NMLS SAFE EXAM

D. Special information booklet

. Which of the following is NOT a RESPA mandated disclosure? A. HUD-1 Settlement Statement B. Good faith estimate C. Regulation Z Disclosure D. Special information booklet.

RAM Reverse Annuity Mortgage

> Must be 62 yrs or older > LTV is based on your age - the older you are the higher the LTV > Borrowers must demonstrate the ability to pay taxes and insurance on property. Borrowers who do not qualify under

ARM Loan

> Start Rate (Teaser) - Lower introductory rate > An Index - which is tied to the loan (LIBOR, T - Bill, COFI) LIBOR -London Interbank Offered Rate COFI - Cost of Funds Index MTA -monthly Treasury Average T-bill - Treasury Bill

USDA Loan

>100% financing > Only offered in rural areas (Towns with a population of 35,000 or less) > Guarantee fee is 1% - which can be financed in the loan which means the max LTV is 101%

LAR Loan Application Register - Keep records for 3 years

Every year lenders are required to report their loan activity - in this report they must give the disposition of each and every loan application taken. Report is due March 1 The report is called an

3 Years

Evidence of compliance with the TILA must be retained for at least ___ years after the date of disclosure

Interest Only

Examples of nontraditional sub prime mortgage product era, sometimes referred to as exotic loans:

LIBOR IntercontinentalExchange London Interbank Offered Rate

A benchmark rate that some of the world's leading banks charge each other for short-term loans

Mortgage Fraud

A crime in which the intent is to materially misrepresent or omit information on a mortgage loan application in order to obtain a loan or to obtain a larger loan

Loan Modification

A permanent restructuring of the mortgage where one or more of the terms of a borrower's loan are changed to provide a more affordable payment

Straw Buyer

A person who buys something on behalf of someone else in order to circumvent legal restrictions or enable fraud

Hard Penalty

A prepayment penalty assessed if the mortgage is prepaid within a certain time period

Soft Penalty

A prepayment penalty that applies to refinancing only is called a

CBA Controlled Business Arrangement

A real estate brokerage office that provides related services through subsidiary companies that operate within the brokerage office

Property Flipping

A recently acquired property is resold for a considerable profit with an artificially inflated value

COFI Cost of Funds Index

A regional average of interest expenses incurred by financial institutions, which in turn is used as a base for calculating variable rate loans

Silent Second Mortgage

A secondary mortgage placed on an asset that is not disclosed to the lender of the original loan

TPO Third Party Organization

A separate individual or organization other than the two principals involved. Provides an auxiliary product not supplied by the primary manufacturer to the end user

B. Their race.

Based upon Fair Lending Laws, you are only permitted to ask a loan applicant: A. If they intend to continue employment once they have children B. Their race. C. Their religion D. If they plan on having children.

Loan Application

Basis for entire loan package A legal document

TILA Truth in Lending Act

Is part of the Federal Consumer Protection Act and lays out disclosure requirements, advertising requirements as well as rights of rescission and penalties for violation

The Margin on an ARM

Is set by the lender and never changes

Fraud

Is the intentional use of deceit that deprives someone of money, property or a legal right

Section 10 (X)

Is where you would collect the Government Monitoring Information that is required by HMDA

Equal Credit Opportunity Act = 25 letters as well but if you can remember that or your b=2 e=5 then you can probably remember 25 months as well.

Record keeping for ECOA - 25 months B Equal B -2nd letter of alpha and E 5th letter of alpha

SRP Service Release Premium

When loans are sold in the secondary market, the entities who purchase them pay a premium over and above the outstanding balance is called

Consummation

When the borrower becomes contractually obligated to the creditor.

Subordination Agreement

When two mortgages are on a property, this specifies which mortgage takes precedence

B. On the GFE and Settlement Statement

Yield spread premium is disclosed to the borrower: A. Only on high cost loans B. On the GFE and Settlement Statement C. Only on purchase transactions. D. On the TIL disclosure promissory note.

> Name > Date of Birth > Address > Identification number ( social or passport number or alien id card )

You are required to know who your clients are - thru the use of a CIP - Customer Identification Program

C. Within 30 days.

Your loan applicant has a low credit score, when must you advise him of the status of his application? A. Within 3 days B. Within 3 business days C. Within 30 days. D. Within 30 business days.

B. Balloon mortgages

________ are mortgages that do not fully amortize due to repayment terms of the loan. A. Reverse annuity mortgages. B. Balloon mortgages. C. Graduated payment mortgages. D. Home equity line of credit.

B. Finance charges

________ must be reported to borrowers on the truth in lending disclosure. A. Note rates. B. Finance charges C. Payment address D. Servicer's name

ABA Affiliated Business Arrangement

exists when you own 1% or more of the referring party or you directly or indirectly influence the selection of a settlement service provider.

Mortgagee Clause

Lender must be added to the insurance policy as the "LOSS PAYEE"

HUD-1

The final disclosure of settlement costs provided to the borrower at closing

Finance charge

Which of the following is defined as the cost of credit expressed as a dollar amount?

TRID TILA RESPA Integrated Disclosure

" Know before you Owe'" rule which Integrated RESPA and TILA's upfront disclosures and is commonly know as

3 Days

Appraisals are required and must be provided to borrowers how many days before closing

MBS Mortgage Backed Securities

Are a product of the secondary market

Contract of Deed

Complete financing and sales contract agreed upon by seller and seller with no note attached

2/1/6 Cap

(2) Represents the first adjustment max (1) Represents all other adjustment periods (6) max adjustment over term of loan

5/1 ARM

(5) is number of years fixed (1) Adjusts annually

Va Loans

- 100% Financing NO minimum investment on behalf of the borrower - Loans ARE Assumable (assumer does NOT have to be a veteran but does have to meet the lenders guidelines) - Qualifying Ratio is 41% - Only for veterans of armed forces ( active, reserve, national guard) - Sellers can contribute up to 4% - No Mortgage Insurance!! -NOV - Notice of Value IRRRL - Interest rate reduction refinance loan

Regulation Z Advertising Rules:

1.) Only advertise the terms available in the credit plan being offered 2.) The ad must state the APR ( if triggers are used) 3.) If the APR can increase - you must state this in the ad "may increase or subject to change" 4.) A note rate can be in the ad but NOT MORE CONSPICUOUS than the APR

1.) 90 day exception after an application is taken 2.) 18 month's from a transaction

2 exceptions to the Established business relationship rule for Do Not Call List

Fraud for profit - think insider Fraud for housing - think consumer

2 types of fraud:

(2) Represents how much the loan can adjust in any adjustment period (6) Represents how much the loan may adjust over its life

2/6 Cap

Right of Rescission

3 Day Right that is given to any Borrower who seeks to refinance their primaryresidence. Borrowers may only have 1 primary residence.

1.) name 2.) Address 3.) ss# 4.) gross monthly income 5.) est property value 6.) amount of mortgage they are seeking you may not require a borrower to provide additional documentation

6 items that would make it an application under the TILA/RESPA Integrated Disclosure rules, lenders and brokers are require you to provide a Loan Estimate if they have the following information:

Closing Disclosure

>This document clearly itemizes all of the closing costs in the transaction and is used at closing. > Borrower must be provided the form 3 days prior to close ( in person -considered received the day provided, if mailed its considered received after 3 days from date placed in mail) >If you have to provide a corrected form you must wait 3 days prior to consummation ( Consummation means when the borrower becomes contractually obligated to the creditor.)

3/7/3 rule

>give the form within 3 business days after application and only collect the cost of a credit report in 1st three days >must wait 7 days from application to close >the Loan Estimate has very specific tolerance requirements -if anything changes that is considered to be a "qualified change of circumstance" lenders are allowed to issue another form but must wait 3 days to close.

FNMA Fannie Mae Loan Application

A 1003 document requires originator to provide unique loan originator identifier provided by NMLS phone number, company ID and company address

Interest only

A Construction loan requires payment of:

HECM Home Equity Conversion Mortgage

A FHA insured reverse mortgage that allows the conversion of equity in a home to cash

$1,000

A borrower accepts a$200,000 loan that requires a rate adjustment of 0 .75%. There are 3 adjustments that affect the cost they include: -0.25% in points for choosing to escrow Taxes & Insurance. 0.375% points for LTV and 0.375% points for the property type. How much cash will the borrower have to bring in order to cover the discount points being charged?

$1,800 x 26 / 12 = $3,900 $10,000 / 12 = $833.33 Total Income: $4,733.33 x 31% = $1467.33 max house payment.

A borrower and co-borrower apply for a loan with bi-weekly income of $1,800 and annual income of $10,000 respectively. What is the maximum house payment they would they qualify for assuming a qualifying housing ratio of 31%?

C.) Ask the borrower to obtain a statement of terms

A borrower applies for a loan and while in process notifies the MLO they have just financed the purchase of a car for their daughter who plans to make the payments. The payments do not show on the borrower's current credit report. What action should the MLO take? a. Don't report the information since it is not on credit b. Advise the UW and let them handle it c. Ask the borrower to obtain a statement of terms d. Turn the loan down

C. Initiate an Adverse Action Notice

A borrower is denied a loan request due to the credit score not meeting lender's guidelines, what must be done next? A. Borrower verbally informed. B. Mail a copy of credit with instructions to dispute scoring. C. Initiate an Adverse Action Notice D. Make counter offer of loan terms

Safe Harbor Presumption

A borrower is unable to challenge whether the lender met its "ability to repay" obligations

Negative Information

A borrower must be notified within 30 days of a creditor placing negative information on their credit file. This allows the consumer the ability to dispute the information in a more timely manner - lenders must resolve disputes within 30 days.

Fraud for Housing

A borrower provides false information about employment, income or assets in order to qualify for a loan.

