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36 Cards in this Set
- Front
- Back
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Which is NOT a purpose for the Mortgage Servicing Disclosure Statement? a.to disclose the percentages of the loan closings this lender has serviced in the last 3 years. b.to explain the resolution of "servicing complaints", required by law. c.to inform the consumer the likelihood that the mortgage could be sold. d.to inform the consumer the likelihood that the servicing of the mortgage will be sold. |
C. to inform the consumer the likelihood that the mortgage could be sold. |
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After investigating a charge of fraud against loan originator Mark, the state regulatory authority permanently withdraws his license, what is this known as? a.cancellation b.revocation c.suspension d.termination |
b.revocation
**revocation is the permanent withdrawal of a license. When a state's regulatory authority revokes a license, the loan originator must be notified in writing that the license is revoked and that the individual may not engage in the business of loan originating in the state. |
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Which of the following is NOT a feature of a QM? a.debt-to-income ratio of 45% b.loan term of 30 years. c.no interest only period d.no negative amrtization |
a.debt-to-income ratio of 45%
**the debt -to-income ratio for a QM must not exceed 43% |
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A mortgage loan originator must retain evidence of compliance with the Truth in Lending act for at least___ years after disclosure were required to be made. |
2
**a lender must retain evidence of compliance with TILA disclosure requirements for at least two years after the disclosures were required to be made. |
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Jim notices that the applicants w-2s look funny. Upon closer examination, he sees that the amount withheld for social security is much too low for the supposed income. This should raise a red-flag to jim related to a.ability to repay b.identity theft c.compensation rules d.consumer privacy |
a.ability to repay
**an issue with the income could be the basis for concern about the borrower's ability to repay. In this case, the discrepancy in the W-2 could also be a red flag warning of possible documentation fraud. |
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What is the legal clause that gives the lender certain stated rights when there is a transfer of ownership in the property? a.accleration clause b.alienation clause c.power of sale clause d.subordination clause |
b.alienation clause
**alienation clause gives the lender certain stated rights when there is a transfer of ownership in the property. |
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Why are extra cash reserves required in a construction loan? a.to lower the risk for the lender b.to pay for added time delays that result in more payments c.to pay for cost overruns d.all of the above |
c.to pay for cost overruns |
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Which household does NOT qualify as a protected class under the familial status clause of the fair housing act? a. familiy with a single parent and children b. grandparents raising their grandchildren c.pregnant woman d. married couple
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d.married couple
familial status refers to households that include individuals under the age of 18 who either live with parents or legal custodians. This protection also extends to pregnant woman or any person in the process of obtaining legal custody of a child under the age of 18. |
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Under ECOA, providing different terms of financing for a potential borrower who has poor credit scores due to a recent bankruptcy is considered. |
Acceptable
**an individual with a recent bankruptcy on his credit report may be offered different terms of financing due to a poor credit score. Not all borrowers are entitled to receive the same terms based on their financial qualifications. |
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All of the following would be considered evidence of adverse credit history EXCEPT
a.open collection account or charged off account that remains unpaid. b.outstanding tax-lien c.outstanding unpaid hospital bill d.personal bankruptcy within the previous year. |
c.outstanding unpaid hospital bill
**an outstanding medical bill is considered an exception when reviewing credit history. |
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MLO rob needs the patriot act form signed but cannot reach the borrower. The borrower is someone Rob has known since high school and is quite sure he is not a terrorist. Rob cuts and pastes the borrower's signature into the form and scans it to his email. What type of fraud is this? a.fraud by deception b.material misstatement c.material omission d.misrepresentation
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d.misrepresentation
**any form of altered documentation is considered misrepresentation |
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Which of the following is correct regarding third party processing companies?
a.they are not required to be licensed as a mortgage broker b.they are required to be licensed as a mortgage broker c.they are required to be licensed as mortgage loan originator d.they are required to be licensed as a mortgage loan servicer. |
a.they are not required to be licensed as a mortgage broker.
**third party processors are not required to be licensed as a loan originator, servicer, or broker. |
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A borrower is defined as any person who |
is obligated to repay a mortgage loan. |
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For which situation would the sales comparison approach be best?
a.a commercial building in a residential neighborhood b.a condo in a complex with high turnover c.a recently constructed building with custom features d.a unique, octagon shaped home in neighborhood of ranches |
b. a condo complex with a high turnover
**the sales comparison approach is not suitable for special purpose properties and other unusual or unique properties for which there are not recent sales data to analyze. |
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A direct endorser is a lender who is authorized to underwrite what type of loan applications?
a.conforming b.FHA c.non-conforming d.VA |
a. FHA
**DE are authorized to underwrite their own FHA loan applications and are responsible for the entire loan process through closing. |
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Which federal legislation allows a borrower 3 business days to reconsider an owner-occupied refinance transaction?
a.ECOA b.FCRA c.HMDA d.TILA |
TILA
**TILA allows 3 business days to rescind. |
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Which language in an advertisement placed by a mortgage broker would NOT be prohibited? |
5% APR, available to qualified applicants
**stating the APR in an advertisement is allowed. |
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Anderson mortgage co. has decided to outsource it's loan processing activities to Total Processing, Inc. Pursuant to their agreement, Anderson pays total $300 per file when the loan closes and nothing for files that do not close, Is this a violation of RESPA?
a.no,it is not a violation because Anderson only pays when a file closes. b.no, it is not a violation of RESPA to pay someone for ervices performed. c.yes, it is a violation because Anderson only pays when a file closes. d.yes,it is a violation of RESPA because Total Processing, Inc is not licensed. |
b. no, it is not a violation of RESPA to pay someone for services performed.
