Chapter 1 Laws Regulation Flashcards
Which of the following is part of the Mortgage Assistance Relief ServicesRule?
A. Negotiators may be paid an up-front fee
B. Borrowers must pay a fee if they cancel their contract with the
negotiator
C. Negotiators can’t interfere with communication between borrowers andlenders
D. Negotiators only have to present reasonable lender offers to the
borrower
C
Borrowers are entitled to a free credit report if the lender takes adverseaction against them and they ask for their report within how many days of receiving notice of the action? A. 30 B. 60 C. 90 D. 120
B
What should a loan originator do on a Loan Estimate address field when the borrower requests a pre-approval?
A. Leave it blank
B. Enter one or more zip codes of likely locations
C. Enter the applicant’s personal address
D. Deny the loan application
B
The APR must be finalized at least how many days before closing? A. 1 B. 3 C. 5 D. 7
B
The APR must be finalized at least three days before closing - Also final Til
3 days after application - delivered within
7 business days after initial application placed in mail
3 business days prior to closing - Final Til (APR)
****You are working on a file referred to you by a realtor. The realtor calls you to see if there is going to be any problem getting the customer qualified. The realtor wants to know what the borrower’s credit scores are before presenting the offer.
The most appropriate course of action is to:
A. refer the realtor to the borrower.
B.never disclose a borrower’s information to a realtor.
C. obtain permission from the borrower to disclose the information.
D. tell the realtor the credit score.
A
HUD-1 is used for what type of mortgage? a. Refinance B. Reverse and all 1-4 unit residential property C. ARMs D. QM
B
HUD-1 for reverse mortgage and TILA for refinance
The HUD-1 Settlement Statement/Closing Disclosure is required to be usedas the standard real estate settlement form in all transactions in the United States that involve federally-related mortgage loans and have closing costs for the borrower.
The Truth-in-Lending Act (TILA) was implemented by the: A. Federal Reserve Board B. Fannie Mae C. Federal Bureau of Investigation D. Federal Express
A
The HUD-1/Closing Disclosure is not required if? A. Borrower has no closing cost B. If it’s a reverse mortgage C. If the consumer rescinds the offer D. If there is no appraisals
Answer: A
The HUD-1/Closing Disclosure isnot required if the borrower has no closing costs.
All of the following loans are covered by HOEPA except: A. Purchase Money B. Home Equity C. Refinances D. Reverse Mortgages
D
HOEPA covers Purchase Money Mortgage, HEL, and Refinance loan
What type of balloon mortgage is allowed in a HOEPA loan? A. Short term bridge loans B. Interest Only Loan C. Long Term Balloons D. None of the above
A
What conditions must be satisfied before a foreclosure proceedings can take place?
A. The borrower agrees to mitigation
B. the servicer determines that the borrower is ineligible for mitigation and has no more possible appeals; the borrower declines any offers, or the borrower fails to honor the terms of an agreement.
C. When the lender successfully uses the borrower
D. When the judgement decides on the case
B
The Fair Credit Reporting Act is enforced by: A. HUD B. FCC C. FHA D. FTC
D
Regulation Z requires an initial ARM interest rate adjustment notice must be provided toconsumers:
(a) between 15 and 45 days before the first payment at the adjusted level is due.
(b) between 30 and 60 days before the first payment at the adjusted level is due.
(c) between 180 and 210 days before the first payment at the adjusted level is due.
(d) between 210 and 240 days before the first payment at the adjusted level is due.
D
The rule defines small creditors as businesses with less than $2
billion in assets and fewer than 500 closed-end, first-lien residentialmortgages in the previous year is defined by which of the following
A. FHA
B. QM ATR
C. RHS
D. Fannie Mae
Answer: QM loan Small Creditor Exception
As defined under TRID, charges for third-party services and recording fees paid by or imposed on the consumer are grouped together and subject to a 10% cumulative tolerance.
Which of the following charges is subject to the 10% cumulative tolerance?
(a) Amounts placed into an escrow, impound, reserve or similar account.
(b) Charges paid to third-party service providers for services not required by the creditor.
(c) Charges for third-party services where the charge is not paid to the creditor or the creditor’s affiliate.
(d) Fees paid to an unaffiliated third party if the creditor did not permit the consumer to shop fora third-party service provider for a settlement service.
C
ECOA allows an applicant to have a copy of his: A. Credit score B. Credit report C. Property appraisal report D. Bank records
C
According to MDIA, what is the waiting period once initial disclosures are provided to the borrower before the loan can close?
- 10 business days
- 7 business days
- 5 business days
- 3 business days
7 business days
The applicant and MLO is almost complete with the LE when the MLO notices that there is an increase in the interest rate. What should an MLO do?
A. With the borrower permission, revise the loan estimate and increase the closing cost on an unlocked loan
B. With the borrower permission, revise the loan estimate and increase the closing cost on an locked loan
C. With the lenders approval, With the borrower permission, revise the loan estimate and increase the closing cost on an unlocked loan
D. With the lenders approval, With the borrower permission, revise the loan estimate and increase the closing cost on a locked loan
A
****A borrower wants to purchase a 2nd home and tells you that they intend to rent the property out when they are not living in it. You have reviewed their financial information and realize that the borrower would qualify for financing if the property is classified as a2nd residence. However, if the property is classified as an investment property, the borrower is unlikely to qualify. What should you do?
A. Classify the property as a rental property even though the borrower intends to reside there part of the year.
B. Classify the property as a 2nd residence; since the borrower intends to use the property for part of the year, this is acceptable.
C. Classify the property as a 2nd residence because it is not legal for the borrower to
personally reside in a property classified as a rental for any length of time.
D. Deny the borrower because it is neither legal to rent out a 2nd residence or reside in a rental property for any length of time.
A
How many days does lenders have to refund refund any excessive variance between the GFE and the HUD-1? A. 30 days B. 60 C. 90 D. 120
Answer: B
Lenders have 30 days to refund any excessive variance between the GFE and the HUD-1.
A change to which of the following does NOT trigger a new 3-daywaiting period?
A. Seller credits buyer money for landscaping
B. APR
C. Loan product
D. Addition of a prepayment penalty
A
Which of the following for must be made available, upon request by the borrower (for reverse mortgages) one business day prior to closing for the settlement statement? A. LE B. GFE C. HUD-1 D. FNMA 1003
Answer C
Settlement statement for reverse mortgage is a HUD-1
If a Loan Estimate is mailed, It must be mailed how many days before loan consummation? A. 1 B. 3 C. 5 D. 7
D
The HUD-1/Closing Disclosure is not required if? A. Borrower has no closing cost B. If it’s a reverse mortgage C. If the consumer rescinds the offer D. If there is no appraisals
Answer: A
The HUD-1/Closing Disclosure isnot required if the borrower has no closing costs.