SAFE Exam

If the final APR at settlement deviates by more than ______ from the initial APR on the preliminary Closing Disclosure on an irregular loan, an additional waiting period is triggered.

1/4%

How many days after being provided with a Loan Estimate does a consumer have to proceed with a mortgage loan before a lender may revise the Loan Estimate to change a settlement charge?

10 business days

As set forth by Regulation X, a servicer must not make the first notice or filing required by applicable law for any judicial or non-judicial foreclosure process unless a borrower's mortgage loan obligation is more than ____ days delinquent, the foreclosure is based on a borrower's violation of a due-on-sale clause, or the servicer is joining the foreclosure action of a superior or subordinate lienholder

120

Regulation B requires that applicants must be made aware of their right to receive an appraisal report created as the result of their mortgage loan application. This disclosure must be mailed or delivered to applicants not later than

3 business days after the lender receives a complete application

Model state law sets forth minimum qualifications for a state to issue an applicant an MLO license, including that the MLO needs to have demonstrated financial responsibility. Though state law may differ, model state law sets forth that an individual has not shown financial responsibility when there is a pattern of seriously delinquent accounts within the past

3 years

A borrower must be notified of the lender's approval of, counteroffer to, or adverse action within how many days after submitting a complete mortgage loan application?

30

If the amounts paid by a borrower at closing exceed the amounts disclosed on the Loan Estimate beyond the applicable tolerance threshold, the lender must refund the excess to the borrower and mail corrected disclosures reflecting that refund within how many calendar days after consummation?

60

When a mortgage loan meets the criteria of a higher-priced mortgage loan and the price reflected in the consumer's purchase agreement exceeds 20% of the seller's original acquisition price during the first ___ days, creditors are required to obtain a second appraisal.

91-180

Which scenario best describes a land contract?

A seller leases the property to the potential buyer with the provision that part of the rent payments be applied if a decision is made to buy before the lease expires.

Which statement is TRUE with respect to the state's authority to conduct examinations and investigations of the activities of a state-licensed MLO?

An MLO must not knowingly withhold or destroy records

The Financial Privacy Rule does NOT require which of the following?

An entity that services a mortgage loan must provide a quarterly privacy notice to its customers.

Under which federal legislation does the consumer have the right to receive a copy of the appraisal report on a dwelling that is to be used as collateral for a loan?

ECOA

An MLO hired a third-party independent processing company to perform processing functions on their loan files. Loan files for applicants who were not approved were disposed of in a dumpster at the back of the processing company's office. The processing company violated

FACTA

To protect themselves, lenders use plans for disbursing construction loan proceeds to guard against overspending by the borrower. With a ______, the lender pays the borrower a percentage of funds at a set time.

Fixed Disbursement Plan

Which statement is FALSE as it relates to TRID requirements for providing a Loan Estimate (LE) to an applicant?

If a consumer requests a pre-qualification only and provides 6 of 6 elements of a complete application, the MLO is not obligated to provide a LE.

Fannie Mae sets forth requirements for who must sign the security instrument that is part of a mortgage loan transaction. Which of the following is NOT one of the signature requirements?

Only persons who have an ownership interest in the security property and also have his/her income used in qualifying for the mortgage must sign.

Which federal regulation limits the length of time that adverse collection information may appear in a consumer's credit report?

Regulation V

HOEPA is an amendment to

Regulation Z

Which of the following Regulation ensures lenders use an annual percentage rate so that the borrowers have the information they need to make informed comparisons?

Regulation Z

What section of Regulation Z sets forth requirements for loans that meet higher-priced mortgage loan criteria?

Section 35

What Act/Rule consolidates four disclosure forms into two forms for closed-end credit transactions secured by real property?

TILA-RESPA Rule

Within two days of receiving an initial Loan Estimate (LE), Ron wants to switch to a cash-out refinance because he needs a few dollars more than he expected. Which of the following is a TRUE statement as it relates to the lender providing a revised LE?

This is a consumer-requested change that allows for a revised LE

______ a sale to be conditioned on the use of a particular title company chosen by the seller.

Under no circumstances does RESPA allow

To maintain an active license, an MLO must maintain a relationship with a company sponsor. Which statement is FALSE as it relates to the status of a license and company sponsorship?

When a license has an inactive status, the licensee may not apply for renewal including completing CE that can be counted toward renewal requirements.

Sherrie, a mortgage broker, also owns a title company. Is this business arrangement allowed by RESPA?

Yes, as long as the title company is legitimate and the arrangement is disclosed when the title company is being used in one of her transactions.