**it is not a violation to pay for services performed. |
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Identify which attribute is NOT considered illegal discrimination in granting credit under the Equal Credit Oppourtunity Act.
a.color b.income c.race d.sex |
b. 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. |
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Market price is
a. the amount, in dollars, actually paid for the property b.the amount, in dollars, that a property should bring on the open market c.the amount, in dollars, that a property should bring on the open market d.equal to market value. |
a. the amount,in dollars, actually paid for the property.
**market price is what the property actually sold for, and it is highly likely this is different from the asking price (the price the seller asked for the property when it was first put on the market) or the offering price (the price the buyer first proposed to buy the property for). |
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Which property transaction is governed by RESPA? a. buyer assumes an existing first lien loan b.loans on any vacant land c.loans used to finance the purchase of 100 acres or more d.property improvement loans |
d. property improvement loans
**RESPA, does not apply to loans used to finance the purchase of 25 acres or more, vacant lad, or transactions where the buyer assumes, or takes subject to, an existing first-lien loan. A property improvement loan would come under RESPA. |
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What federal legislation regulates credit reporting agencies and lenders concerning credit reporting?
a.ECOA b.FCRA c.HMDA d.TILA |
b. FCRA
**FCRA governs the credit reporting agencies and users of credit reports (lenders) to ensure accurate information is reported and the customers information is protected from identity theft. |
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According to the Truth in Lending Act, which of these would be EXCLUDED from the finance charge?
a.interest b.credit report fee c.points d.seller's points |
d. seller's points
**among other things, seller's points are not included in the finance charge. The other choices would be included in the finance charge. |
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Which is NOT under the responsibility of and enforced by the CFPB? a. federal fair housing act b.home ownership and equity protection act c.real estate settlement procedures act d.truth in lending act |
a. federal fair housing act
**the federal fair housing act is overseen by HUD |
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At what point is a lock-in agreement binding?
a. as soon as all required disclosures are presented to the applicant b.as soon as both the applicant and the lender sign it c.once the borrower expresses a verbal desire to continue d.only if the prevailing interest rate rises above the rate in the lock-in agreement |
b. as soon as both the applicant and the lender sign it
**a lock-in agreement is binding as soon and the applicant and lender sign it. |
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Vincent Collins is head of the Family Mortgage corp. Two of his sons, michsel and sonny work for the business as licensed mortgage loan originators. His third son, Fred, is not licensed and processes loans for the business. Which of the following would be unethical for Fred to do?
a.to advise a borrower who applied for a loan to get a fixed rate rather than an ARM b.to call a borrower's employer to verify employment c.to speak to a borrower regarding information appearing on their paystubs d.to talk about the family business with anyone outside the family |
a. to advise a borrower who applied for a loan to get a fixed rate rather than an ARM
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Which information will a mortgage loan originator NOT gather while taking a loan application? a. employer b.future income c. schedule of property owned d. social security number |
b. future income
**future income can never be used in underwriting to approve a loan application. |
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Which law prohibits MLOs from influencing an appraiser to overstate the value of a home in order to get a closed-end loan on the borrower'd primary residence approved?
a. regulation b b. regulation c c. regulation x d. regulation z |
d. regulation z
**the truth in lending act prohibits lenders, mortgage brokers, and their affiliates from coercing, influencing, or encouraging an appraiser to misstate the value of the dwelling |
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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 |
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. |
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Lenders of a high-cost loan are NOT permitted to consider the borrower's___using commercially reasonable practices. |
familial status or age
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whose signature is forged in a deed scam? |
buyer |
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If a borrower does not have the required amount to pay closing fees, a mortgage loan originator may lawfully |
lower the fee amount by forfeiting a portion of the broker's commission.
**a mortgage loan originator is permitted to lower an agreed upon fee to facilitate a loan closing. |
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The estimate for the interest rate shown on a GFE must be available for |
There are no time restrictions.
**while the estimate for most settlement charges must be available for at least 10 business days, there are no restrictions on the amount of time an interest rate must remain available. |
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According to TILA definition, which is NOT considered a dwelling? a. a condo b.a cooperative unit c.a mobile home d.a 6-unit apartment building |
d. a 6-unit apartment building
** a dwelling is defined as a residential structure that contains 1 to 4 units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence. |
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Bob meets with a loan originator at x mortgage co. to inquire about a loan. His name is on the national do not call registry. x co.
a.can call bob for up to 3 months from the meeting date. b.can call bob for up to 12 months from the meeting date c.can call bob for up to 18 mtgs from meeting date d.cannot call bob because he is on the national do not call registry |
a. can call bob for up to 3 months from the meeting date.
even though he is on the National do not call registry, xyz and bob now have an established business relationship, and xyz can call bob for up to 3 months from meeting. |
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two of the major components of the dodd-frank wall street reform and consumer protection act are |
the two titles, consumer financial protection act and the mortgage reform and anti-predatory lending act |