$571 x 360 =$205,560 - $120,00 loan amount = $85,560 Finance Charge. Then divide $85,560/$120,000 = 71.3%

A borrower take as 30 year loan of $120,00 at 4% interest, the Princ and Int payment is $571. Calculate the TIP required to be disclosed to the borrower?

(take the finance charges given and divide into the loan amount to get % of interest paid over the term as a percentage of the loan amount ) $85,560/120,000 71.4%

A borrower takes a loan of $120,000 at 4% interest for 30 years. The total finance charges of the loan, if the loan fully amortizes is $85,560. What is the TIP which will be disclosed on the Loan Estimate?

c.) If sufficient use the income on the tax return

A borrower who is employed as a waiter applied for a mortgage loan. He told the MLO that he did not report all his tip income on his tax return. What step should the MLO take ? a.) Contact the employer to verify the tip income b.) Tell the borrower to re-do his taxes correctly c.) If sufficient use the income on the tax return d.) Use the tip income anyway

Capacity

A borrowers income assets

Sham Business Arrangement

A business arrangement set-up for the purpose of paying illegal kickbacks or referral fees

Contract of Deed

A complete financing agreement and sales contract in one executed document

AUS Automated Underwriting System

A computer generated loan underwriting decision, using completed loan application information

Redlining

A discriminatory practice by which banks refuse or limit loans or mortgages within specific geographic areas

Reconveyance

A document issued by a mortgage holder indicating that the borrower is released from the mortgage debt and transfers the property title from the lender

SARs Suspicious Activity Report

A document that financial institutions must file with the Financial Crimes Enforcement Network following a suspected incident of money laundering or fraud.

Approval letter

A document that states the loan amount a lender is willing to make a borrower

Discount Point

A form of pre-paid interest which effectively increases the yield on the loan above the amount of the stated interest rate

Mortgage Lock-In-Rate

A guarantee a lender will deliver a specific combination of interest rate and points if the mortgage closes by a specified date

Equity Stripping

A lender lends an amount that is more than a borrower can afford, the lender can then foreclose and sell the house, stripping the borrower of any equity earned over the years

B. TIL Disclosure and promissory note

A loan contains prepayment penalties, which of the following documents would a borrower review to confirm this? A. Deed of trust B. TIL Disclosure and promissory note C. HUD-1 and the GFE D. Mortgage Servicing Disclosure

HELOC Home Equity Line of Credit

A loan in which the lender agrees to lend a maximum amount within an agreed period and is also an open-ended mortgage transaction that is secured

Air Loan

A loan on a fictitious home that does not exist on the land

Blanket Loan

A loan that encumbers multiple properties is called a

Higher Priced Mortgage Loans

A loan that has an APR that exceeds the APOR by 1.5% on a 1st mortgage 2.5% on Jumbos and 3.5 on junior mortgages

2/1 ARM Hybrid

A loan with a fixed rate for the first two years that has a rate that changes once each year for the remaining life of the loan and is considered a _______ mortgage

Balloon Mortgage

A mortgage in which a large portion of the borrowed principal is repaid in a single payment at the end of the loan period and does not amortize

Temporary Buydown

A mortgage loan option through which a home buyer gets his or her interest payments temporarily reduced for the first few years of the loan

Hard Money Loan

A specific type of asset-based loan financing through which a borrower receives funds secured by real property which the LTV is 65-70%

Associate

A spouse, parent, or child of such person; A corporation or business entity that controls, is controlled by, or is under common control with such person; An employer, officer, director , partner, franchisor, or franchisee of such person; or Anyone who has an agreement, arrangement, or understanding, with such person, the purpose or substantial effect of which is to enable the person in a position to refer settlement business to benefit financially from the referrals of such business.

HUD-1 Uniform Settlement Statement Section 2603

A standard form used to itemize services and fees charged to the borrower by the lender or broker when applying for a loan for the purpose of purchasing or refinancing real estate

Amortization

A term that refers to the process of allocating the cost of an intangible asset over a period of time. It also refers to the repayment of loan principal over time.

Interest Only Mortgage

A type of mortgage in which the mortgagor is only required to pay off the interest that arises from the principal that is borrowed

B). A Liability

A young couple is applying for a loan for a new home purchase. A portion of their down payment is a loan from a Grandparent for $25,000. The money was already given to them and placed in their account three months prior to the loan application. The loan payments won't start for one year, how should the $25,000 be reported on the mortgage application? A. Asset B. A Liability C. Gift of funds D. Not reported at all

Acceleration Clause

Accelerated loan repayment if property is in default

GLB Gramm Leach Bliley Act

Act that requires all Financial Institutions have a written SAFEGUARD Plan to protect clients NPI. Written plan has to be technical, administrative, and physical.

Trigger Term

Advertised term that requires additional disclosures

C. A new good faith estimate must be provided

After reviewing the trade off table, the borrower decides to accept the loan with the lower rate and the higher settlement costs. What is the next step for this loan? A. Borrower must circle and initial the loan program in the tradeoff table. B. The good faith estimate must be officially withdrawn. C. A new good faith estimate must be provided. D. All of the above.

B. Prevent escrow overages

Aggregate escrow analyses are used to do which of the following? A. Prevent escrow shortages B. Prevent escrow overages C. Ensure the loan is properly amortized. D. Reduce the burden on the servicer.

Forbearance

Agreement between the lender and the borrower to delay foreclosure

A. Age

All of the following are violations of the Fair Housing Act EXCEPT A. Age B. National Origin C. Disability D.Religion

Credit report

All of the following documents would show the Company name, MLO name and NMLS ID #, except?

C. A mortgage broker pays a fee to a title company for services actually performed.

All of the following violate RESPA except? A. A lender retains a portion of a fee paid to a surveyor for completion of a survey report. B. A mortgage broker agrees to pay a builder for the referral of the builders clients to the broker. C. A mortgage broker pays a fee to a title company for services actually performed. D. A mortgage broker accepts a fee for sending its customers to a specific real estates sales associates.

D.) based on LIBOR

All of the following would be associated with a Subprime loan with the exception of which of the following: a.) Limited Documentation b.) High prepayment penalties c.) balloon payments d.) based on LIBOR

Tri-Credit Report

All three credit bureau reports

Certify construction is complete.

An Appraiser must visit the property and complete a form 442 (FHLMC) or a 1004D (FNMA) to

Parent, Spouse , or Child in a position to refer business

An Associate is defined as a

(D) wait to see if there is anymore suspicious activity

An MLO takes an application and becomes suspicious of the applicants Soc Sec. #; what should the MLO do? (A) contact the police (B) deny loan (C) call soc sec admin and verify Soc Sec # (D) wait to see if there is anymore suspicious activity

CRA Community Reinvestment Ac

An act enacted in 1977 with the intention of encouraging depository institutions to help meet the credit needs of surrounding communities

CMT Constant Maturity Treasury Rate

An adjustment for equivalent maturity, used by the Federal Reserve Board to compute an index based on the average yield of various Treasury securities maturing at different periods

Advertising Disclosure

An advertisement must be presented "clearly and conspicuously" to keep from being deceptive, unfair, or otherwise violate a Commission rule

GAO Government Accountability Office

An agency of the U.S. government that monitors and audits government spending and operations

CLTV Combined Loan to Value

An amount in addition to the Loan to Value, which simply represents the first position mortgage or loan as a percentage of the property's value

Kickback

An illegal fee or rebate paid to someone in order to gain that person's decision or recommendation for the award of business

Negative Amortization

An increase in the principal balance of a loan caused by making payments that fail to cover the interest due

15 Days

An initial servicing transfer notice must be provided to a borrower _________ days prior to transfer of servicing on a loan. 15 30 45 60

Lien

An interest or encumbrance held by a creditor in a debtee's real or personal property

Hypothecation

Another term for pledging collateral

NPI Nonpublic Personal Information

Any "personally identifiable financial information" that a financial institution collects about an individual in connection with providing a financial product or service that is not public

D. Customer Information

Any non-public, personal information a customer offers to a financial institution (paper, electronic, otherwise) that the institution or its affiliates handles or maintains is considered to be: A. Confidential information. B. Safeguarded information. C. GLB information D. Customer information.

Ignore that the applicant is pregnant

At application the MLO notices the borrower is pregnant; they should:

● Licensed in the state the consumer resides in. ● Deposit any funds from the consumer in a client trust account

Attorneys who provide MARS are exempt from advance fee collection as long as they are

PMI Private Mortgage Insurance

Automatically drops off at 78% LTV or 22% equity position as required by Homeowners Protection Act ( HPA )

B. Size and complexity

Because Red Flags is Risk Based, your program must be appropriate to the ________ and _______ of your business or organization and the nature and scope of its activities. A. Size and integrity B. Size and complexity C. Scale and integrity D. Size and proportion

A. 90 days within receiving the Notice of Adverse Action

Bob Jackson has recently been turned down for a loan request. He has paid for the appraisal and wants a copy of the appraisal. How many days days the consumer have to request a free copy. A. 90 days within receiving the Notice of Adverse Action B. Within 65 days of application C. Within 30 days after Bob receives his notice of his right to receive the appraisal. D. Within 15 days of the appraisal being performed.

Yes, Bob meets both ratios

Bob's gross monthly income is $4000. He currently pays $1400 rent per month for a 3 bedroom house and has no other obligations except a $300 car payment. Based on this information, would Bob qualify for a $1,200 PITI FHA loan?

Permanent Buydown

Borrower chooses to pay additional "discount points" to buy down the interest rate for the life of the mortgage note

CRA Credit Reporting Agency

Businesses that maintains historical information pertaining to credit experience on individuals or businesses

TILA Truth in Lending Act

Businesses who regularly extend credit to consumers for personal or family use where installment payments are made with finance charges must comply with

> 1-4 family dwellings > Condos > Manufactured housing (must be placed on a lot that the consumer owns)

CFPB has oversight on RESPA Protects borrowers on Real Estate Loans:

1.) Experian 2.) Trans Union 3.) Equifax

CRA's - Credit Reporting Agencies supply the reports - there are 3 repositories:

5 years

Concerning FHA loans, a mortgage insurance premium is required until/for: A. One year. B. Seven years. C. Five years. D. 78-80% LTV, as long as the loan is no more than 0x30 in the last twelve months.

