General Mortgage Knowledge 06
A person, who brings a borrower and lender together, is knows as a: loan officer. mortgage lender. mortgage broker. loan intermediary.
mortgage broker.
The entity that services a loan, basically takes on the duties of the: mortgagee. mortgagor. trustor. obligor.
mortgagee
Loan documentation fraud may include any of the following except: the MLO. the lender. the borrower. the realtor
the lender.
What are the qualifying ratios on an FHA loan when manually underwritten? 28/36 31/43 29/41 33/38
31/43
The Real Estate Settlement Procedures Act requires all of the following except: a Good Faith Estimate. a Settlement Statement. a Special Information Booklet. race, ethnicity and gender information.
race, ethnicity and gender information.
When are the funds disbursed for an owner-occupied residential refinance? After the loan documents are recorded At the time of the loan closing Within seven days after the application After the three business-day right of rescission period has expired
After the three business-day right of rescission period has expired
For loans purchased by FNMA or FHLMC, the conforming limit for 2017 is: $322,700. $333,700. $424,100 $300,700.
$424,100
After the crisis of the Great Recession according to VA underwriting when can a borrower repurchase again after a short sale? 7yrs from the credit report date 5yrs from the credit report date 2yrs from the credit report date 3yrs from the credit report date
2yrs from the credit report date
How much is charged for the up front mortgage insurance on an FHA loan (2012)? 1.25% 1.50% 1.75% 2.25%
1.75%
Under RESPA what is the dollar fine that can be imposed for each instance of a referral fee kickback or unearned fee? $5,000 $7,000 $10,000 $15,000
10000
borrower's name is on the National Do Not Call list. At what point after the loan closes and is sold to another company must the MLO stop contacting the borrower to solicit new business? Immediately After three months One year 18 months
18 months
An active duty service person, or a veteran obtaining his/her first VA loan would pay what amount for the VA funding fee (2017)? 2% 2.15% 2.40% 2.25%
2.15%
After the crisis of the Great Recession according to FHA underwriting when can a borrower repurchase again after a foreclosure? 7yrs from the credit report date 5yrs from the credit report date 2yrs from the credit report date 3yrs from the credit report date
3yrs from the credit report date
After the crisis of the Great Recession according to Conventional underwriting when can a borrower repurchase again after a short sale? 7yrs from the credit report date 5yrs from the credit report date 3yrs from the credit report date 4yrs from the credit report date
4yrs from the credit report date
After the crisis of the Great Recession according to Conforming and High Balance underwriting when can a borrower repurchase again after a Chapter 7 bankruptcy? 7yrs from the discharge date 5yrs from the discharge date 2yrs from the discharge date 4yrs from the discharge date
4yrs from the discharge date
After the crisis of the Great Recession according to Conventional underwriting when can a borrower repurchase again after a foreclosure? 7yrs from the credit report date 5yrs from the credit report date 2yrs from the credit report date 3yrs from the credit report date
7yrs from the credit report date
Which of the following would NOT be a red flag of the possibility of loan fraud? Sales price is substantially below market value. Name and address on the deposit check is different from the buyer. A REALTOR® is involved in the transaction. Deposit check was not cashed.
A REALTOR® is involved in the transaction
Borrowers who qualify for conforming loans would be referred to as: D paper borrowers. B paper borrowers. C paper borrowers. A paper borrowers.
A paper borrowers.
With an FHA loan, which of the following is true concerning qualifying ratios? Automated underwriting may approve a borrower with ratios higher than 29/41 A borrower with a very high credit score may get a loan with 55% debt ratio A borrower with a very low credit score can only borrow to a 31% debt ratio The maximum ratios in any circumstance are 31/43
Automated underwriting may approve a borrower with ratios higher than 29/41
Under a trust deed and note, what interests do the borrower and lender hold in the property which is used as collateral? Borrower - legal title, Lender - equitable title Borrower - legal title, Lender - a lien Borrower - equitable title, Lender - legal title Borrower - lien, Lender - legal title
Borrower - legal title, Lender - a lien
When a borrower asks for an FHA loan, which of the following is false concerning the borrower's credit? Collections will not affect the credit score If the credit score is less than 640, the borrower may still get a loan With excellent credit, the borrower will not get a better mortgage rate If the borrower has credit issues, but can convince an underwriter of credit worthiness, s/he may still get a loan
Collections will not affect the credit score
The loan officer suspects the social security number in an FHA application is incorrect, what must he/she do? Contact the Social Security administration to verify it. Proceed with the loan, because FHA will verify the social security number. Proceed with the loan and HUD will verify it. Give the borrower five days to bring in the verification.
Contact the Social Security administration to verify it.
