Chapter 10 free questions Flashcards
When an assignor keeps the servicing rights this is known as:
A. Selling a loan with escrow impounds
B. Selling a loan with servicing released
C. Selling a loan with servicing retained
D. Selling a loan pro norma
C
Which appraisal method subtracts a value for depreciation? A. Sales comparison B. Cost C. Income capitalization D. Gross income multiplier
B
Cost Approach (Construction Loan) =the appraiser estimates the cost to reproduce or replace the structures as if they were new; he subtracts a value for depreciation because the structure is not new, and adds in the value of the land and. improvements such as landscaping or a driveway.
How many months must be left on an installment charge in order to be included as a debt? A. More than 1 month B. More than 3 months C. More than 5 months D. More than 10 months
D
Which of the following does NOT have zero variance between the GFE and HUD-1? A. Title insurance B. Real estate transfer taxes C. Loan origination fees D. Interest rate
A
Borrower's equity equals: A. Appraised value - loan balance B. Appraised value - down payment C. Loan balance + down payment D. Loan balance - down payment
A
What law protects homeowners from foreclosure-prevention scams?
A. Foreclosure Mediation Rule
B. Mortgage Assistance Relief Services Rule
C. Truth-in-Lending Act
D. Homeowner’s Protection Act
B
Which law requires that the Special Information booklet be given to borrowers? A. Truth-in-Lending B. Real Estate Settlement Procedures Act C. Homeowner's Protection Act D. The Equal Credit Opportunity Act
B
^^^When a lender sells a mortgage loan to another lender this is called: A. Assignment of a mortgage B. Note transfer C. Vendor selling D. Linking a mortgage
A
Which form is used as the standard settlement form? A. HUD-1/Closing Disclosure B. FHA Closing Statement C. USA Settlement Statement D. National Closing Statement
A
Which form is used to verify bank accounts? A. Fannie Mae 1006 B. Fannie Mae 1005 C. Fannie Mae 1008 D. Fannie Mae 1003
A
Which of the following is NOT a common type of mortgage fraud? A. Rehabilitation B. Equity skimming C. Inflated appraisals D. Property flipping
A
According to the GLB Act, an individual who obtains or has obtained a financial product or service from a financial institution is a A. borrower. B. consumer. C. creditor. S. customer.
B
Individuals must file a report when they transport how much cash out of the country? Mark one answer: $5,000 or more $10,000 or more $50,000 or more $100,000 or more
10,000
mortgage is the:
A Document that conveys title
B. Pledge of the property as collateral for the loan
C. Borrower’s IOUc
D. Document that transfers contractual rights to another investor
B
The borrower does NOT sign which document: A. Deed B. HUD-1/Loan Disclosure C. Mortgage D. Note
A
The condemnation of private property for public good is: A. Eminent domain B. Escheat C. Disintermediation D. Intestate
A
^^^In a completion escrow account, what is the minimum estimated repair cost held in trust by the lender? A. 50% B. 90% C. 120% D. 200%
C
Who is responsible for completing the HUD-1/Loan Disclosure? A. The borrower B. The closing agent C. The loan originator D. The grantor
B
Which law entitles an applicant to a copy of his property appraisal report?
A. Homeowner’s Protection Act
B. The Fair and Accurate Credit Transaction Act
C. Truth-in-Lending
D. The Equal Credit Opportunity Act
D
The appraisal approach that best applies to residential property is: A. Sales comparison approach B. Cost approach C. Residential approach D. Income capitalization approach
A
One discount point equals one percent of the Mark one answer: A. Purchase price B. Annual percentage rate C. Loan amount D. Appraisal amount
C
How much of a down payment does a borrower need if he doesn't want to pay PMI? A. 5% B. 10% C. 15% D. 20%
D
Which form is used to verify employment information? A. Fannie Mae 1006 B. Fannie Mae 1005 C. Fannie Mae 1008 D. Fannie Mae 1003
B
-A gift letter does NOT include the: A. Donor's name B. Amount of the gift C. Terms of repayment D. Donor's address
C
Fannie Mae's automated underwriting system is known as: A. Loan Prospector (LP) B. Desktop Underwriter (DU) C. Daniels Underwriting System (DUS) D. Limited Portfolio (LP)
B
Which of the following is NOT a loan origination activity?
