 5 years)

If a loan application is Approved, under ECOA rules and regulations, when MUST a copy of the appraisal be provided to the borrower?

3 business days

A borrower is refinancing his home. How much time does Reg Z give him to change his mind?

3 days rescission period

What is the minimum down payment for a conforming purchase loan?

3% Rationale: Most conventional loans requirea 5% down payment; however, FNMA and Freddie Mac offer a 3% down payment option

Under ECOA rules and regulations, how many days does the lender have to provide a copy of an appraisal report, once requested by the borrower?

30 days

How old must a borrower be to qualify for a Reverse Mortgage?

62 years old

What is the maximum amount of time that NEGATIVE info can remain on a credit report?

7 years

Under ECOA rules and regulations, how many days does the borrower have to request a copy of an appraisal report if the application was denied?

90 days

What is the provision in a mortgage enabling a lender to demand full repayment if the borrower DEFAULTS on the loan?

Accerleration Clause

What is the provision in a mortgage enabling a lender to demand full repayment if the borrower TRANSFERS the loan?

Alienation Clause

Where do the funds for FHA loans come from?

Approved Lenders Rationale: FHA insures loans made by approved lenders

Which is NOT a type of mortgage?

Bi-monthly Rationale: bi-weekly mortgages, construction mortgages, and reverse mortgages are all types of mortgages available to meet a borrower's specific needs. There is not a bi-monthly mortgage product

Trying to convince a homeowner to SELL his home by implying that another race/ethnicity is moving in the neighborhood is called?

Blockbusting/panic selling

Which regulations is designed to help meet the Credit Needs of the Communities in which it operates?

CRA - Community Reinvestment Act

The portion of principal and interest due on a loan that is written off when deemed to be uncollectible is known as?

Charge-off Rationale: This is called a charge off

What type of loan may commonly require two separate closings?

Construction Rationale: construction loans often require one closing prior to beginning construction and another permanent financing after the home's completion. This is not required, but is optional if the loan is construction to permanent financing. All other transactions listed would only have a single closing

What loan is most likely to utilize a single closing as a new construction loan?

Construction-only loan Rationale: a construction to permanent loan would require two closings. HECM and Graduated payment mortgages would not be tied to construction, so the construction only loan (which would use a single closing as there's only one transaction) is the only option

What does CFPB stand for?

Consumer Financial Protection Bureau

Which government agency backs VA loans?

Department of Verterans Affairs Rationale: The department of verterans affairs guarantees the lender that, in the event a VA backed loan forecloses, the lender will be partially reimbursed for losses sustained

ABC Bank charges unreasonable prepayment penalties to?

Discourage payoff of highly profitable loans. Rationale: Unreasonable prepayment penalties may lock borrowers into abusive loans that cannot be easily refinanced when their credit score improve. Prepayment penalties may be thousands of dollars and require payment as long as five years into the loan; therefore, lenders discourage payoff of the highly profitable loan

What two laws created the CFBP?

Dodd Frank Act and Consumer Finance Protection Act

Which regulation requires the lenders to "BE EQUAL" when extending credit to borrowers?

ECOA - Regulation B

What is another name for Annual Percentage Rate?

Effective Rate

What is the value remaining in property after all liens and debts have been paid?

Equity

What type of mortgage allows the lender a share of the earnings, income, or profits generated by the mortgaged real estate?

Equity participation mortgage Rationale: An equity participation mortgage, also known as a participation plan, allows the lender to participate in earnings, income, or profits generated by the mortgage real estate property. in some cases, the lender participates by becoming a co-owner of the property.

Which Regulations has the primary function of preventing Identity theft?

FACT Act

Which regulation has SECTION 114 rules?

FACT Act

What government lender "insures" mortgages?

FHA - Does not lend money

Steering is part of which regulation/Law?

Fair Housing Act

What law prohibits discrimination in the sale and rental of a residential property on the basis of race, color, religion, handicap, sex, familial status or national origin?

Fair Housing Act Rationale: The Fair Housing Act prohibits discrimination against renting and selling property.

Blockbusting is part of which regulation/Law?

Fair housing Act

Redlining is part of which regulation/Law?

Fair housing Act

What federal legislation requires that all printed advertising include the Equal Housing Opportunity logo?

Fair housing act ( NOT TILA) QUESTION RATIONALE The Fair Housing Act requires that the Equal Housing Opportunity logo be displayed in all printed material and the term "equal housing lender" must be used when broadcast over the airwaves.

