20 HOUR FINAL STUDY GUIDE Flashcards
A person who takes a residential mortgage solution possible depending on their needs and qualifications
MLO Job description
What is the role of the closing agent?
A third party that preforms loan closings on behalf of the lender
Unique responsibility to the states only?
Grant revoke and suspend licenses
What is the purpose of ECOA?
New law requiring lenders to make credit available equally without discrimination based on race, color, religion, national origin, age, sex, mental status, or receipt of income from public assistant programs
What are the APR threshold for a HOEPA lone?
6.5% above APR for Low risk 8.5% above the APOR
Why is it important for an MLO to remain in good financial standing?
Because we’re in the industry of lending money if you’re financial character doesn’t look good institutions or consumers may question if you’re fit for the job
What is the difference of the charm booklet and early arm disclosures? 
Charm booklet is to educate customers on the pros and cons associated with adjustable rate mortgages
Early arm disclosures, educate customers on their arm that they’re using on their loan specifically
Breakdown of pre-licensing education
20 hours in total 30 hours fed law three hours of ethics two or more hours on standards related to nontraditional mortgages and 12 hours of undefined education
When does respa apply
Govern all federally regulated loans that are secured by residential property
(1-4 unit property)
When doesn’t Respa apply?
25 acres or more
no agriculture loans
no business/commercial
property loans
construction loans
bridge loans nothing
in the secondary market
Who must be licensed in order to write mortgage loans?
MLOS @non-depository institutions
Mortgage brokers
Independent contractors
What type of supporting documentation with a borrower making commission only need to send during processing?
Two years of tax returns
Describe the five different types of industry fraud
Appraisal fraud
Builder bail out
Predatory lending
Chunking
Loan flipping
What are the eight considerations of ability to repay
1 amount of new monthly payment
2 other monthly payments
3 employment
4 income and assets
5 monthly mortgage related obligations
6 DTI and residual income
7 credit history
8 current debt obligations
How is a jumbo loan different from a super conforming loan?
Jumbo loans exceed standard sit by the federal housing agencies, but super conforming loans is if a buyer is in a high cost area and they lower the standards to conform the consumer
These two forms are specific to a VA loan
COE or certificate of eligibility
And VA form 26–1880
What is Respa?
Real estate settlements procedure act providing protection to customers the federal law that governance oversight cost associated with the mortgage and the entire real estate transaction
How long a borrower would need to pay MIP on the FHA loan
MIP on a FHA loan is 11 years for loans with 90% or less if the LTV is higher than 90% mortgage insurance premium stays on for the length of the loan
This disclosure comes from HPA and what does it tell the borrower
Notice of right to cancel PMI
What did the Dodd Frank act do?
Besides strengthening the consumer protection responsibilities, they also established the consumer financial protection, Bureau
What are the prohibited factors under ECOA?
Sex race, color, religion, national Orange, middle age, public assistance, financial counseling, health, status, property location

What are the three most commonly used indicies for adjustments on an arm?
Line at 10% at net 15% and gross at 25%
Describe tangible net benefit
Changes that lower the payment overtime for example lowering the interest rate or eliminating a balloon payment
Describe the 4 forms under BSA/AML
Fin cen form 104
Currency transaction report
Form 105 report of international transportation report of foreign in financial accounts and suspicious activity report
Used to inform consumers about credit through disclosures about its terms and cost
What is the purpose of Tila
What is negative amortization
Happens when you are not paying enough to cover all of the interest due loan balances goes up instead of down
Who is the mortagagor
Borrower
What is the difference between simple interest rate and APR?
Simple interest is paid only on the original principle of the loan
APR includes all financing cost. It provides a clear picture of the cost of the loan. 
What does Tila say about advertisements?
Only available credit terms may be advertised
Any disclosure of information and ad must be clear
If the APR can change after consideration, you must say it
If you use trigger terms like down payment, you must say amounts terms, and spell out APR fully annual percentage rate
List out a characteristics of a qualified mortgage
Points and fees kinetic 3% of the loan amount for loans greater than or equal to $130,461 or 8%
Arms are underwritten based on the maximum interest rate in the first five years 5 to 1, seven to one, 10 to 1 hybrid arms
Income assets are verified and documented
No negative or interest only payments
Fix rate mortgages are underwritten based on a fully schedule
Maximum term is 30 years or less
No balloon payments two times or more than normal payment
APR over APO must be less than the following limits for loan limits
What time frame are you allowed to contact client in?
8 AM to 9 PM in their time zone
What is non-public personal information or NPPI
Information like Social Security, your bank account, balance, etc.
What are three ways that a loan can become a section 32 loan under Tilla what are all the names for this type of loan?
If the fees 5% on loan amount of $26,092 or more or total points in fees compared to the loan amount if the loans APR is more than 6.5% above the APO 8.5% for a mobile home
List the sections of TILA and briefly describe their purpose
Section 32 homeowner equity protection act provides protection for borrowers receiving high cost loans
Section 35 higher priced mortgage loans
Made to help customers who have qualification limits
Section 36
The loan originator rule CFPB added this to address the concerns over the influence of compensation for MLOS
Fair credit reporting act versus FACTA
Fair credit reporting act insurance customers accurate, and fair credit reporting by credit reporting agencies
Factor was born to prevent identity theft mainly was invented because of the boom of the Internet
Two disclosures that come from TRID
Loan estimate and closing disclosure
Describe the steps in the title process
Title
Completed title report
Technical review
Preparation of commitment
Title insurance
Who draws the flood zone map who determines if flood insurance is needed?
Special flood, hazard area SFHA 
How many state in territorial mortgage regulated entities are there?
59
What is another name for the safe act?
Secure and fair enforcement act
T OR F
A non-conventional loan can only be used to finance primary residencies
False
T AND F
Only the main borrow has the right to send if it apply transaction
False
In order to verify collateral and underwriter will take a look at the appraisal in the home inspection
True if they also have an home inspection
T OR F
A first time VA homebuyer with a 0% down payment wire set funding fee of 2.15%
True
T or F
All non-conventional loans are government backed
True
T or F
A conventional loan is a private loan meaning it is not back by the government
False
HMDA detects patterns of discrimination in landing transactions, true or false
False
The FHA requires counseling
False
The three payment types on an option. ARM are flat payments, fully amassed payments and principal only payments true or false.
True
The margin is the lenders profit and remain the same the entire time of the loan
False
Caps or voluntary limits as to how high or high low and interest rate on arm can adjust at any given time true or false
True
BSA/AML is overseen by the department of treasury and fINCen
True 
Tila gives us terminology of adverse action, true or false
False that is Ecoa
UFMIP stands for up Fort mortgage insurance premium t or f
True
The most common approach in appraisal is the cost approach
False
Section 8 of the Ula requires Amos to ask about borrowers race, ethnicity and sex 
True
The URAR is form 1003
True or false
False form 1003 is the urla
The three types of reverse mortgages are single purpose, proprietary, and FHA hecm
True
When there is a change in circumstance, we will redisclose the LE to our Borrower
True
Eco requires at the lender submits the L/AR yearly t or f
False
For ctlv we take combined balances of all liens or loans that a borrower has
T or F
False only house
True or false adverse action means credit is approved
False