Conforming Loan

Conforms to terms and conditions set by government

No, they can be paid by either but not by both.

Can an MLO be paid by both the client and another source for originating the loan?

Rental Income

Can only count 75% of the gross rents minus any mortgage payments. The other 25% is known as the 'maintenance / vacancy factor'

Soft Prepayment Penalty

Cannot refinance without penalty but you may sell

Encrumbrance

Claim against property held by one who is not the legal owner

Credit Bureau

Clearinghouse that exchanges information with credit grantors about a borrowers bill paying habits and history

FEMA Federal Emergency Management Agency

Coordinates the response to a disaster that has occurred in the United States

C). Contract for Deed

Courtney would like to purchase a home from Chuck. Because of her prior credit problems, she is unable to obtain conventional financing. Chuck decides to sell Courtney the property, but he will retain the title until the purchase price of the property is paid in full. What type of agreement have they executed? A. Purchase contract with note. B. Purchase contract with note and mortgage. C. Contract for deed. D. Purchase contract and deed of trust.

FNMA Federal National Mortgage Association

Created 1968 works with Fannie Mae to increase affordable lending

Red Flag Rule

Created by the (FTC) to help prevent identity theft, enacted 2008

FDIC Federal Deposit Insurance Corporation

Created in 1933 this insures deposits against bank failures to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices

GNMA Government National Mortgage Association

Created in 1968, goal to expand affordable housing under HUD

Defeasance Clause

Creditor can obtain title without foreclosure process

TILA Document Retention 1026.25

Creditor must retain the Escrow Closing Notice and the Partial Payment Disclosure, both of which are new disclosures, for two years

Specific Lien

Debts tied to single property Highest priority lien holder has first rights to collect First in time, first in line

1004 Market Conditions Addendum

Designed to enhance the transparency of the market trends, conditions and conclusions made by the appraiser

COE Certificate of Eligibility

Determined by obtaining a Veterans report of separation from service DD214

ATR Ability to Repay Regulation Z 1026.43(c)

Determines whether the creditor makes a reasonable and good faith determination at or before. consummation that the consumer will have a reasonable ability to repay the loan according to its terms

Mortgage Lenders make loans and Mortgage Brokers arrange loans

Difference between mortgage lender and mortgage broker

Actual Note

Direct knowledge that one has of the property

Mortgage Serving Disclosure Statement

Discloses to the borrower whether the lender intends to service the loan or transfer it to another lender

1.) CHARM Booklet - Consumer handbook on Adjustable Rate Mortgages 2.) Program disclosure for whatever ARM they show interest in accepting

Disclosures for Variable or Adjustable Rate Loans:

Satisfaction of Mortgage Letter

Document generated and signed by a mortgage lender, acknowledging that the borrower has paid off the mortgage loan in full and the mortgage is not a lien on the property

3 Years after loan is closed

Document retention for ATR/Qm Rules is

4506T

Document that contains a tax transcript

Pre-Qualification Letter

Estimate of loan amount a borrower can get with limited financial information

CFPB Consumer Financial Protection Bureau

Dodd- Frank created the

Non-Conforming Loan

Does not meet Freddie Mac or Fannie Mae guidelines

Types of Identity Theft

Dumpster Diving Skimming Phishing Change of Address Pre-Texting

Creditor's name /Payment /Date opened /Balance /Highest credit amount /History / Status of account

Each debt report lists the following information:

D. All of the above

Each of the following statements are correct regarding High Cost (section 32) loans, a. Negative amortization is prohibited b. The interest rate of the loan cannot be increased if the loan goes into default c. Balloon payments are prohibited for loans of less than five years D. All of the above

Notices of Transfer of Loan Servicing

Each transferor servicer and transferee servicer of any mortgage loan shall provide to the borrower a notice of transfer for any assignment, sale, or transfer of the servicing of the mortgage loan

TILA Truth in Lending Act

Enacted 1968 promotes the informed use of consumer credit by requiring disclosures about terms and costs and standardizes the manner in which costs with borrowing are calculated and disclosed

MARS Mortgage Assistance Relief Services

Enacted 2010, directed at companies that offer loan modification services to consumers for a fee; it requires certain disclosures and prohibits upfront fees.

FCRA Fair Credit Reporting Act Section 1681b

Enacted in 1970 that regulates the collection of credit information and access to your credit report to ensure fairness, accuracy and privacy of the personal information contained in the files of the credit reporting agencies.

ECOA Equal Credit Opportunity Act

Enacted in 1974,makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age

HOEPA Home Ownership and Equity Protection Act

Enacted in 1994 as an amendment to the Truth in Lending Act (TILA) to address abusive practices in refinances and closed-end home equity loans with high interest rates or high fees

FACTA or FACT ACT Fair and Accurate Credit Transactions Act

Enacted in 2003, contains provisions to help reduce identity theft and allows consumers to request and obtain a free credit report once every twelve months from each of the three nationwide consumer credit reporting companies

Patriot Act

Enforced by FinCEN part of the Treasury Dept. - Financial Crimes enforcement network

Title XIV, 14 Dodd-Frank

Establishes minimum standards for all mortgage products Requires all originators to be properly qualified, registered and licensed

Appraisal

Estimate of a properties value

C. The GFE is a preview and estimate of the settlement costs and the HUD-1 reflects the actual costs of the settlement.

Explain the difference between HUD-1 and GFE. A. HUD-1 shows an estimate of the settlement costs and the GFE offers the actual costs at settlement. B. The GFE and HUD-1 are the same documents with different titles. C. The GFE is a preview and estimate of the settlement costs and the HUD-1 reflects the actual costs of the settlement. D. Brokers and lenders are not required to provide the GFE or the HUD-1.

Waving Right of Rescission

Extenuating circumstances such as "bona fide personal financial emergency

B.) Conventional Loans

FNMA and FHLMC securitize what types of loans? A. JUMBO loans B. Conventional loans. C. Sub Prime loans. D. VA loans.

Backwards Application

Fabrications of a borrower's income and assets to meet the loan's minimum application requirements through inflated income, fictitious assets, and altered credit reports.

Ways to obtain a Loan Application

Face to Face Internet Mail/Fax Telephone

Ballon Mortgages

More popular in higher rate times for subprime borrowers as they shorter term provided a lower rate and payment

B. Up to 30 years incarceration and a 1000K fine

False information submitted by an applicant on a federally covered loan, the applicant's penalty may include? A. License revocation B. Up to 30 years incarceration and a 1000K fine C. A misdemeanor charge. D. Applicant placed on FBI watch list.

Trigger Terms

Features of a credit plan that draw consumers to the loan. Any mention of a number in your ( rate, payment, term, cost of credit) would require your disclosure of the APR and other costs of loan

OCC Office of the Comptroller of the Currency

Federal agency that serves to charter, regulate and supervise the national banks and the federal branches and agencies of foreign banks, head is appointed by the President

OTS Office of Thrift Supervision

Federal agency under the Department of the Treasury that chartered, supervised, and regulated all federally chartered and state-chartered savings banks and savings and loans associations.

HDMA Home Mortgage Disclosure Act Regulation C

Federal law enacted in 1975 that requires certain financial institutions to provide mortgage data to the public. Grew out of a concern of credit shortages in urban areas

GLBA Gramm-Leach-Bliley Act

Federal law enacted in 1999 to control the ways that financial institutions deal with the private information of individuals

D. 60

Federal law establishes a _____ day transfer period in which no late fees can be charged to a borrower who sends his or her payment to the original servicer, rather than the new one, before the payment's due date. A. 15 B. 30 C. 45 D. 60

> Required services the lender allows the borrower to shop for where borrower selects from a list. > Title services (lenders and owners policy) > recording Fee's

Fee's that can change by 10%: ( 3rd Party Fee's)

Mortgage broker fee

Finance charges always include which of the following?

A. Mortgage broker fee.

Finance charges always include which of the following? A. Mortgage broker fee. B. Title insurance charges. C. Document prep fees D. Credit Report Fee

New Construction Loan

Finances the cost of a new construction Pays while being constructed, then new loan taken out Requires Freddie Mac form 442 Requires Fannie Mae form 1004D

Application

Financial information used for purposes of obtaining an extension of credit

$16,000

Fine for calling someone on the Do Not Call List

$5,000 prison for 1 yr or both per incident $500k for class action suits or 1% of net worth of servicer, whichever is less

Fine if you willfully give false info or consistently understate your APR or fail to comply with TILA

Pre-Payment Penalty

Fixed sum added to loan if loan is paid off early

D. All of the above

For class action lawsuits seeking damages for non-compliance with residential mortgage regulations, the offending servicer must pay an amount not exceeding: A. $1000 per borrower B. 500K in total payouts C. A payout totaling one percent of the servicer's net worth D. All of the above

D. A day where the creditor is customarily open to the public for carrying on substantially all of the creditor's business functions.

For the initial disclosures, what is the definition of "business day?" A. Any day other than Sundays and recognized legal holidays. B. Monday through Friday. C. Any day other than bank holidays. D. A day where the creditor is customarily open to the public for carrying on substantially all of the creditor's business functions.

SAFE Act

Frank is a MLO that is neither registered nor licensed, but he has more than 20 years experience as a mortgage broker. If he continues his loan origination activities, Frank would be in violation of what law?

D. The borrower's current asset information.

Gramm-Leach-Bliley defines nonpublic information as? A. The assessed value of the subject property. B. The legal description or street address of the subject property C. Ownership history of subject property. D. The borrower's current asset information.