A. Assisting in a refinance
B. Assisting in a purchase loan
C. Assisting in a loan modification
D. Changing the name of debtors on an existing loan
C
How many years of home addresses are required on the typical loan application? A. 1 year B. 2 years C. 3 years D. 4 years
B
Which of the following is NOT characteristic of a warranty deed:
A. Guarantees the seller is true owner of the property
B. Guarantees the seller has the legal right to sell
C. Guarantees that there are no undisclosed liens on the property
D. Guarantees that the sale price is fair and reasonable
D
^^^What is the Fannie Mae appraisal report form? A. USPAP B. HVCC C. USAPP D. URAR
D
What is a clause in the deed that limits the future use of a property? A. Deed restriction B. Encumbrance C. Title lien D. Owner's privilege
A
HMDA requires lenders to submit their loan application registers to the:
Mark one answer:
A. Library of Congress
B. Federal Financial Institutions Examination Council
C. Federal Department of Books and Records
D. Nationwide Mortgage Licensing System and Registry
B
Which of the following is NOT beneficial to a developer? A. Blanket mortgage B. Subordination clause C. Development clause D. Partial release clause
C
The economic concept which states that a knowledgeable buyer will pay no more for one property than they would pay for an equally desirable comparable property is: A. Principle of substitution B. Principle of highest and best use C. Principle of market value D. Principle of intelligent purchases
A
The most common type of legal description for residential subdivisions is: A. The monument method B. Lot and block C. Metes and bounds D. Government land survey method
B
Liens which are subsequent to the first recorded mortgage lien are known as: A. Junior liens B. Unavailable liens C. Estoppel liens D. Homestead liens
A
The borrower's IOU is the: A. Mortgage B. Note C. Loan-to-Value Ratio D. Equity
B
The mortgagee is the: A. Borrower B. Lender C. Closing agent D. Mortgage broker
B
Which law requires lenders to train employees to recognize the Red Flags of identity theft? A. Homeowner's Protection Act B. Fact Act C. Gramm-Leach-Bliley D. Dodd-Frank
B
Which lien will most likely have the lowest lien position? A. Property tax B. Senior mortgage C. Junior mortgage D. IRS tax lien
D
What term has the highest priority and is paid off first when a property is sold? A. Property tax B. Senior mortgage lien C. Mechanic's lien D. Judgement lien
A
Which of the following is NOT a loss mitigation option? A. Loan modification B.Refinance C. Deed-in-lieu D. Foreclosure
D
The Ability to Repay Rule applies to almost all closed-end consumer credit transactions se-cured by a dwelling including:
a. reverse mortgage loans.
b. subordinate lien loans.
c. time-share mortgage plans.
d. home equity lines of credit.
B
Which document is usually NOT recorded? A. Assignment of mortgage B. Note C. Deed D. Mortgage
B
A note is the:
A Document that conveys title
B. Pledge of the property as collateral for the loan
C Borrower’s IOU
D. Document that transfers contractual rights to another investor
C
A five bedroom, one bathroom house is an example of: A. Appreciation B. Functional obsolescence C. Economic obsolescence D. Residential allowance
B
The most probable price which a property should being in an open market A. Median price B. Market value C. Going rate D. Insurance value
B
Loan originators aren't allowed to receive compensation: A. Based on loan terms B. From a consumer C. From a lender D. Based on the performance of the loan
A
The national trade association and voice of the abstract and title insurance industry is: A. TICOA B. ATC C. ALTA D. TITLE NOW
C
The liquidation of a debt by regular, usually monthly, installments of principal and interest is: A. Amortization B. Hypothecation C. Assignment D. Novation
A
What law allowed the government to assume control over Fannie Mae and Freddie Mac? A. Homeowner's Protection Act B. Housing and Economic Recovery Act C. Home Mortgage Disclosures Act D. Truth-in-Lending Act
B
Which of the following does include the Right of Survivorship? A. Good Faith Estimate B. Tenants in Common C. Joint Tenancy D. Truth-in-Lending disclosure
C
The assignee of a mortgage and note is participating in the: A. Primary lending market B. Capital market C. Secondary mortgage market D. Options market
