Exam 3

The estimate for most settlement charges shown on a Loan Estimate must be available for at least ____ business days. a) 3 b) 7 c) 10 d) 14

c) 10

A reverse mortgage must be repaid if the home is unoccupied by the borrower for how long? a) 3 consecutive months b) 6 consecutive months c) 12 consecutive months d) 18 consecutive months

c) 12 consecutive months

A lender has how many days to notify the borrower of an underwriting decision? a) 3 b) 10 c) 30 d) 60

c) 30

Qualifying guidelines on an FHA loan are a) 28% housing ratio and 36% total debt to income ratio. b) 29% housing ratio and 41% total debt to income ratio. c) 31% housing ratio and 43% total debt to income ratio. d) 36% housing ratio and 41% total debt to income ratio.

c) 31% housing ratio and 43% total debt to income ratio

What federal legislation requires the term "equal housing lender" to be used in any advertisement that is broadcast over the airwaves? a) Equal Credit Opportunity Act b) Fair Credit Reporting Act c) Fair Housing Act d) Truth in Lending Act

c) Fair Housing Act

6) While it is unlawful to consider race when underwriting a loan, what federal legislation requires that this information be included on the loan application? a) Equal Credit Opportunity Act b) Fair Credit Reporting Act c) Home Mortgage Disclosure Act d) Truth in Lending Act

c) Home Mortgage Disclosure Ac

Which law enacted mandatory cancellation of PMI under certain circumstances? a) Truth-in-Lending b) RESPA c) Homeowner's Protection Act d) Equal Credit Opportunity Act

c) Homeowner's Protection Act

Which regulation ensures that some borrowers have the right of rescission for three business days after a loan contract is signed? a) Regulation B b) Regulation X c) Regulation Z d) Title VIII

c) Regulation Z

In which federal law would you find the definition of a nontraditional loan? a) Homeowners Equity Protection Act b) Real Estate Settlement Procedures Act (RESPA) c) Secure and Fair Enforcement for Mortgage Licensing Act d) Truth in Lending Act

c) Secure and Fair Enforcement for Mortgage Licensing Act

Section 502 loans are a program of which government entity? a) Federal Housing Administration b) Housing and Urban Development c) USDA Rural Development d) Veterans Administration

c) USDA Rural Development

When calculating the debt ratio, the calculation that best represents the front ratio is monthly a) debt divided by gross monthly income. b) debt divided by net monthly income. c) housing debt divided by gross monthly income. d) housing debt divided by net monthly income.

c) housing debt divided by gross monthly income

Which would be considered a toxic feature under the qualifying mortgage rule definition? a) adjustable rate b) defeasance clause c) interest only payments d) short tem

c) interest only payments

A closing agent is responsible for all of these tasks EXCEPT a) following instructions according to the sales contract. b) gathering all necessary documentation to close. c) issuing the final loan approval. d) preparing the Closing Disclosure for seller

c) issuing the final loan approval.

Market value can best be defined as a property's a) appraised value for property tax purposes. b) listing price. c) most probable selling price. d) most recent selling price.

c) most probable selling price.

19) To comply with the FACTA, a mortgage loan originator should a) consider all legal forms of income when evaluating a loan application. b) note the race of all loan applicants on the LAR. c) place all loan applications and documentation in a secure place when not working on them. d) send loan applicants an adverse action notice within 30 days.

c) place all loan applications and documentation in a secure place when not working on them.

The state regulatory authority may suspend or revoke an MLO license for failure to a) consider opening an additional location in a low-income area. b) display a unique NMLS identifier for each branch office. c) provide proper disclosures to a borrower. d) request a copy of the annual report

c) provide proper disclosures to a borrower.

16) RESPA applies to all a) business loans with collateral. b) commercial real estate loans. c) real estate credit transactions for one- to four-family dwellings. d) real estate purchase transactions.

c) real estate credit transactions for one- to four-family dwellings.

Under the SAFE Act, a state has all of the following authorities EXCEPT a) to deny, suspend, or revoke licenses. b) to issue cease and desist orders. c) to waive the requirement for fingerprints for an initial license application. d) to write rules and regulations.

c) to waive the requirement for fingerprints for an initial license application.