Power of Sale

Grants lender the ability to secure full legal title to property

Title 18, section 1010

HUD Title number that fraud punishments are under

C. $700

HUD estimates that the new disclosures will reduce settlement costs by _____ per transaction. A. $250 B. $500 C. $700 D. $1000

Patriot Act Section 314

Helps law enforcement identify, disrupt, and prevent terrorist acts and money laundering activities by encouraging further cooperation among law enforcement, regulators, and financial institutions to share information regarding those suspected of being involved in terrorism or money laundering

It's a construction loan

Higher-Priced Mortgage Loans must have an Escrow account except when?

Trustee

Holds the property of a trust

DIF

Housing to Debt Ratio that measures an individual's ability to manage monthly payment and repay debts

Loan amount divided the lesser value of the appraised value or mortgage value

How do you compute Loan to Value?

5 years

How long do records have to be kept for Patriot Act

3 Years

How long do you keep TILA documents after disclose

No waiting period

How long is the waiting period for a person who seeks to license as an MLO if a prior felony was pardoned?

A. 1/8% or .25%

How much must the APR change on a loan for it to be required to redisclose? A. 1/8% B. .0025% C. 1% D. $350 or 1/4% whatever is less.

M + I = R ( fully indexed rate)

How to compute the Fully Indexed Rate on an ARM

NFIP National Flood Insurance Program

Identifies floodplains and maps thru FEMA

If application was taken 'face to face' then the MLO must write the words "Visual Observation" above their declination to answer and guess.

If a borrower chooses not to provide the Gov't monitoring answers, what is the MLO's responsibility?

31 days - Keep it up to date

If a client wants be placed on your internal Do Not Call List - how long do you have to comply with their request?

C. Credit Score

If a consumer is denied credit, the ECOA requires the lender to forward the Notice of Adverse Action. This notice provides all the following info except: A. Reason for denial. B. Information on the credit report agency used. C. Credit Score D. Description of the credit requested.

B. ECOA

If a creditor did not inform the borrower within 30 days of a credit decision that was considered an adverse action, the creditor violated which law or supporting regulations? A. RESPA B. ECOA C. FCRA D. TIL

A. The lender will allow their lien to stay in second position.

If a lender agrees to subordinate a loan, what has occured? A. The lender will allow their lien to stay in second position. B. The borrower has a late payment reflected on his credit report. C. A loan has been paid in full. D. A loan has been approved.

Saturday

If a loan closed on Tuesday and has a required rescission, when would the loan fund?

A. RESPA

If a mortgage broker gives a real estate agent a gas card in the amount of $75 for the referral of a home buyer, which federal act was violated? A. RESPA B. ECOA C. Fair Housing Act D. FCRA

A. GFE

If a mortgage broker is receiving yield spread premium on a loan transaction, on which of the following documents must the amount be disclosed? A. GFE B. TIL disclosure C. Affiliated business arrangement disclosure D. Borrower/broker agreement

D. 10K fine and 1 year in prison

If a mortgage originator paid referral fees for the referral of settlement services the minimum penalty they could face includes? A. 100K fine and 10 years in prison being somebody's bitch. B. $25K fine no prison. C. 10K fine no prison. D. 10K fine and 1 year in prison

Yes

If a neighbor's tree is leaning over the property line, is it considered encroachment

B. 60

If a servicer receives a "qualified written request" from a borrower for information about an account, the servicer must research the borrower's inquiry and come to a decision as to whether there is indeed an error within ____ business days after receiving the request. A. 30 B. 60 C. 90 D. 120

A. Closed-End

If a trigger term is used when advertising a _____ credit plan, the other major terms (including APR) must also be disclosed. A. Closed-End B. Open-End C. ARM D. Payment option

Start a new application

If an MLO starts an application and then leaves employment and the lender reassigns the loan to a different MLO. What should the new MLO do?

A. Up to 1,000,000 fine and prison.

If an individual submits false information for the purpose of obtaining a federally covered loan, he/she could face: A. Up to 1,000,000 fine and prison. B. License suspension C. Misdemeanor conviction D. A reprimand and loss of commission

Notice of Inquiry

If any servicer of a federally related mortgage loan receives a qualified written request from the borrower for information relating to the servicing of such loan, the servicer shall provide a written response acknowledging receipt of the correspondence within 5 days

It can be done but right of rescission goes to all owners of the home

If more than one person owns a property but applying for a refinance using only 1 person's credit and income,what happens?

c. All

If one or the multiple borrowing parties on a loan decides to exercise the right of rescission, the act will apply to ______ of the borrowing parties A. one b. none c. all d. some

Redisclose

If the APR changes by more than .125% on a fixed rate loan or by .25% on an ARM you must

Visual Observation

If the borrower chooses not to furnish Gov't Monitoring answers under HMDA in a face to face meeting what must the MLO use to record this information?

20%

If the borrower has less than a _____ down payment, mortgage insurance is required. Usually, the lenders will submit the loan package to a mortgage guaranty insurer at the same time the lender is underwriting the loan.

Take .85% of $200k / 12 = $141.66

If the premium is .85% and the loan is $200,000, what is the monthly mortgage insurance payment?

$117.50

If the premium was .94 % on a $150,000 loan, what is the monthly cost of PMI?

1

If two or more people are on a loan, how many does it take to rescind the loan

● 3 days prior to close you must send a written High Cost Mortgage Disclosure ● Homeownership Counseling is required prior to making the loan from a HUD approved counselor. ● No Balloon payment loans ( except bridge loans ), Negative am, Prepayment Penalties , acceleration clauses ( unless a borrower commits fraud or is in default) , Paying a contractor directly from funds and of course, lenders are prohibited from encouraging a borrower to default.

If you create a high cost mortgage you must comply with the following rules:

GLB Gramm Leach Bliley Act

If you do share or sell to NPI, the clients gets a long form notice with the opportunity to "opt out" is covered under

Due on Sale

If you sell your property, you must payoff any outstanding debt

$5,000 or prison for 1 year or both

Iff someone willfully gives false information or consistently understates the APR or fails to comply with TILA the fine is

FHA Federal Housing Administration

Insures banks real estate loans and charges borrowers a small premium

Per Diem Interest

Interest charged on a loan for one or more days

Introductory Rate

Interest rate charged to a customer during the initial stages of a loan

FDPA

In 1973 this made the purchase of flood insurance mandatory for the protection of property located in special flood hazard areas

Deed of Trust

In a Title State, the lending institution holds title to the property in the name of the borrower

Trustor to the trustee

In a deed of trust, the power of sale in the event of default is given from the

NFIA National Flood Insurance Act

In acted 1968 after hurricane Betsy

3 Years

In cases where a mortgage broker is originating the loan the mortgage broker may provide the Loan Estimate on behalf of the creditor and would be responsible for maintaining proof of compliance for

Fixed Rate

Interest rate that remains the same over the life of the loan

Recast

Involves paying off a lump sum of the principal amount and asking to have the monthly payments reset according to the original interest rate and loan terms

Patriot Act Disclosure

Patriot Act Information Form Patriot Act Identification Form Patriot Act Identification Form for Entities or Organizations

D. Mortgage broker fee

Included in the finance charge according to TILA is? A. Survey fees. B. Title insurance charges. C. Appraisal fee D. Mortgage broker fee

Fraud for Profit also known as Industry Insider Fraud

Includes a straw borrower whose credit report is used, a dishonest appraiser who intentionally and significantly overstates the value of the subject property

NCUA National Credit Union Administration

Independent federal agency created to regulate, charter, and supervise federal credit unions

Commitment Letter

Indicates a borrower has passed lenders underwriting guidelines and that they are willing to offer the borrower a home loan

Inquiry Note

Information that should compel a reasonable person to make further inquiries about some aspect of the property

Forced Place Insurance

Insurance policy placed by lender on a home when the property owners own insurance is cancelled

FACTA Fair Credit Reporting Act

Its purpose is to curb identity theft, improve customer dispute resolution, improve accuracy of consumer records.

C. Three years after closing

John Brown and Jane Brown are co-owners of a property and are entering into a refinance transaction that is subject to rescission. John is provided with one copy of Notice Right to cancel and Jane receives no disclosures. What is their deadline for rescission. A. Midnight on the third day following closing. B. 72 hours after closing. C. Three years after closing D. Three business days after closing.

A. 3 years after closing.

John Q. Public and Shari N. Public acquired this property 4 years ago, settled on a refinance transaction for their primary residence subjecting the transaction to rescission provisions under TIL, what is the Public's deadline for rescission? A. 3 years after closing. B. 3 business days excluding Saturdays. C. 3 business days including Saturday and excluding holidays. D. 3 days.

Jumbo Loans

Known as non conforming because they exceed the FNMA Loan limit of $417,000

FERA Fraud Enforcement and Recovery Act

Law that enhanced criminal enforcement of federal fraud laws, enacted 2009

Constructive Note

Legal presumption that anything recorded in a public record can be known by anyone

Foreclosure

Legal process to collect debt on mortgaged property

Demand Feature

Lender demands full payment, usually due to default

> discouraging a borrower from applying > refusing a loan to someone who qualifies > lending with diff terms than someone with the same credit/income criteria > closing an account >Appraisers/Lenders are prohibited from discrimination in home valuation based on a prohibited factor.

Lenders and Brokers are prohibited from doing any of the following based on the protected class:

age race religion sex marital status color national origin if they receive public assisted income If they have exercised any rights previously under this law Age only works if under 18 ( not able to contract)or under 62 when applying for a HECM - otherwise never a good reason

Lenders are prohibited from basing any decision on the following protected classes:

ECOA Valuations rule:

Lenders have 3 days from application to notify a borrower of their right to a copy of their appraisal and lenders must provide promptly upon completion or at least 3 days prior to close whichever is earlier. Borrowers can waive the timing requirement and accept the appraisal at closing. If the loan does not close, and they signed a waiver you have 30 days to provide the applicant with a copy.