C
A lender that works with licensed loan originators is a: Mark one answer: A. Participating lender B. Private lender C. Wholesale lender D. Retail lender
C
A borrower is buying a house for $180,000. He provides a down payment of $40,000. If he pays three discount points, what is the total cost of the points? A. $4,200 B. $6,000 C. $5,400 D. $4,667
A
Insurance companies not willing to deal directly with borrowers, usually pay a loan servicing and preparation fee and make real estate mortgage loans to purchase indirectly through: A. Savings and loan associations B. FHA or VA C. Mortgage Companies D. Freddie Mac
C
Which clause allows the lender to increase the interest rate? A. Acceleration clause B. Escalation clause C. Deficiency judgement D. Exculpatory clause
B
The highest and best use of the property is NOT:
A. Legally permissible
B. Physically possible
C. Financially feasible
D. Based on possible future zoning changes
D
Higher-priced loans for a flipped home require a second appraisal that is:
A. Performed by a different appraiser at no charge to the borrower
B. Performed by a different appraiser and paid for by the borrower
C. Performed by the same appraiser using different comparables at no charge to the borrower
D. Performed by the same appraiser using different comparables and paid for by the borrower
A
When there is no new note and the original buyer retains all the liability, this is known as transferring title by: A. Creative financing B. Assumption C. Novation D. Subject to the mortgage
D
The VA guarantee covers up to what amount of the of the veteran’s entitlement?
a. 25% coverage
b. Four times the amount of the loan
c. Half the amount of the loan
d. Four times the amount of the veteran’s entitlement
D
In order to be counted as income, retirement income must continue for how long after the loan application is signed? A. 1 year B. 2 years C. 3 years D. 4 years
C
Which of the following methods of disclosure does NOT meet the requirements of the Equal Credit Opportunity Act (ECOA)? A. E-mail B. Mailed letter C. Telephone D. Faxed letter
C
A borrower gets a 15-year interest-only loan for $85,000 at 6%. At the end of the loan term, how much will the borrower owe the lender?
a. $0
b. $79,900
c. $85,000
d. $90,100
C
How many months must be left on a car lease payment in order to be included as a debt?
A. More than 1 month
B. More than 5 months
C. More than 10 months
D. Automobile lease payments are always included
C
The act of lowering the priority of a mortgage lien is: A. Reduction B. Subordination C. Degradation D. Subtraction
B
What is the most important type of comparable used in the sales comparison approach? A. Active B. Pending C. Closed D. Expired
C
A salaried employee may have to produce which of the following documents to obtain a loan? A 90 day pay stubs B. 2 years W2s C. Profit and loss statement D. Balance sheet
B
Which of the following is part of the Mortgage Assistance Relief Services Rule?
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 and lenders
D. Negotiators only have to present reasonable lender offers to the borrower
C
Increasing neighborhood crime exemplifies what type of depreciation? A. Economic obsolescence B. Functional obsolescence C. Physical deterioration D. Unstable deterioration
A
Which of the following is NOT a characteristic of a Tenants in Common form of ownership: A. Equal shares B. Buy at different times C Right of survivorship D. Ability to will shares
C
How long after the application date must social security payments continue to be received in order to count as income? A. 3 months B. 10 months C. 2 years D. 3 years
D
Notice which is recorded is known as: A. Constructive notice B. Actual notice C. Selective notice D. Lis pendens notice
A
What is the practice called when a real estate agent spreads the rumor that a specific ethnic group is planning to move into the neighborhood and advises residents to sell before the property values drop? A. Redlining B. Steering C. Blockbusting D. Conversion
C
What type of loan is short-term with money advanced in stages? Mark one answer: A. Package B. Construction C. Wraparound D. Balloon
B
The lender has how many days to send the Satisfaction of Mortgage letter to the borrower once the loan balance is paid? A. 30 days B. 60 days C. 90 days D. 120 days
