Test 5

An originator's unique identifier must be shown on all but which of the following documents?

business signage

Which of the following documents connects the promissory note to the collateral?

mortgage

A loss payee clause protects whom?

the lender in the event the property is damaged by fire or other risks

When a mortgage or deed of trust contains a power of sale clause:

the lender may foreclose without first obtaining a court order

Annual PMI is determined by multiplying:

the loan amount and the mortgage insurance rate

For ARMS characterized by figures like "3/1," "5/1," "7/1," or "10/1," the first number represents _____, and the second number represents _____.

the locked term; the adjustment frequency

Conforming loan guidelines generally include DTI ratios of

28% / 36%

What is the name of the rule that increases requirements for the consideration of a borrower's ability to repay?

ATR/QM Rule

Servicers are required to respond to a _____ from a borrower within five days.

qualified written request

Mortgage insurance premiums are required for:

All FHA loans

Before accepting a loan that is a high-cost mortgage, borrowers must complete counseling with a counselor approved by:

HUD

According to the federal guidances on nontraditional lending, all of the following loan programs are considered to be nontraditional, except:

Hybrid ARM

Government monitoring information regarding applicant demographics is found where?

1003

Businesses that conduct telemarketing are required to access the Do-Not-Call Registry every _____ in order to maintain an updated database of people on the Do-Not-Call List.

31 days

Which of the following prefixes indicates the purchase of flood insurance is mandatory?

A and V

A conditional refinance provision might be a feature of what type of loan?

Balloon

What was the first law that Congress enacted to combat predatory lending?

HOEPA

In most cases, a mortgage loan requires monthly payments. All of the following loan types require monthly payments, except:

Home Equity Conversion mortgage does not require repayment as long as the borrower continues to live in the home

Jesse James was convicted of felony assault eight years ago. Billy Kidd was convicted of fraud 17 years ago. Both have made application to their state to be licensed as mortgage loan originators. What effect will their past records have on their license applications?

Jesse may be granted a license; Billy will not

Under the GLB Act, a customer relationship is established:

Upon application

Which of the following is true with regard to VA loans and qualified mortgages?

VA loans are safe harbor qualified mortgages

The FCRA places all of the following limitations on the inclusion of negative information in credit reports, except

a limit on bankruptcies that are more than seven years old

A lender is trying to lure customers with advertisements for "Minimum Monthly Payments to Meet Any Budget!" This advertisement must also include an equally prominent statement in close proximity which alerts consumers that:

a balloon payment may result from minimum periodic payments

The Peterson family is buying a new home and their new P&I payment totals $1,800 per month. Their annual tax bill is $3,000, and their annual homeowner's insurance premium is $720. The family's annual income totals $98,520. What is their housing (i.e., front-end) ratio?

add up housing expenses (flood insurance, homeowners insurance, and other monthly housing costs) divide by gross monthly income

For the purposes of providing a Loan Estimate, a "business day" is:

any day on which the creditor's offices are open to the public for carrying out substantially all business functions.

Title searches and title insurance:

are covered under the provisions of RESPA and are considered settlement services

An independent contractor is required to:

become state-licensed as a loan originator

An ARM that allows a borrower the opportunity to convert the loan to a fixed rate has a:

conversion option

Nontraditional credit includes all of the following, except:

car loans

The Nationwide Multistate Licensing System and Registry was developed and is maintained by:

conference of State Bank Supervisors and the American Association of Residential mortgage regulators

Two types of loans used to finance the construction of a property are:

construction-to-permanent and stand-alone construction

The primary reason for adopting special appraisal requirements for HPMLs was to:

discourage the use of inflated appraisals to flip properties

Underwriting of non-qualified mortgages must compute periodic payments that:

do not take periodic rate caps into consideration

When dealing with third-party service providers, banks and nonbanks must establish risk management programs that include all but which of the following elements?

establishing compensation programs that withhold payment for services until the service provider can demonstrate compliance with the law

The first step in the closing process is:

funding

Before engaging in a refinance transaction, consumers and mortgage professionals should consider whether the transaction:

has a tangible net benefit to the borrower

If a borrower sells personal property in order to raise money for down payment, and the underwriter questions whether the value of the items sold is realistic, the underwriter may:

have an appraisal done on the item, or ask for further documentation

A covered loan under HOEPA is commonly known as a:

high-cost mortgage

Qualifying ratios consist of which two separate calculations?

housing expense ratio and total debt ratio

The mandatory waiting period between issuance of disclosures and consummation may be waived:

if the consumer requests a waiver due to a bona fide financial emergency

en a lender on a loan in default is forced to go to court and request an order of foreclosure, this is called:

judicial foreclosure

A mortgage broker structures a loan priced with two points in borrower credit. He suggests that, based on the limited amount of cash the borrower has on hand to close, it may be best to take a slightly higher rate and use the premium generated to subsidize the closing costs. After consideration, the borrower agrees and moves forward. This is:

legal and ethical

Annual mortgage insurance for USDA/RHS guaranteed loans are:

less expensive than those charged for FHA loans and for private mortgage insurance.

The Qualified Mortgage Rule applies to which of the following?

loans secured by non-owner-occupied homes

The Telemarketing Sales Rule prohibits calls:

made to consumers who have specifically asked a mortgage professional not to contact them

The primary purpose of ECOA is to:

make sure credit is available to all creditworthy applicants

In order to comply with the advertising rules found in Regulation Z, creditors that advertise rates and payments for mortgages must:

make the required disclosures with equal prominence and in close proximity to the advertised rates or payments.

what will the adjusted rate be?

margin + index

When a creditor revises a Loan Estimate, it must deliver the revised disclosure to the loan applicant:

no later than four business days prior to consummation

Frank Stein is a loan originator for a county housing finance agency whose function is to help meet the affordable housing needs of the residents of the state. Is Frank required to be licensed under the S.A.F.E. Act?

no, he is exempt from the requirement to be licensed

Once a state licensing agency has provided private or confidential information to the NMLS, what is the status of the information?

privacy and confidentiality requirements continue to apply

Second appraisal requirements for higher-priced mortgage loans were put in place in an attempt to curb the practice of:

property flipping

A balloon mortgage that includes a conditional refinance provision allows the borrower to:

request modification of the terms of the loan when it reaches maturity

The practice of intentionally targeting borrowers in poor or underserved areas with expensive high-cost loans is known as: Reverse redlining

reverse redlining.

Which of the following claims, if used in an advertisement, is not a violation of Regulation Z or the MAP Rule?

stating that a borrower can take advantage of an opportunity to refinance an ARM with a fixed-rate loan

A _____ is an individual who, in exchange for a fee, allows his or her qualifying information to be used on an application for a loan he or she has no intention of repaying.

straw buyer

The Comparisons table on the Loan Estimate provides all of the following information, except:

the amount paid for private mortgage insurance before the LTV ratio reaches 78%

In calculating an adjustment for an ARM, the fully-indexed rate is determined by adding:

the margin to the index

The priority of liens is based on:

the order of recordation, unless a tax lien or subordination agreement changes the order

Under ECOA, when is a notice concerning the right to obtain a copy of the appraisal due to a consumer?

within three business days of loan application

Which of the following inquiries is considered lawful when asked for the purposes of credit approval as governed by ECOA?

years on the job