ABC Mortgage Company has been accused of inappropriately calling two consumers on the National Do No Call Registry. What is the maximum fine ABC could incur for each violation? a) $11,000 b) $40,000 c) $32,000 d) $34,000

b) $40,000

If any triggering terms are used in an ad, which fact is EXEMPT from the disclosure requirement? a) amount or percentage of down payment b) APR c) terms of repayment d) total closing costs

b) APR

Which federal act created the Consumer Financial Protection Bureau? a) Bank Secrecy Act/Anti-Money Laundering Act b) Dodd-Frank Act c) Fair Credit Reporting Act d) Gramm-Leach-Bliley Act

b) Dodd-Frank Act

All of these are required of the state regulatory authority EXCEPT a) approve or deny mortgage loan originator license applications. b) approve prelicensing and continuing educational course offerings and course providers. c) establish procedures for appropriate enforcement and/or disciplinary actions. d) examine or investigate licensees in a systematic manner based on identified risk factors or on a periodic schedule.

b) approve prelicensing and continuing educational course offerings and course providers.

Which property would NOT be eligible for an HECM loan? a) condominium b) cooperative c) duplex d) manufactured home on permanent foundation

b) cooperative

Which factor is NOT taken into consideration when determining the mortgage amount for an HECM? a) age of the youngest borrower b) credit history of the borrower c) current interest rate d) lesser of appraised value or FHA insurance limit

b) credit history of the borrower

45) 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? a) discount b) index c) margin d) prime rate

b) index

What type of scam entails homeowners who are encouraged to refinance their property over and over until little or no equity remains? a) double sold loan b) loan flipping c) property skimming d) reverse equity

b) loan flipping

The APR on an initial Loan Estimate for a 30-year fixed rate loan is 5.99%, and the APR on the final Closing Disclosure is 6.25%. After redisclosure, how long must the borrower wait to close the loan? a) one business day b) three business days after redisclosure c) seven business days after redisclosure d) There is no

b) three business days after redisclosure

Which federal law requires financial institutions to file reports of cash transactions exceeding a daily aggregate amount of $10,000? a) BSA/AML b) RESPA c) SAFE d) TILA

a) BSA/AML

Which federal law was intended to provide some remedy for the illegal practice of redlining? a) Community Reinvestment Act b) Fair and Accurate Credit Transaction Act c) Financial Services Modernization Act d) Homeowners Protection Act

a) Community Reinvestment Act

A mortgage broker rents office space from a title company at a discount in exchange for referring customers for settlement services. Which federal law does this arrangement violate? a) RESPA b) SAFE Act c) TILA d) It does not violate any federal law.

a) RESPA

A mortgage broker rents office space from a title company at a discount in exchange for referring customers for settlement services. Which law does this arrangement violate? a) RESPA b) SAFE Act c) TILA d) It does not violate any law

a) RESPA

4) The Privacy Rule of the Gramm-Leach Bliley Act requires financial institutions to provide the borrower with a Consumer Privacy policy a) before disclosing information to non-affiliated third parties. b) each time the servicing is transferred. c) one business day prior to closing. d) three business days prior to closing.

a) before disclosing information to non-affiliated third parties.

Which class IS specifically protected by the Fair Housing Act but IS NOT protected by the Equal Credit Opportunity Act? a) disability b) marital status c) religion d) sex

a) disability

The Dodd-Frank Act definition of a qualified mortgage includes all of these features EXCEPT a) interest-only loan offerings. b) limits on debt-to-income ratios. c) no excessive upfront points and fees. d) no terms beyond 30 years.

a) interest-only loan offerings.

All of these examples illustrate an individual NOT engaged in the business of a mortgage loan originator EXCEPT a) Helen provides the financing for the sale of her own residence. b) Ivan provides mortgage loan financing for his child, Ivan Jr. c) Jennifer acts as a mortgage loan originator fulfilling her duties as an employee of a non-profit organization d) Kirk provides financing for the sale of multiple properties he owns repeatedly and with habitualness.

d) Kirk provides financing for the sale of multiple properties he owns repeatedly and with habitualness.

According to the Interagency Guidance on Nontraditional Mortgage Product Risks, nontraditional mortgage loans may be LEAST risky for borrowers with a) high debt to income ratios. b) high loan-to-value. c) low credit scores. d) low debt to income ratios.

d) low debt to income ratios.

Which of these is NOT included as a protected class by the federal Fair Housing Act? a) national origin b) race c) religion d) sexual orientation

d) sexual orientation

To address the problem of property flipping, appraisers must analyze the transfer history of a property for the previous a) three months. b) one year. c) eighteen months. d) three years.

d) three years.

In a loan closing, hypothecation occurs. This is described as a) assigning the mortgage from the broker to the lender. b) assigning the mortgage from the broker to the lender. c) the transfer of title through the deed. d) using property as collateral without surrendering use or possession of it.

d) using property as collateral without surrendering use or possession of it.