Worst rate and payment a borrower will see on a an ARM in the first 5 years

Lenders must disclose two things in reference to an ARM loan, what are they?

B. 3

Lenders must provide the Settlement Cost Information Booklet either by hand delivery or by mail within ____ business days after receiving the application from the potential borrower. A. 2 B. 3 C. 4 D. 5

A. HDMA

Lenders must report detailed information about loan transactions and demographic information concerning borrowers in order to prove they are not discrimination. Which of the following laws creates that reporting requirement. A. HDMA B. RESPA C. TILA D. Gram-Leach-Bliley Act

Predatory Lending FTCA Section 5

Lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through deceptive, coercive, exploitative or unscrupulous actions for a loan that a borrower doesn't need, doesn't want or can't afford

Mortgage Approval Letter

Letter subject to property specified for a loan and dependent on an appraisal

Involuntary Lien

Lien imposed upon the owner of real property

Conforming

Loan has a limit of $417,000

ARM Adjustable Rate Mortgage

Loan that is lower than fixed rate in beginning Loan payment changes over time Adjustable caps that vary Used to obtain a higher loan amount

MIP stays on for 11 years

Loans at 90% LTV and under

Fully Index Rate Formula

M+I=R

MIP is lifetime

MIP stay's on an FHA loan that is greater than 90%LTV

D.)Terminate both

MLO went on a vacation and had her LOA meet with her client. When the MLO came back it was found that the LOA was signing documents as the MLO, turns out this practice was happening often and with MLO's permission. What should be done? a.Terminate the LO b.)Terminate LOA c.)Report to authorities d.)Terminate both

Mischaracterizing the value, trying to influence, coercing an appraiser or threatening to withhold payment is prohibited.

MLO's are prohibited from doing these to appraisers

NFIP National Flood Insurance Program

Made flood insurance available for first time part of NFIA

Foreclosure Abuse

Making borrower sign over deed in lieu of sale below the market value of property

Subprime Lending

Making loans to people who may have difficulty maintaining the repayment schedule, credit score below 620

SAFE ACT Secure and Fair Enforcement for Mortgage Licensing Act Section 1502

Mandates a nationwide licensing and registration system for residential. mortgage loan originators

Regulation C of HMDA

Mandates that depository institutions must annually disclose the communities to which they provided residential mortgages. This allows regulatory authorities to evaluate whether the lender is adequately meeting the needs of the prospective borrowers in that community.

Qualifying Ratios

Manual Underwriting 28%/36%

C. Facilitate shopping

Many of the changes to the RESPA rule are designed with what purpose in mind? A. Increase loan volume B. Reduce disclosure C. Facilitate shopping D. Clarify HVCC procedures

ARM Interest Rate Adjustment

Margin + Interset = Rate

1%

Max Origination fee a lender can charge a veteran on VA loan is

2 Years

Min number of years employment and residence history needed on a 1003?

FTC Federal Trade Commission

Mission is to promote consumer protection and eliminate and prevent anticompetitive business practices

A.) Secondary Market

Mortgage back securities are a product of which of the following? A. Secondary market. B. Primary market. C. Jumbo market. D. Stock market.

Voluntary Lien

Mortgage owner willingly entered into an agreement of lien against their property

Interest Only Mortgage

Mortgage where the mortgagor is only required to pay off the interest that arises from the principal that is borrowed for a set period

ARM Adjustment Rate Mortgage

Mortgage which allows the borrower to choose between several monthly payment options: a 30 or 40-year fully amortizing payment, a 15-year fully amortizing payment, an interest-only payment, a minimum payment or any amount greater than the minimum payment.

Lender

Mortgagee / Trustee is the

Non-Traditional Mortgages

Mortgages include interest-only mortgages, adjustable rate mortgages (ARMs) and subprime mortgages

Borrower

Mortgagor/ Trustor is the

Regulation Z

Most of the specific requirements imposed by TILA are found in

Loan Estimate

Needs to be given to the borrower within 3 business days of application for all mortgages subject to RESPA-purchase and refi (excludes HELOCs, HECM and Chattels)

C.) A refinance provision

Nontraditional ARMs are considered the riskiest of loans when they include any of the following except. A. Low Doc programs. B. Rate caps. C. A refinance provision. D. Teaser programs.

> Origination charges > Points ( after the loan is locked)

Not allowed to change:( Lender and broker fee's)

Conventional Loan

Not guaranteed or insured by the government but can still follow federal guidelines

Foreclosure Rescue Scheme

Offers to help a homeowner in financial difficulty refinance their loan or obtain a mortgage modification to avoid foreclosures but doesn't deliver in the end, leaving the homeowner in even worse financial shape than before

>terrorist list checking is done thru OFAC - Office of Foreign Assets Control "OFAC! My client's a terrorist!" >Failure to comply is a $1m fine >Keep your records for 5 years

Once ID'd you must determine if your client is on a known terrorist list:

A. Credit report fee

Once the good faith estimate has been delevered, what is the only fee that can be collected for three business days? A. Credit report fee B. Appraisal fee, IF in compliance with HVCC C. Application fee D. No fee of any kind

Infile Credit Report

One national credit bureau report

A. Housing credit needs

One purpose of HMDA and Regulation C is to provide the public wth information that will help show whether financial institutions are serving the ________ of the neighborhoods and communities in which they are located. A. Housing credit needs B. Local banking needs C. Real estate market D. None of the above

B.) FHA Loans

Out of all the loans below, which has a mandatory MIP? A. All loans with less than 20% down payment. B. FHA loans. C. HELOC D. VA

FTCA Federal Trade Commission Act

Outlaws unfair methods of competition and outlaws unfair acts or practices that affect commerce

Finance Charge

The cost of credit in the form of an exact dollar amount

SRP Service Release Premiums

Payment received by lender after selling a loan Based on market value

Payment Shock

Payments on nontraditional loans can increase significantly when the loans begin to amortize. Commonly referred to as _________________ this is of particular concern for payment option ARMs

Truster

Person who grants the right to trust

Customer

Person who obtains or has obtained a finical product

Mortgage

Pledge of collateral to secure a loan

2% of the outstanding loan amount during the first year of the loan

Pre payment penalties, when allowed per Dodd/Frank cannot exceed?

Patriot Act Section 326

Prescribes regulations establishing minimum standards for financial institutions and their customers regarding the identity of a customer that shall apply with the opening of an account at the financial institution

Annual Interest Rate Formula

Principal (X) Interest Rate = Annual Interest Rate

PITI

Principal, Interest, Taxes, Insurance Refers to the components of a mortgage payment

TILA Appraisal Regulations 129E

Prohibits misuse of appraisals, influencing appraiser and withholding payment for an appraisal

Note

Promise to repay debt

Dodd-Frank Act

Promotes the financial stability of the United States Passed in 2010

Collateral

Property a borrower can provide as security for a loan

Caps

Protects borrowers from huge swings in the market

PMI Private Mortgage Insurance

Protects lenders if borrower stops making payments borrower pays until 20% of loan value is paid

Payoff Statement

Provides homeowner proof the mortgage is paid off

Income Verification

Provides verification a borrower has the means for repayment of debt

> Educate borrowers on costs associated with loan (provide Loan Estimate) > Eliminates kickbacks and referral fee's (section 8) > Establishes rules for escrow

Purpose of RESPA:

ECOA Equal Credit Opportunity Act

Purpose of the law is to keep lenders and brokers from discriminatory practices and to ensure that all applicants have equal rights of opportunity when being considered for a loan.

Dodd Frank

Put in place to promote financial stability and end abusive practices in Financial Services ( its the robin hood of all laws)

GLB Gramm Leach Bliley Act

Put restrictions on Financial Institutions use of borrowers "non public personal information" and requires certain disclosure before sharing or selling.

Contract Knavery

Putting stipulations or clauses into loan contracts that are disadvantageous to the borrower

5 Years

RESPA requires that you maintain the Servicing Disclosure and ABA disclosure for a minimum of

> Lenders are allowed to collect 2 months cushion making the maximum number of months collectable for escrow 14 months > Within 45 days of closing the servicer must provide an initial escrow account statement. > Lenders must review the borrower's escrow account annually and return any overage of $50 or more and must submit to borrower within 30 days of completion of review. > Lenders who collect escrow are prohibited from commingling funds - they must be placed in an account separate from the general business account.

RESPA sets the rules for Escrow accounts:

Average Prime Offer Rate

Rate higher than a benchmark rate

DTI Debt to Income Ratio

Ratio lenders use to measure an individual's ability to manage monthly payment and repay debts

LTV Loan to Value

Ratio of a loan to the value of an asset purchased

LTV Loan to Value Ratio

Ratio used by lenders to express the ratio of a loan to the value of an asset purchased

AML Anti-Money Laundry Program

Refers to a set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions

Morals

Refers to an individual's own principles regarding right and wrong

Ethics

Refers to rules provided by an external source

LAR Loan Application Register

Refers to the format that has been prescribed for reporting HMDA data

COFI Cost of Fund Index

Regional average of interest expenses incurred by financial institutions which in turn is used as a base for calculating variable rate loans

CFPB Consumer Financial Protection Act Title X Bureau

Regulates consumer financial products

D. All of the above

Regulation Z applies to businesses that extend credit if which of the following conditions are met: A. The credit is offered to consumers. B. The credit is subject to finance charge and payable in more than four installments. C. The credit is primarily for personal, family, or household purposes. D. All of the above

Regulation V

Regulation covering Fair Credit Reporting Act (FCRA)

CFPB Consumer Financial Protection Bureau

Regulatory agency charged with overseeing financial products and services offered to consumers

Risk Layering

Relaxing more than one of the traditional UW Standards - (No income verification and not escrowing for taxes and insurance doing a stated value, no documentation, high LTV is

Risk Layering

Relaxing more than one traditional underwriting standards which increases the risk of defalt

Exculpatory Clause

Relieves one party form liability due to actions of another party

CIP Customer Identification Program

Requirement, where financial institutions need to verify the identity of individuals wishing to conduct financial transactions with them and is a provision of the USA Patriot Act

TILA Document Retention 1026.25

Requires a creditor to maintain for three years records sufficient to evidence all compensation it pays to a loan originator

FACTA Disposal Rule 2003

Requires appropriate measures to dispose of sensitive information derived from consumer reports

Patriot Act Section 352

Requires financial institutions to establish anti-money laundering programs, which at a minimum must include: the development of internal policies, procedures and controls; designation of a compliance officer; an ongoing employee training program; and an independent audit function to test programs

Trust

Right of property to be held for the benefit of another

> Purchase of 2nd Home > Rental Property > Vacation Home

Right of rescission does not come into play on:

Right of Rescission

Right that borrowers have to cancel a loan or line of credit with a lender within three days of closing

TCPA Telephone Consumer Protection Act

Rule prohibiting telephone solicitation calls to a residence before 8:00 am or after 9:00 pm, regulates telemarketing calls. It also is the authority to create the National Do-Not-Call List

Appraisal Approaches

Sales Comparison/Market Data Cost Income

> No paying for referrals > Up charging on 3rd party service (sharing in the appraisal fee ) is also a violation

Section 8 of RESPA prohibits anyone from giving or accepting anything of value for the referral of a mortgage loan or settlement services.