Conforming Loans follow the guidlines of which regulators?

Fannie Mai and Feddie Mac

Which mortgage requires principal and interest payments at regular intervals until the entire debt is satisfied?

Fully amortized mortgage Rationale: A fully amortized loan is one for which total payments over the life of a loan pay off the entire balance of principal and interest due at the end of the term. This is also known as self-liquidating

Which type of mortgage is structured so that borrowers make smaller payments in the early years and larger payments later in the term?

Graduated payment mortgage: A graduated payment mortgage ( also called a 2/1 buydown or temporary buydown) is one where the interest rate is initially lower, and the corresponding rates are therefore monthly payment increase over time on a pre-set schedule. It's not an ARM, as the fluctuations are preset in advance and not dependent on market factors

Which regulations requires the lender to cancel PMI when the loan reaches 78% LTV?

HPA - Homeowners Protection Act

What does HOEPA Stand for?

Home Ownership and Equity Protection Act

PITI divided by gross monthly income is referred to as what?

Housing Ratio or Front End DTI

Which element of an ARM is a statistical report that is generally reliable indicatior of the approximate change in the cost of money and may be used to adjust interest rates?

Index Rationale: An index is a statistical report that is generally a reliable indicator of the approximate cost of money. Future interest rate adjustments for ARM loans are based on the up and down movements of the index

What does not fall under the jurisdiction of Title VIII of the Civil Rights Act?

Installment loan for a vehicle Rationale: The Fair Housing Act, Title VIII of the Civil Rights Act, governs all forms of housing, but not any type of personal property.

Which is an example of a document that can be used to pledge real estate as collateral to secure a promise to repay a debt?

Mortgage Rationale: A mortgage is one type of document that secures the collateral. The note is the promise to pay

An HECM reverse mortage and an adjustable rate mortgage are both examples of?

Nontraditional loans Rationale: a non traditional loan is anything other than a 30 year or less fixed rate loan

What is another name for Interest Rate?

Note rate or Nominal Rate

Frank intentially withheld information that would disqualify him from obtaining a loan. Frank has committed mortgage fraud as a result of?

Omission Rationale: Omission is when someone intentionally omits or withholds important information that would disqualify him or her from obtaining a loan

What is another name for blockbusting, an illegal activity, according to the Fair Housing Act?

Panic Selling Rationale:Blockbusting is also known as panic selling. This is when a homeowner panics due to someone causing fear regarding changes in the neighborhood, which leads them to thinking they need to sell before the neighborhood "goes down."

Under the Fair Housing Act, which activity is NOT deemed illegal?

QUESTION RATIONALE Adverse action, such as denying a loan, is not illegal if the borrower is not credit-worthy. Blockbusting, redlining, and steering are always illegal in every circumstance.

What does Fannie Mae call the process of purchasing existing properties with the intention of immediately reselling the property for a profit?

QUESTION RATIONALE Fannie Mae considers this activity flipping. This can be legal or illegal depending on how it is done.

What is not a protected class recognized by the Fair Housing Act?

QUESTION RATIONALE Receipt of income from a public source is covered by ECOA, but is not mentioned in the Fair Housing Act.

"X" is the letter used to describe which Regulation?

RESPA

Which regulation prohibits fee splitting?

RESPA

Which regulation prohibits kickbacks?

RESPA

RESPA is the Acronym used to describe which Law?

Real Estate Settlement Procedures Act

Refusing to make loans on a property in a certain neighborhood for discriminatory reasons is called?

Redlining

HOEPA Loans are part of which larger regulation?

Reg Z/TILA

High Cost Loans are part of which larger regulation?

Reg Z/TILA

High Priced Loans are part of which larger regulation?

Reg Z/TILA

MDIA ACT is part of which larger regulation?

Reg Z/TILA

Mortgage Disclosure Improvement Act is part of which larger regulation?

Reg Z/TILA

Section 32 loans are part of which larger regulations

Reg Z/TILA

Section 35 loans are part of which larger regulation?

Reg Z/TILA

With what type of mortgage does the lender make regular monthly payments to the borrower based on the equity the homeowner has invested in the property?

Reverse mortgage Rationale: With a reverse mortgage, a qualified person who is 62 or older can mortgage his or her home to a lender and in return gets a monthly check from the lender

Which regulation requires the creditor to verify the VALIDITY of any change of address received?