According to the FACT Act which of these could be considered a failure to secure private information? Burning old files in a steel drum behind the office once a month Hiring a document destruction company to remove all old files Shredding documents and throwing them in the trash Disposing of documents into the trash bins for the janitorial service to empty nightly
Disposing of documents into the trash bins for the janitorial service to empty nightly
What is the amount of money that VA guarantees called? Escrow Endorsement Encroachment Entitlement
Entitlement
Which of the following does NOT directly influence interest rates? Early payoffs Foreclosure Fraud Federal Reserve Bank
Early payoffs
What loan requires an upfront mortgage insurance fee? Conventional FHA VA Subprime
FHA
FHA loan limits change from time to time, and are based on the: average selling price of homes in a county. FNMA maximums minus 20%. average income level of the county. FHA median house prices
FHA median house prices.
Which of the following is true concerning income with an FHA loan? Borrowers may state income on any FHA loan Income is not verified on FHA loans Income must always be verified Borrowers may only state income on an FHA ARM loan
Income must always be verified
Another way to refer to non-conforming loans would be: investment. FHA. Jumbo. VA.
Jumbo.
What part of a monthly payment cannot change during the fixed term of the mortgage loan? Monthly Interest Property Tax Title Free Hazard Insurance
Monthly Interest
Which of the following would keep you from getting an FHA loan? Not having a down payment No college education Not having a spouse Self-employment
Not having a down payment
RESPA is the acronym for which of the following? Realty Ethics Settlement Policy Act Real Estate Sales Procedures Act Real Estate Settlement Practices and Act Real Estate Settlement Procedures Act
Real Estate Settlement Procedures Act
When purchasing a home with an FHA loan, which of the following is true concerning employment? Self-employment is not allowed Salaried employment is always verified The employer must have been in business for 2 years Employment is not verified for an FHA loan
Salaried employment is always verified
SRP stands for: Standard Rate Product. Servicing Release Pricing. Service Release Premium. Standard Rate Premium.
Service Release Premium
The best description of LTV is a percentage of what? The amount borrowed compared to the sales price or the appraised value The down payment compared to the sales price or appraised value The total of the borrower's monthly debts compared to his/her total monthly income The loan amount compared to the borrower's total assets
The amount borrowed compared to the sales price or the appraised value
The borrower wants to get an FHA loan, but a judgment appears on the credit report. Which of the following represents how the judgment will be treated? As long as the judgment was over one year ago, it has no bearing. With a letter of explanation, the borrower may be approved for an FHA loan. The judgment must be paid in full before the borrower can get an FHA loan. If the judgment was over two years ago, it will have no bearing.
The judgment must be paid in full before the borrower can get an FHA loan.
What are FHA loan limits based on? The sales price after the down payment and upfront mortgage insurance The sale price of property The lesser of the sales price or appraised value after the down payment and before upfront mortgage insurance The appraised value less the down payment after the upfront mortgage premium
The lesser of the sales price or appraised value after the down payment and before upfront mortgage insurance
On an FHA loan, which form of a gift is NOT allowed? The seller gifts the down payment Gift from a grandmother Gift from an aunt and uncle An employer gift which does not have to be repaid
The seller gifts the down payment
How does the secondary market help lenders? They sell loans. They insure loans. They guarantee loans. They purchase loans.
They purchase loans.
Which type of loan application requires a residual income analysis to be performed? FHA loan Jumbo VA loan Conventional
VA loan
In selling a home which has an FHA loan, when can the FHA loan be assumed? FHA loans cannot be assumed When the seller indemnifies the lender against default When the buyer signs a release document When the loan documents say the FHA loan is assumable
When the loan documents say the FHA loan is assumable
A balloon loan is best described as: a loan that is paid off in one lump sum. a loan that has a floating rate. a loan that exceeds the loan limit. a loan that is paid annually.
a loan that is paid off in one lump sum.
On an FHA loan, the discount points can be paid: only through having them added to the loan. only by the borrower. only by the seller. either by the borrower and/or the seller
either by the borrower and/or the seller.
The main difference between FHA and VA is that VA: has lower discount points than FHA loans. has no prepayment penalty. guarantees the loan whereas FHA insures the loan. allows assumptions.
guarantees the loan whereas FHA insures the loan.
A state law that requires payment of interest on an escrow account is: consistent with RESPA and could therefore be enforced by the state. in direct violation of RESPA and would therefore be overturned in court, inconsistent with RESPA and Federal law would take precedent. a violation of RESPA interest is not paid on escrow accounts.
in direct violation of RESPA and would therefore be overturned in court,
The Real Estate Settlement Procedures Act does not apply to: higher loan amounts of $1 million or more on residential properties. loans used to finance the purchase of 25 acres or more. refinance transactions. purchase loans that are secured by a first mortgage on the property.
loans used to finance the purchase of 25 acres or more.
Regulation Z applies to all: business loans with collateral. commercial real estate loans. residential real estate mortgage transactions. agricultural purchase transactions.
residential real estate mortgage transactions.
Monthly payments must generally be calculated by assuming that the loan is repaid in ________ during its term. substantially equal monthly payments substantially equal annual payments substantially equal bi-weekly payments unequal annual payments
substantially equal monthly payments