A. A settlement attorney pay a mortgage company $250 per client referred.

Section 8 violations of RESPA include which of the following? A. A settlement attorney pay a mortgage company $250 per client referred. B. Broker receives origination fee by Yield Spread Premium C. A company receives compensation for doing a title search. D. A mortgage company charges $12 for a credit report that costs the mortgage company $12

1024.33

Section under RESPA for mortgage servicing transfers

Title Record

Serves as a central repository of information about a parcel of land

Hard Prepayment Penalty

Set time frame, the property if sold or refinanced during this time frame, would allow the lender to charge a set penalty

A. Saturday

Settlement of a refinance transaction for a borrower's principal residence occurs on Tuesday at 130pm, when is the loan funded? A. Saturday B. Friday at 1:30pm C. The next Monday D. Tuesday, day of closing.

Never

When is it okay to ask someone their religion?

FTC 16 CFR Part 314:

Standards for safeguarding customer information

Chunking

Starts as a seminar or program where the scam artist pitches real estate investments to an investor and uses their personal information to obtain mortgages.

A disclosure for every adjustable program in which the consumer expresses an interest.

TILA requires two additional disclosures for ARMs on a consumers principle dwelling with a loan term greater than 12 months when the rate can change after the consummation of the loan. One disclosure is a booklet titled "Adjustable Rate Mortgages." The Second is?

8821

Tax Info Authorization form

Leverage

Term for borrowing money to purchase

CMT Constant Maturity Treasury

The 12-month moving average used as an index for adjustable rate mortgages

A. Annual

The APR is the actual cost of the loan in the form of a(n) ______ rate. A. Annual B. Monthly C. Amortized D. Augmented

a. Providing check cashing, check collection, or check guarantee services* b. Providing appraisal of real or personal property c. Excluding consumer debt and servicing loans d. Buying payment instruments

The CFPB regulates "covered persons" who engage in offering or providing "consumer financial services or 30 products" These include:

B.) Rate adjustments on adjustable rate programs

The Cost of Funds Index is traditionally used to determine interest rates of what type of loans? A. 360 month mortgage-Fixed rates. B. Rate adjustments on adjustable rate programs. C. Reverse mortgage. D. HELOC

2604

The Home Loan Toolkit is covered under this section of RESPA

B. Automatically discontinue PMI when the borrower reaches 78%

The Homeowners Protection Act mandates servicers do which one of the following. A. Collect PMI until the loan is paid in full. B. Automatically discontinue PMI when the borrower reaches 78% C. Drop PMI once the borrower reaches 80% LTV D. Automatically drop PMI after 5 years.

TIL and GFE

The Know before you owe rule (TRID) integrated which 2 upfront disclosures?

Regulation X

The Real Estate Settlement Procedures Act (RESPA), is covered under this regulation

D. Statement that the interest rate will be offered for the duration of the loan.

The TILA requires all of the below info to be disclosed to the applicant when they are applying for an ARM, except. A. Frequency of changes in the APR B. Possibility of changes in the payment amount over time. C. Index used to determine the ARM D. Statement that the interest rate will be offered for the duration of the loan.

A. The lender's interest in the property

The Uniform Settlement Statement must conspicuously and clearly itemize all charges to the borrower and the seller in connection with the settlement, as well as indicating whether any title insurance premium included in the charges covers or insures the following: A. The lender's interest in the property B. The borrower's interest in the property C. Both parties interest in the property D. None

Credit

The ability of a borrower to obtain goods or services before payment, based on the trust that payment will be made in the future

D.) Prepaid Finance Charge

The acronym PFC stands for: A. Paid from closing. B. Prepayment penalty. C. Prequalification of credit. D. Prepaid Finance Charge.

Disclosure

The act of making new information known

Co-Signing

The act of signing for another person's debt which involves a legal obligation to make payment on the other person's debt should that person default.

Conveyance

The act of transferring an ownership interest in real property from one party to another

Veterans Entitlement

The amount of the Guarantee, is based on when, how , branch of service and discharge

Power of Attorney

The authority to act for another person in specified or all legal or financial matters

D.) VA Loans

The below loan has an assumable clause: A. Jumbo loans. B. Conforming loans. C. FHA loans for low income families. D. VA loans.

Rebuttable Presumption

The borrower has the ability to raise a legal challenge but must overcome the legal presumption that the lender complied with this obligation

D. Whichever of the above comes last.

The borrower must notify the creditor of any intent to rescind on a loan by midnight of the third day after: A. Consummation of the loan. B. Delivery of the right to rescind. C. Delivery of disclosures. D. Whichever of the above comes last.

b.) Ask the borrower if they have undeclared assets

The client's appraisal comes in lower than expected causing the borrower to bring $10,000 to the closing to complete the refinance. The borrower advises the MLO he only has $8,000 available to close. What should the MLO advise the client to do? a.) Ask a relative for the rest b.) Ask the borrower if they have undeclared assets c.) Loan the borrower $2,000 and have them repay after closing d.) Tell the borrower to take a cash advance on one of the credit cards being paid off.

Reverse Redlining

The illegal practice of extending credit on unfair terms in a particular community on a discriminatory basis

FICO Fair Isaac Corporation

The largest and best known of several companies that provide software for calculating a person's credit score

Description of improvements to property

The market conditions addendum required in conjunction with the appraisal report lists all of the following information except?

GLB Gramm Leach Bliley Act

The notice as to whether or not you share or sell a customers Non-Public Information, NPI must be given upfront at application. If you don't share/sell - give them a short form notice that states this info is covered under

B. Fines of up to 10K and one year in prison.

The penalties for paying or accepting an illegal referral fee are: A. Fines of up to $5k and one year in prison B. Fines of up to 10K and one year in prison. C. Fines of up to 10K and 3 years in prison D. Fines of up to 20K and one year in prison

C. Red Flags.

The potential patterns, practices, or specific activities indicating the possibility of identity theft are considered to be: A. FACTA violations B. FCRA Violations C. Red Flags. D. ECOA Rules

D. A reasonable amount of time.

The privacy act (also known as the GLBA) requires how much notice to a consumer before on can release their non-public personal information previously disclosed to the consumer by the creditor that the non-public personal information would not be shared with affiliates or third parties? A. 60 days B. 30 days C. 3 days D. A reasonable amount of time.

Revoke an MLO's Unique Identifier

The states have the authority to

B. A disclosure for every adjustable rate program in which the consumer expresses an interest

The truth in lending act requires two additional disclosures for ARMs on a consumers principal dwelling with a loan term greater than 12 months when the rate can change after the consummation of the loan. One disclosure is a booklet titled "Adjustable Rate Mortgages." Choose the other required disclosure. A. Right to convert to a fixed rate disclosure. B. A disclosure for every adjustable rate program in which the consumer expresses an interest. C. A disclosure describing every adjustable rate program offered to the consumer in the last 24 months. D. A HARM disclosure.

1.) Points and Fees Trigger ( excluding Mortgage Insurance)- if the total points and fee's , not including bonafide 3rd party fees 2.) APR Trigger - if your APR is 6.5% over the APOR - "average prime offer rate" for comparable 1st mortgages and 8.5% over APOR on 2nds or 1st liens under $50k 3.) Prepayment Penalty of longer than 3 years or more than 2% of the loan amount

There are 3 reasons your loan becomes High Cost

B. MLS sold homes approach

There are three usual approaches to determining the fair market value of a property: Which one does not belong? A. Income approach B. MLS sold homes approach. C. Cost approach. D. Sales approach.

Primary Residence Refinance, HELOC, Equity Loan

There is only rescission in a

>Escrow deposits > Daily Interest > Homeowners Insurance > 3rd party charges where the lender allows borrower to shop for their own services

Things that can change:

Qualified Mortgage

Think plain vanilla 30 yr fixed or standard fully amortized ARMS, QM loans may not have negative-amortization, interest-only, or balloon-payment features or terms that exceed 30 years. They also may not have points and fees that exceed the specified limits ( max points and fee's of 3% ) loans under $100k have higher allowances, max DTI is 43%

Loan Estimate

This document accomplishes the goal of both RESPA and TILA that pertains to educating borrowers of all the closing costs associated with the loan transaction

GFE Good Faith Estimate

This document includes the breakdown of approximate payments due upon the closing of a mortgage loan

Servicing / Transfer Disclosure Statement > Initial form - 3 days from app > Subsequent form is required if a loan is sold after it closes, 15 days prior to selling the loan to a new servicer (both the old servicer and new servicer must send this disclosure when the loan is being sold)

This form discloses to the borrower whether or not the lender/broker taking the application intends to service the loan or sell or assign it to someone else.

