Set 4, April Questions

Front 1

Which of the following statements does NOT apply to a QM?

Back 1

"a loan with a negative amortization can still be considered a QM ."

Negative amortizations disqualifies a loan as a QM.

Front 2

Mortgage broker bill takes an application for a cash-out loan from a woman on a fixed income so that she can pay her past-due real estate taxes. Bill does not tell her that she can make sure that the new loan collects for real estate taxes, hoping in a few years she will need him again for the same reason. This is an example of

Back 2

loan flipping

** making loans with a meager tangible benefit that does not resolve the borrower's problem but creates repeat business.

Front 3

FCRA is governed by

Back 3

CFPB, reflecting accurate information is a right of the consumer financial protection bureau.

Front 4

The fresh start company is anxious to work with homeowner, Julia to obtain a loan modification that will help her to avoid foreclosure. Fresh start asks Julia for an advance fee to start the process. Which has fresh start violated?

Back 4

MARS rule

**which contains the ban on advance fees being charged by mortgage relief services.

Front 5

Actual charges at settlement listed on the HUD-1 statement may increase more than 10% from the estimates shown on the GFE for

Back 5

Initial deposit of escrow account. The initial deposit of escrow shown in block 9 of the GFE is not subject to a tolerance level for change.

Front 6

Which attribution is NOT considered illegal discrimination in granting credit under the equal credit opportunity act?

Back 6

INCOME

the ECOA prohibits discrimination in granting credit to people based on sex, age (if at least 18) marital status, race, color, religion, national origin, receipt of public assistance,exercised rights under the consumer credit protection act.

Front 7

To transfer a right or interest to another is known as an assignment

Back 7

an assignment in mortgage lending is what happens when a lender transfers its interest in a mortgage loan to an investor.

Front 8

On a GFE, the tradeoff table shows the

Back 8

difference between one loan and the same loan with a different interest rate.

Front 9

Allen is concerned that Monty's debt-to-income (DTI) ratio is to high to qualify for the loan on his own. Hoping to find a way to recommend adding a co-borrower, Allen asks whether Monty and his female companion are planning to get married or just live together in the house. Which law does asking that questions violate?

Back 9

An about marriage plans is a violation of ECOA. The only way to ask about marital status under ECOA is to ask the question on one of three acceptable ways:

are you single, married or seperated?

Front 10

What fee can an MLO collect before providing a good faith estimate?

Back 10

lenders and mortgage brokers are forbidden from collecting money from an applicant for any fee-other than a credit report fee, prior to delivering the required disclosures.

Front 11

The type of mortgage that requires regular payment of principal and interest calculated to payoff the entire balance by the end of the loan term is called?

Back 11

fully amortizing

**which requires regular payment of principal and interest calculated to pay off the entire balance by the end of the loan-term.

Front 12

RESPA does NOT prohibit?

Back 12

reasonable fees paid for services actually rendered.

Front 13

Assuming the borrower has a FICO score of 580 or above, the minimum down payment contribution needed for a home with an FHA appraised value of $132,000 is 3.5%

Back 13

The minimum down payment on a FHA loan is 3.5% for a borrower with at least 580.

Front 14

All of these examples illustrate an individual NOT engaged in the business of a loan originator

Back 14

Kirk provides financing for the sale of multiple properties he owns repeatedly and with habitualness (kirk is acting as a loan originator habitually or repeatedly) An individual who acts as a loan originator in providing financing for the sale of a property he owns is exempt from licensure unless that individual engages in such activity with habitualness as kirk does.

Front 15

A loan processor refer to any person who

Back 15

performs administrative or clerical duties related to mortgage loans

Front 16

Fingerprint images are required of every applicant as part of an initial loan originator application in order to

Back 16

conduct a criminal background

fingerprints are required in order to conduct a criminal background check. The applicant must register to obtain a uniques identifier from the nationwide mortgage licensing system.

Front 17

Which is NOT a trigger used to define a high cost loan under the Home ownership and equity protection act

Back 17

excessive prepayment penalty, although prepayment penalties are generally prohibited by HOEPA, the prepayment penalty is not one of the triggers used to identify a high cost loan.

Front 18

Are prepayment penalties used to identify a high-cost loan?

Back 18

No, they are not triggers

Front 19

what are triggers of a high-cost loan?