As set forth by the Loan Originator Compensation Rule, what is an acceptable condition on which to base a mortgage loan originator's compensation?

a fixed percentage of the loan amount

Certain loan programs are exempt from ability to repay requirements set forth under the Ability to Repay (ATR) Rule. All of these are loan programs that fall under this exemption EXCEPT for a(n)

adjustable-rate mortgage

The ____clause is the clause in a contract that gives the lender certain stated rights when there is a transfer of ownership in a property.

alienation

While there are no upfront or monthly mortgage insurance premiums required for VA-guaranteed loans, borrowers must pay a one-time variable funding fee at closing for guaranteeing the loan. The fee amount is based on all of the following EXCEPT the

appraised value of the property

All of the following are expenses associated with a mortgage loan that are most often shown on the Closing Disclosure as being paid directly out of an escrow account EXCEPT for

closing costs

A mortgage loan processor distributes a company business card with her name on it along with the unique identifier of the mortgage lender she works for. The loan processor hand writes a message on the card that states, "Call me to find out more about your loan options." This employee is

committing a prohibited act of misrepresentation in advertising which is a violation

Which of the following is the term described as a loan that is eligible for purchase by FNMA on the secondary market?

conforming

As defined by Regulation X, which loan type does NOT fall under the definition of a federally-related mortgage loan?

construction loan

During the closing, the transfer of title or interest from the seller to the buyer through a written instrument, such as a deed, is known as a

conveyance

According to the SAFE Act, which incident from 10 years ago would NOT automatically disqualify an applicant for a mortgage loan originator license?

conviction for felony assault

When an MLO receives an inquiry related to mortgage loan interest rates, a(n) ______must be provided to the inquiring consumer at the same time a rate quote is delivered.

corresponding annual percentage rate

When applying for an FHA-insured mortgage, what item must be brought to a satisfactory condition in order for the borrower to receive an approval?

defaulted federal student loan

A _____ is a form of pre-paid interest that a lender charges to increase the yield on a lower-than-market interest rate loan.

discount point

The state regulatory authority may issue an order suspending the license of a mortgage loan originator if the MLO

fails to provide loan records at the request of a state examiner.

For a Loan Estimate to be seen as provided in good faith, what cost cannot change from the Loan Estimate to the Closing Disclosure?

fees paid to a mortgage broker

A loan on a borrower's primary dwelling where the APR exceeds at least 1.5% of the applicable average prime offer rate for a first lien loan is known as a

higher-PRICED loan

Which of the following is an example of a subordinate loan?

home equity loan

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

index

All of these are prohibited loan terms for HOEPA covered loans EXCEPT

late fees

As defined in Regulation X, which implements RESPA, ____ means a person (other than an employee of a lender) that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan.

mortgage broker

Which of the following information is NOT required to submit a complete mortgage loan application that will trigger federal application disclosures?

most recent two months of bank statements

On the Closing Disclosure, applicable secondary market charges passed onto the borrower must be properly identified as

origination charges

The process of originating, processing, and closing a mortgage occurs in the

primary mortgage market

A ______ is a mortgage issued to the borrower by the seller of a home as part of the purchase transaction.

purchase money mortgage

Under the conditions for a loan to be a _____ mortgage, the loan must be a 30-year, fully amortizing mortgage and the lender must verify that the borrower has the ability to repay the loan.

qualified

A(n) ____clause is a clause in a contract that obligates a creditor to release property from a lien and conveys title to that part back to the debtor once certain provisions of the note or mortgage have been satisfied.

reconveyance

The provisions of the Real Estate Settlement Procedures Act are designed to do all of the following EXCEPT

remove limits on amounts that lenders can require borrowers to place into an escrow account.

The Closing Disclosure includes several required loan disclosures. Which of the following is NOT one of the loan disclosures that a lender provides on a Closing Disclosure?

right of lender to change the loan interest rate

Which of the following is NOT exempt from the restrictions set forth by Section 32 of Regulation Z for high-cost mortgage loans?

secondary lien secured by a residential investment property

Which activity is considered a significant stabilizing influence of the secondary mortgage market?

standardization of loan criteria

In compliance with ECOA, as lender Carrie looks over a borrower's loan application and is deciding whether or not to make the loan, she may NOT consider the

that the borrower's income is partially derived from the receipt of public assistance.

A changed circumstance for the purpose of providing a revised Loan Estimate that can be used in determining good faith can be any of the following EXCEPT

the MLO neglected to inform the borrower and include the additional cost necessitated by a review appraisal

With a HECM, the amount a person is able to borrow will depend on all of the following EXCEPT

the loan-to-value ratio

Title insurance protects the title from

the time the land was first registered to the time of closing

If an advertisement states that a certain product, service, or loan is available, the product, service, or loan must be made available

to a reasonable amount of qualified applicants

Documentation of assets includes ____ months of bank statements (all pages) to verify available funds.

two

What loan type is NOT reportable under the Home Mortgage Disclosure Act?

vacant land loans

The purpose of an appraisal is BEST described as helping the lender determine

whether the collateral is sufficient security for the loan