GFE Good Faith Estimate

This form is required on the following loan types: HELOC's, Reverse, Chattel (secured by mobile home not attached to land)

CHARM Booklet Consumer Handbook On Adjustable-Rate Mortgages

This is an informational booklet containing general information on Adjustable Rate Mortgages (ARM's) that is provided by the lender to the loan applicant at the time of application for certain adjustable mortgage loans

APR Annual Percentage Rate

This is the TOTAL cost of the loan after all closing costs are taken into consideration disclosed to the borrower in the form of an interest rate

Index

This is tied to the market

FCRA Fair Credit Reporting Act

This law gives you permission to pull a consumers report - you must have a "permissible purpose" ( ex: application or employment)

FCRA Fair Credit Reporting Act

This law has significant responsibilities for Consumer Reporting Agencies and lesser for those who are not.

FCRA Fair Credit Reporting Act

This law requires creditors to provide accurate credit information to the CRA's . The CRA's have ultimate responsibility for protecting a borrower's credit information.

B. Reverse Annuity Mortgage

This loan product is typically for borrowers over 62 years old who have built substantial equity or have paid their home in full and wish to cash out the equity in their home. A. Graduated Payment Mortgage. B. Reverse Annuity Mortgage. C. Home Equity Line of Credit. D. New Construction Loan.

TILA Regulation 129(c)

This requires creditors to determine a consumer's ability to repay a "residential mortgage loan" and establishes new rules and prohibitions on prepayment penalties.

TIP Total interest percentage

This the total interest paid over the life of the loan as a percentage of the amount borrowed

URAR Uniform Residential Appraisal Report

This was created to allow for standard reporting and analysis of single-family dwellings

RESPA Real Estate Settlement Procedures Act

This was designed to protect potential homeowners and enable them to become more intelligent consumers. It requires that lenders provide greater amounts of information to prospective borrowers at certain points in the loan settlement process

18 months with established relationship such as purchase 90 days after an inquiry is made

Time periods under TCPA, Telephone Consumer Protection Act that a person can be contacted

HUD-OIG Office of Inspector General

To promote the integrity, efficiency and effectiveness of HUD programs and operations

B. Financial Institutions

Under GLB, mortgage lender and brokers, Check Cashers, Pay day lenders, and credit counselors are all examples of: A. Depository institutions. B. Financial institutions. C. Regulatory agencies. D. Banks.

When provider is an "associate" as defined by RESPA

Under RESPA a referrer can receive compensation only if:

ABA Affiliated Business Arrangement

Under RESPA, an arrangement where a person refers mortgage-related business to a company in which the person "or an associate of such person" has an ownership interest of more than 1 percent in a provider of settlement services.

D. Mortgage broker fee.

Under TILA, which of the following is included in the finance charge calculations? A. Seller paid points B. Title insurance premium C. County recording fee D. Mortgage broker fee.

c.) Charging higher rates to risky buyers

Under The Guidance on Subprime Mortgage Loans , the CSBS considers all of the following to be a predatory lending practice except: a.) Basing a loan off the foreclosure value b.) Refinancing a borrower repeatedly to collect more fees c.) Charging higher rates to risky buyers d.) Using fraud or deception to sell the loan

C. Visual observation

Under the Home Mortgage Disclosure act, if information regarding the borrowers' ethnicity, race, and sex is not provided by the applicant and if the application is submitted in person, the lender is required to note the information on the basis of _________ or surname. A. Interviewer's opinion. B. Previous experience C. Visual observation. D. Employment status.

D

When is the servicing disclosure statement provided to a borrower? A. At closing B. Three business days after application C. Three business days prior to closing D. At the time loan servicing is transferred.

5 years or until loan is paid off After 5 years the borrower requests it to be canceled, however LTV must be under 80% of the ORIGINAL Value and the borrower cannot be delinquent.

Under the TILA HPM escrow rule, lenders are required to establish and maintain an escrow account for borrowers who accept a first lien higher priced mortgage loan for a minimum

Terms of the credit transaction

Under the Truth-in-Lending Act, a mortgage professional is required to disclose ________ to a borrower.

B. If the affiliated business is an attorney, credit reporting agency or an appraiser and there are no referral fees or kickbacks paid

Under what circumstances can a lender require use of the lender's affiliated business? A. Only if the lender owns less than 1% of affiliated business. B. If the affiliated business is an attorney, credit reporting agency or an appraiser and there are no referral fees or kickbacks paid C. If there is no referral fees or kickbacks D. All required use prohibited by RESPA

1008

Underwriting and Transmittal Summary

1003

Uniform Residential Loan Application ( URLA)

2/1 Buydown

Used on fixed rate loans over two years Set of two initial temporary-start interest rates that increase in stair-step fashion until a permanent interest rate is reached

Title Insurance

Used to protect agents, two types Owners- insures title is free of defects Lenders-benefit purchaser if loan is sold

Property Flipping

Usually involves an appraiser and a group of people who buy and resell to each other at inflated prices and ultimately to another person.

D. VA Funding Fee

VA loans require which of the following? A. VA Value Certificate B. Flood insurance C. Pest inspection. D. VA Funding Fee

Is a $10,000 fine and /or 1 year in prison or both.

Violating Section 8 of RESPA is is

Credit score disclosure

We are required under FACTA to disclose to our clients upfront in the application process what the range of available scores are and what their score was and the factors that adversely affected their score as well as the company who provided the score.

GLB Gramm Leach Bliley Act

What act states if a company decided to share info at a later date after initial disclosure, you must send a revised notice and give them an opportunity to opt out.

A.) Ignore the situation as it may be a family matter

What action should an MLO take if during a refinance involving a mother and son the MLO gets the feeling the mother is hesitant about the refinance? a.) Ignore the situation as it may be a family matter b.) Pull the mother aside to discuss c.) Refer the transaction to the AML department d.) Pull the son aside to discuss

100% of Dwelling

What amount does Flood Insurance Cover?

Seperated

What can you not refer to the borrower as on an application?

C. Credit terms for the transaction.

What does TILA require mortgage originators to disclose on the borrower? A. A copy of the appraisal report if the borrower has paid for it. B. Estimated closing costs within 10% of actual. C. Credit terms for the transaction. D. The average conforming interest rate for the previous month.

Loans with high delinquency or default rates

What does subprime refer to?

B. Federal Housing Administration

What entity insures FHA loans. A. Fair Housing Authority B. Federal Housing Administration C. First-time Homeowner's Act. D. None of the above.

B. Existing Debt

What factor do lenders analyze in order to determine if a borrower will be financially able to meet the demands of a loan repayment? A. Amount of the loan request B. Existing debt. C. LTV D. Length of the loans terms.

B. Credit report fee.

What fees may be collected prior to the 3 business day waiting period? A. Appraisal fee, as long as it goes to the appraiser at the door. B. Credit report fee. C. No fee may be collected before the 3 day waiting period D. Only reasonable, bona fide fees may be collected.

442 or 1004d

What form does an appraiser use to certify construction is complete?

Name of creditor/ monthly payment/ unpaid balance

What information is collected in the assets and liability section

D. Provide a source of funds for lenders

What is FNMA's primary purpose in the secondary market? A. Fund loans once they are processed and closed. B. Underwrite a loan. C. Originate loans. D. Provide a source of funds for lenders.

Personal Checking Account

What is considered to be a covered account according to FACTA

C. Insures Loans

What is one of the many roles of the Federal Housing Administration? A. Approves loans. B. Gaurantees loans. C. Insures loans. D. Services loans.

HOA and Real Estate Taxes (and Insurance)

What is the borrower of a HECM loan required to pay?

The Loan Estimate is the estimated cost to close and the Closing Disclosure is the actual cost at closing

What is the difference between the Loan Estimate and the Closing Disclosure?

C. 1 Year in prison $10,000 fine

What is the fine for a RESPA violation? A. 1 year in prison B. $7500 fine per violation C. 1 year in prison and a $10,000 fine. D. $25,000 and 6 months in prison.

C. 0%

What is the maximum that a disclosed origination charge can INCREASE? A. 10% B. 5% C. 0% D. .125%

80%

What is the minimum amount of flood insurance required?

B. 10 days

What is the minimum time the disclosure for settlement costs be valid? A. There is no time limit B. 10 days C. 15 days D. 30 days

A. RESPA

What is the primary federal statute that governs residential mortgage loans? A. RESPA B. FCRA C. TILA D. FHA

A. To ensure applicants have equal access to credit.

What is the primary purpose of ECOA? A. To ensure applicants have equal access to credit. B. To ensure credit info is reported equally. C. Requires disclosure of closing costs. D. Requires clear disclosure of credit terms.

C. To ensure accuracy and fairness of credit reporting.

What is the primary purpose of FCRA? A. Require credit reporting agencies purge old data. B. To ensure equal access to credit. C. To ensure accuracy and fairness of credit reporting. D. Requires clear disclosure of credit terms.

D. Advance disclosure of closing costs and prohibitions on referral fees.

What is the primary purpose of RESPA? A. Direct industry to standardized costs. B. Limit points and fees. C. Disclose to consumer the true cost of credit on a yearly basis. D. Advance disclosure of closing costs and prohibitions on referral fees.

B. Prohibits discrimination in credit transactions.

What is the purpose of regulation B? A. Eliminated splitting of fees. B. Prohibits discrimination in credit transactions. C. Requires disclosure of closing costs. D. Prohibits the charging of fees for the completion of the GFE and TILA forms.

> attest to the truthfulness of the document > expresses how the application was taken and who the MLO is employed by

What is the significance of having the MLO sign the last page of the 1003?

D. Index and Margin

What is used to determine the interest rate change on an ARM? A. Index only. B. YSP. C. SRP D. Index and Margin.