Back 19

1. excessive annual percentage rate

2.excessive points and fees

3.excessive total finance charge

Front 20

A recorded deed or recorded not and mortgage are, considered to be a constructive notice of title.

Back 20

constructive notice of title means making it public. By recording the documents, they are made public record.

Front 21

Which law sets forth escrow requirements for higher-priced mortgage loans?

Back 21

Truth in lending act

Front 22

According to the SAFE act, which would be considered a task that would require someone to be a licensed MLO?

Back 22

Assisting a borrower in obtaining a mortgage loan by offering to negotiate terms with a lender. Someone to offers to negotiate the terms of a residential mortgage loan requires a license

Front 23

The Home Mortgage Disclosure act provides the data for tracking lender compliance with fair housing law and the equal credit opportunity act

Back 23

the home mortgage disclosure act provides the data for tracking compliance of fair housing and eco a regulations.

Front 24

An amendment to TILA effective June 2013 requires which of the following when extending higher-priced loans?

Back 24

establishment of escrow account for payment of property taxes and mortgage insurance premiums.

**according to the rule published in 2013, a creditor may not extend a higher priced mortgage loan secured by a first lien on a consumer's principal dwelling unless an escrow account is established before consummation for paying property taxes & mortgage insurance premiums.

Front 25

Which are prohibited by RESPA?

Back 25

Referral fees

RESPA was enacted to eliminate referral fees and kickbacks.

Front 26

The loan requested divided by total cost of the project is referred to as?

Back 26

Loan to cost

loan to cost is derived by dividing the loan requested by the total cost of the project.

Front 27

A second mortgage loan that allows the borrower to obtain multiple advances, funds up to an approved amount is known as a ?

Back 27

HELOC

a Home Equity line of credit is a mortgage loan (usually in a second lien position), that allows a borrower to use and payoff, then use and payoff the loan up to a pre-determined amount. It is just like a credit card but secured by real estate.

Front 28

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

Back 28

conviction for felony assault

**crimes related to money laundering and fraud would disqualify an applicant, as would any mortgage broker license revocation by any state.

Front 29

All of these are prohibited to be included in the loan terms for HOEPA covered items EXCEPT?

Back 29

Late fees

late fees are permitted in the loan terms for a HOEPA covered loan, however, keep in mind that late fees are restricted in that they cannot exceed 4% of the past due payment. The other choices are all prohibited.

Front 30

To comply with ability to repay provisions, lenders CANNOT base their evaluation of a consumer's ability to repay.

Back 30

introductory teaser rates

**lenders cannot base ability to repay on teaser rate; they will have to determine the consumer's ability to repay both the principal and the interest over the long term, not during an introductory period.

Front 31

Any advertisement that includes rates or costs that do not apply to loans of all classes made or negotiated by the licensed entity must also include

Back 31

a clear statement that explains these rates do not apply to all types of loans offered (if the rates or costs advertised do not apply to loans of all classes made or negotiated by the lender, this fact shall be clearly indicated in the advertisement

Front 32

Based on 2013 updates to Mortgage Servicing Rules, mortgage services are required to establish or make good faith effort to contact borrowers by day ___ of their delinquency on a loan to inform them of available options to avoid foreclosure

Back 32

36

the updates to the mortgage servicing rules states the mortgage servicer is required to attempt to establish contact by the 36th day of delinquent.

Front 33

What type of illegal mortgage scheme involves collusion among the seller, buyer, appraiser, and lender/broker. In which the property is purchased at a low price, appraised at an inflated price, and then resold at a much higher price?

Back 33

property flipping

**required collusion between the seller, buyer, appraiser, and lender/broker. It occurs when a property is purchased at a low price, appraised at an inflated value without any valid reason for the increase and the resold at a much higher price.

Front 34

Which industry would be the one most likely to falsify a deed?

Back 34

a government worker, participates in a mortgage fraud by falsifying deeds and other records.

Front 35

Section 129C of dodd-franl defines QM loans to be residential mortgage loans that include_____ as a feature?

Back 35

full amortization

**in general a QM must meet these criterias:

1.principal doesn't increase

2.no deferment of principal

3.no balloon payments

4.lender has documented and verified income and financial resources.

5.loan is fully amortized

6.D-T-I regulations met

7.total points are not more than 3% of loan

8.loan is not more than 30 years in length.

Front 36

A borrower who obtains an FHA loan must occupy the property as his principal residence within how many days of signing the security instrument.