SECTION 114 of the Fact Act

Trying to convince a homeowner to PURCHASE in a particular neighborhood based on his race, religion or ethnicity is called?

Steering

What is the fraud scheme where a borrowers uses someone else's name to purchase the property, but that person WILL NOT be living at the property?

Straw borrower

What loan may allow the borrower to state an income WITHOUT verification based on credit score and LTV?

Subprime Subprime mortgages allow for stated income with required minimum credit scores. Minimum credit scores are re-evaluated and new minimums are set periodically.

What is the payment method used in reverse mortgage that allows the homeowners to receive a monthly check which living in the property ?

TENURE method

If an appraiser intentionally underestimates an appraisal value for the purpose of keeping the values in that are low, that appraisal would be violating which law?

TILA Rationale: TILA requires an appraiser to evaluate an appraisal based upon a fair assessment. Appraiser conduct is generally regulated by TILA / Reg Z, whereas equal lending of credit would be governed by ECOA. Intentionally underestimating a property value ly deflates the values of the community.

Which regulation established the 3-day right of rescission rule?

TILA/REG Z

What law deals with credit, APR & advertising of consumer loans?

TILA/REGULATION Z

Which can be found in a note?

Terms and repayment provisions Rationale: A note is an instrument that shows a promise to pay a specific amount of money to a specific person within a specific time frame. As the basic evidence of debt, a note shows who owes how much to whome and under what terms

A consumer calls to ask about a loan product. How does TILA require you to quote an interest rate to him?

The APR as well as the interest rate Rationale: TILA requires that the APR be quoted along with the interest rate

In a fraud for property scheme, it is likely that?

The borrower seeks land ownership Rationale: In fraud for property, is it likely that the only perpetrator is the borrower who seeks housing and/or cash from the loan. In addition, this fraud involves a single loan in which the borrower intends to repay

What information would be exempt from the privacy requirement of the Gramm-Leach-Bliley Act?

The loan amount that appears on a recorded mortgage QUESTION RATIONALE Information that the company believes to be lawfully public - such as mortgage loan information in a jurisdiction where that information is publicly recorded - is not restricted by the Gramm-Leach-Bliley Act.

Which is TRUE about nonconforming loans?

They generally cost a homeowner more in fees Rational: non-conforming loans means they do NOT meet Fannie mae/Freddie Mac standards and therefore CANNOT be sold to FNMA or FHLMC on the secondary market. Nonconforming loans generally have higher fees than conforming loans, but are not necessarily predatory. They can be difficult to sell on the secondary market, and cannot be purchases by GSE's

Why are documents recorded with the county government?

To provide notice of who holds an interest in a piece of property Rationale: recording is the act of filing a document in the county where the property is located so that it will be places in the public record so that the public is able to determine who holds an interest in any piece of property

PITI + Monthly debt divided by gross monthly income is referred to as what?

Total Obligation ratio - back end ratio

If any triggering terms are used in an ad, all disclosures must be made EXCEPT

Total of closing costs Rationale: When triggering terms are used in an ad, TILA requires the disclosure of amount of the down payment, terms of loan repayment, and annual percentage rate. The total closing costs are not required to be stated in the ad.

What government lender loans money to fund purchases in rural areas?

USDA/Dept. of Agriculture

What Type of mortgage requires a non-refundable funding fee?

VA Loan

What government lender "guarantees" mortgages?

VA Loan - they dont loan money either

Who is the target borrower for a VA loan?

Veterans Rationale: VA-guaranteed loans meet the housing needs of eligible veterans

Broker Tome advertises low interest rates and includes the accurate APR. However, when qualified applicants come in, Tom tells them that the smarted loan for them would be one with a slightly higher rate and more fees. Did tom do anything wrong?

Yes, Tom could be accused of using a bait and switch tact to earn more Rationale: While tom did include the real APR in the ad, he most likely used that low rate to lure people in, then convinced them to accept different terms, which earned him more commission. This is an example of an iilegal bait and switch tactic

With a $50,000 loan at 8% interest, which would NOT include a balloon payment due at the end of the term?

amortized over 20 years Rationale: A fully amortized loan would not require a balloon payment

When an appraiser "gives a mortgage loan originator what's needed" on the appraisal report, the consumer usually ends up

borrowing too much on the property QUESTION RATIONALE The cooperation between the appraiser and the loan originator in "giving what's needed" on the appraisal report leads to the consumer borrowing too much, - meaning, one where the amount owed on the property exceeds the property's value.