B. FCRA

What law was created to ensure accurate credit information is used when making a credit decision? A. RESPA B. FCRA C. TIL D. ECOA

2

What the most a loan with 2/6 cap can increase in an adjustment period

An MLO of a non-depository firm that arranges mortgages for clients

What type of MLO must be licensed?

No-bid loan

What type of loan cannot be required to be repurchased?

Variable Rate

What type of loan has a rate of 5% for 5 years and a rate at 6% for the remaining 25 years?

C. Bait and Switch

What unethical practice is the new Good Faith Estimate designed to reduce? A. Redlining B. Flipping C. Bait and Switch D. Affinity Fraud

Utility Records

What would not be found in a credit report

Oral Rate Disclosures

When a borrower orally asks about a credit plan lender must state the APR

HECM

When a borrower reaches 62 years of age and he has significant equity in his home, which of the following mortgage programs would best assist that person if he is in need of addictional living expenses, access to funds for home repair or other needs? HELOC HECM Swing-Loan ARM

Lender has 5 days to acknowledge they have they have received the request 30-45 days to correct the error or justify

When a borrower sends a qualified written request for info from their servicer

Piggyback Loan

When a borrower takes out two loans simultaneously which lowers equity and increases credit risk

A. Settlement statement

When a mortgage company is earning YSP on the origination of a mortgage loan which disclosure indicates the amount? A. Settlement statement B. TIL disclosure C. Loan origination agreement required under federal law. D. Affiliated business arrangement disclosure

Price Gouging

When a seller spikes the prices of goods or services to a level much higher than is considered reasonable or fair

C. The maximum the rate can increase over the life of the loan

When an ARM has rate caps of 5/2/6, the 6 refers to what? A. The maximum rate increase at the initial adjustment B. The start rate for the loan C. The maximum the rate can increase over the life of the loan D. The rate maximum the rate can decrease over the life of the loan

The fully indexed rate or introductory rate whichever is higher

When calculating ATR ( Ability to Repay) on an ARM loan lenders must use

A. Appraisal fees

When calculating finance charges in compliance with the TILA, all of the following are included except. A. Appraisal fees B. Mortgage broker fees. C. PMI D. Settlement fees.

When the modification is complete

When can a fee be charged for a loan modification under MARS

Packing

When charges for services you did not request or need are added to the loan, credit insurance most common charge

Age cannot have a negative factor

When considering credit scoring

Business Day

When creditors office is open to the public, a calendar working day except Sunday or a federal holiday

C. GFE and Settlement Statement

When do borrowers get yield spread premium disclosures? A. For high cost loans on the section 32 disclosure. B. On application, TIL and the mortgage or note C. On GFE and Settlement Statements D. Only on refinance transactions.

Late Payement Penalty

When fees are attached to late payment

Never

When is it okay to ask of a woman's childbearing capabilities or whether or not there are intentions to have additional children.

B. The borrower qualified at the buydown rate

When utilizing a temporary buydown to lower the interest rate on a FHA loan, which of the following are correct A. The borrower qualified at the note rate B. The borrower qualified at the buydown rate C. The rate cannot be more than 2% below the note rate D. Seller or builder can pay the discount points to buydown the rate

Primary Mortgage Market

Where credit institutions originate loans

Secondary Mortgage Market

Where originated loans are sold to warehouse lenders Origination fee is charged to warehouse lenders

C.) Stated Loans

Which is not an example of fraud? a. shot gunning b. straw buyer c- stated loans d- silent seconds

D. HDMA

Which law dictates that lenders who take 100 or more application a year report detailed info about their loan applicants and the applicant's demographic info? A. ECOA B. RESPA C. Privacy Act (GLB) D. HDMA

D. Finance charge

Which of the below is considered the "Cost of Credit" expressed in a dollar amount? A. LTV B. APR C. YSP D. Finance charge

B. An applicant's marital status may lead to a change of employment.

Which of the below responses would be a violation of an applicant's right under the Fair Lending Laws? A. The applicant's age is below the required age of executes a contract. B. An applicant's marital status may lead to a change of employment. C. Their income doesn't meet the requirement of the loan request. D. Applicant's credit history shows many late fees and defaults.

Adding a HELOC to your primary residence

Which of the following Loans would not require a Loan Estimate under the TRID rules?

A. Non-Conforming

Which of the following best defines a loan that doesn't meet the loan limits of FNMA and FHLMC? A. Non Conforming B. Conventional loans C. Subpriming loans D. FHA and VA

A conventional mortgage that is nonconforming

Which of the following best describes a 2nd mortgage?

B.) The applicants currently own & live in a property in the same neighborhood as the property for the loan

Which of the following could be an indication of possible fraud on an application for an owner occupied purchase transaction? a. The applicants currently live with their parents b. The applicants currently own & live in a property in the same neighborhood as the property for the loan c. The property is out of state d. There are 4 applicants on the application

D. TIL Disclosure

Which of the following documents shows the cost of a loan expressed as an annual percentage rate? A. GFE B. HUD-1 C. Consumer caution D. TIL Disclosure

B. Discount points.

Which of the following fees is not included in the GFE? A. Loan origination fees. B. Discount points. C. Real Estate taxes D. Real Estate broker fees.

Borrower's current mortgage provider

Which of the following is NOT considered Non Public Information?

D.) all of the above

Which of the following is a risk associated with a nontraditional ARM? a.) the inclusion of a prepayment penalty b.) payment shock when amortizing begins c.) additional costs associated with reduced document loans d.) all of the above

B. Subordinate Lien

Which of the following is another term for a junior lien? A. First Mortgage B. Subordinate Lien C. HELOC D. Reverse Mortgage

D. Borrower makes an extra payment each year

Which of the following is not considered a drawback in a Bi-Weekly payment mortgage? A. Greater risk of late payments. B. Each payment has an administrative service fee. C. Bi-weekly programs offer lesser interest rates. D. Borrower makes an extra payment each year.

Property Value

Which of the following is not considered when evaluating the Ability to Repay?

C. Verification of Delivery

Which of the following items would NOT necessarily be needed in order to have a "GFE Application"? A. Property address B. Social Security Number C. Verification of Delivery D. All of the above are required for a GFE Application

A. Reverse Mortgage

Which of the following loan programs does not require credit or income documentation and doesn't require repayment? A. Reverse mortgage B. Stated income mortgage C. HELOC mortgage. D. Arm mortgage.

B. Jumbo Loan

Which of the following loans might be used to finance a loan amount that is in excess of GSE's loan limits? A. Subprime loans B. Jumbo loans C. Balloon loans D. Reverse mortgages

A. $500K or 1% of the lender's net worth

Which of the following payments must be made by the lender in both individual and class action lawsuits for violations of the truth in Lending Act A. $500K or 1% of the lender's net worth B. $50K C. Actual damages D. 100K

B. Conforming Loans

Which of the following terms specifically refers to a loan that is not obtained through a program of the federal government? A. USDA loans B. Conforming loans C. GNMA loans D. VA and FHA loans

Intermittent or seasonal income

Which of the following types of income cannot be used or is reason to decline an applicant for a mortgage?

C. A mortgage broker accepts a fee for sending its customers to a specific real estates sales associate

Which of the following violates RESPA? A. A lender pays a fee to an appraiser for completion of an appraisal report. B. A mortgage broker receives indirect compensation in the form of yield spread premium for originating a loan at an interest rate in excess of the "par" interest C. A mortgage broker accepts a fee for sending its customers to a specific real estates sales associate. D. A mortgage broker pays a fee to a title company for the settlement of the loan.

C. Amortization schedule

Which of the following would address the principal and interest payments due on a loan? A. Margin B. Index C. Amortization schedule D. Life of the loan caps

Convicted for breach of trust within prior 15 years

Which of the following would be grounds for denying a license?

B. Appraisal and fair market value practices

Which one of these areas is not addressed by the agencies guidance on nontraditional mortgage guidance? A. Portfolio and risk management practices. B. Appraisal and fair market value practices C. Loan terms and underwriting standards D. Consumer protection issues.

C. Trigger

While _____ terms require disclosures, general advertising terms do not, because they do not refer to repayment period length or down payment cost. A. Specific B. Non-specific C. Trigger D. Stock

B. Consumer friendly

While a lender does not have to advertise every single plan he or she offers, it is unlawful to conceal less _________ plans. A. Consumer driven B. Consumer friendly C. Lender offered D. Lender serviced

C. The broker.

Who is responsible for providing the GFE to the borrower when the loan is originated by an entity that is acting as a mortgage broker? A. Both the lender and the broker. B. Only the lender C. The broker. D. The settlement agent.

A. Anyone with ownership interest in the property

Who must receive a Notice of Right to cancel in a Refinance transaction? A. Anyone with ownership interest in the property B. Only parties who are signing the mortgage. C. Only parties with 51% or more ownership in the property. D. Only the primary borrower

A. They are insured by the federal government

Why are FHA loans beneficial to lenders? A. They are insured by the federal govt. B. No escrow is required. C. FHA loans are for low income families. D. They finance 100% of the sales price.

MARS Mortgage Assistance Relief Service

any service, offered to the consumer in exchange for consideration, that assists the consumer with any of the following: ● Stopping, preventing, or postponing or saving the consumer's dwelling from foreclosure ● Negotiating, obtaining, or arranging a modification ● Obtaining any forbearance ● Negotiating an extension on when a consumer may: Cure his or her default on a dwelling loan, Reinstate his or her dwelling loan, Redeem a dwelling, ● Obtaining any waiver of an acceleration clause or balloon payment Negotiating, obtaining or arranging: A short sale of a dwelling,

HUD -1 Settlement Statement

provided to applicable borrowers ( as listed under GFE ) 1 day prior to close

Factual Data Credit Report

two or three credit bureau reports

SUM

you may only ask if a borrower is Separated Unmarried Married