Back 36

Bona fide occupancy of property within 60 days of signing deed of trust.

Front 37

According to the 2013 amendment in TILA related to loan originator must retain records sufficient to evidence all compensation it pays to a loan originator for years after the date of payment

Back 37

3 years

Front 38

What type of loan would commonly use an extended rate lock?

Back 38

New construction,

**can take as long as a year to complete, and requires extended rate locks in most cases.

Front 39

Joe has an ARM with an initial rate of 6% and a rate cap 2/6%. Whats the highest his interest rate could be over the life of the loan?

Back 39

With a 2/6 rate cap, the rate can increase 2% each adjustment period to a maximum of 12% over the life of the loan

6%start + 6%lifetime cap

Front 40

Ray is employed to take residential mortgage loan applications for a federally chartered bank. To do this job, ray must be a registered mortgage loan originator.

Back 40

a registered mortgage loan originator is an individual who is registered with and maintains a unique identifier through the nationwide mortgage licensing system and registry.

Front 41

Loan originator compensation requirements is a set of amendments to which federal act?

Back 41

TILA

**the loan originator compensation requirements are a set of amendments to the truth in lending act. With some provisions beaming effective in june 2013 and all provisions having an effective date of january 2014.

Front 42

A borrower closed a loan last week with ABC Mortgage company. Her name is on national do not call registry and on ABC"s internal do not call list ABC.

Back 42

She can not call her because she is on ABC's internal list.

Front 43

Which of the following is NOT a feature of a QM?

Back 43

no interest only period, a QM can have an interest only period.

Front 44

The dodd-frank act definition of a QM includes all of these features EXCEPT?

Back 44

Interest Only loan offerings

**

1.limits on D-T-I

2.No excessive upfront points and fees

3.No terms beyond 30 years.

Front 45

What is NOT a protected class under the fair housing act

Back 45

Age

Front 46

Effective June 2013, annual mortgage insurance for FHA loans above $625,000 will be ___% of loan amount if your down payment is less than 5%

Back 46

effective June 2013, annual MI for loans $625,501 and above will be 1.50% of loan amount if your down payment is 5% or more, or 1.55% of loan amount if your down payment is less than 5%

Front 47

The interest rate charged by the FED to member banks that borrow money against their deposits is called the

Back 47

Discount rate

Front 48

The LOWEST interest rate that banks charge their best commercial customers is called?

**Commercial customers get a PRIZE:) **

Back 48

Prime Rate

Front 49

On the GFE, charges of the loan origination service are

Back 49

summarized, firm estimates subject to a 0% tolerance, but final costs are shown on the HUD-1 settlement rather than the GFE.

Front 50

What is not a penalty that the state regulatory authority may impose on a license who violates state law.

Back 50

The state regulatory authority does not have the authority to impose a prison sentence.

Front 51

Which is derived from average interest rate points and other loan pricing terms offered to consumers by a representative sample of creditors engaged in a mortgage transactions that have low risks?

Back 51

Average prime offer rate or APOR is an annual percentage rate published at least weekly by the CFPB and FFIEC, which is derived from the average interest rates, points, and other pricing terms offered to consumers.

Front 52

On a GFE, the tradeoff table shows the

Back 52

difference between one loan and the same loan with a different interest rate or the same loan with lower settlement charges.

Front 53

Rural development loans are administered by what government agency?

Back 53

Department of Agriculture

Front 54

Ann will make a 20% down payment on her $85,000 purchase. Her loan amount will be

Back 54

the loan amount will be 80% of the purchase price.

Front 55

What term describes the reason why in some state, a married person can not sell real property without the consent and signature of his or her spouse, even though the property and any financing is only in one spouse's name

Back 55

Community property,

while the law differs by state, community property refers to assets owned by a husband and wife jointly regardless of how the property is titled or financed.

Front 56

What is the adjustable number used to compute the interest rate on an ARM called?

Back 56

The Index

-added to the margin on adjustable mortgage is the variable portion go the formula that cause the rate to adjust.

Front 57

Which statement about the Federal Reserve is false?

Back 57

FALSE, The Federal Reserve sets the prime rate

Front 58

A mortgage servicer must wait ___ days before she/he is allowed to file for foreclosure or trustee's sale.

Back 58

per RESPA guidelines a mortgage servicer must wait 120 days before being allowed to file for foreclosure