B
Which of the following is NOT required for self-employed qualification? A. 2-year business tax returns B. 60-day paystubs C. Company balance sheet D. Company profit-and-loss statement
B
All of the following apply to a mortgagor’s title insurance policy EXCEPT:
A. It is for the amount of the purchase price
B. It is based on loan amount
C. It is optional
D. It is not transferable
B
A lender's refusal to lend in a particular neighborhood is known as: A Referential lending B. Redemption C. Railroading D. Redlining
D
If two credit scores are obtained for a single borrower the representative score that is usually used is:
A. The higher score
B. The lower score
C. It doesn’t matter
D. Whatever is the policy of the Mortgage Broker business
B
^^^Under the federal fair housing law, the seven protected classes include:
A. Race, color, source of income, handicap, national origin, marital status, religion
B. Race, color, religion, sex, handicap, familial status, national origin
C. Race, sexual orientation, sex, familial status, handicap, age, national origin
D. Race, color, age, religion, sex, handicap, familial status
B
FHA protects RC RN Familial Status and Disability
Notice which is NOT recorded is known as: A. Constructive notice B. Actual notice C. Selective notice D. Lis pendens notice
B
The maximum age limit for a borrower is: A.62 B. 75 C. 85 D. There is no maximum age limit
D
Which law is known as Regulation C? A. Real Estate Settlement Procedures Act V. Truth-in-Lending C. Equal Credit Opportunity Act D. Home Mortgage Disclosure Act
D
Which law is known as Regulation B? A. Truth-in-Lending B. Real Estate Settlement Procedures Act C. Equal Credit Opportunity Act D. Patriot Act
C
The title company considers unpaid property taxes to be an: A. Encroachment B. Encumbrance C Easement D. Egress
B
pledging of property as collateral for a loan: A. Defeasance B. Hypothecation C. Exculpation D. Intermediation
B
Freddie Mac's Automated Underwriting system is known as: A. Loan Prospector (LP) B. Desktop Underwriter (DU) C. Daniels Underwriting System (DUS) D. Limited Portfolio (LP)
A
Which law is also known as Regulation X? A. Truth-in-Lending B. Real Estate Settlement Procedures Act C. Homeowner's Protection Act D. The Equal Credit Opportunity Act
B
deficiency judgement occurs when a:
A. Borrower needs additional down payment funds
B.Seller wins a breach of contract lawsuit against the buyer
C. Lender sues for borrower’s personal assets to pay balance of the note
D. Borrower needs additional private mortgage insurance
C
The receiver of the deed is the: A. Grantee B. Grantor C. Mortgagee D. Assignee
A
Under the CFPB, the following groups are identified as types of consumer and protection laws EXCEPT
A. Credit Authorization and Security.
B. Financial Disclosure.
C. Privacy Protection and Consumer Identification.
D. Prohibition of Predatory Lending.
A
The use of borrowed funds to increase yield is: A. Leverage B. Acceleration C. Defeasance D. Forbearance
A
Individuals submit an annual Report of Foreign Bank and Financial Accounts to: A. IRS B. Mortgage lender C. Federal Trade Commission D. Fannie Mae
A
A loan offered to a consumer with poor credit is known as: A Subjugation B. Alternative C. Preliminary D. Subprime
D
guarantor or co-signer signs the: A. Mortgage B. Note C. Deed D. Mortgage and the note
B
Although not responsible for making monthly payments on the loan, the co-signer is held responsible for repayment if the borrowers default. As such, the co-signer signs all loan documents including the application, the mortgage promissory note and the loan agreement, but she does not sign the MORTGAGE OR DEED OF TRUST
Which law requires businesses to print only the last five card numbers on a credit card receipt? A. Homeowner's Protection Act B. Fact Act C. Gramm-Leach-Bliley D. Dodd-Frank
B
All of the following types of income are non-taxed and therefore can be "grossed-up," except: Alimony Social Security Disability Public assistance
Alimony
A fee charged to the borrower for determining whether or not a property was in a flood zone is a: A. Mapper fee B. Flood certification fee C. FEMA fee D. Reviewer fee
B
What type of mortgage fraud scam occurs when a buyer borrows the down payment from the seller without the lender's knowledge? A. Equity skimming B Air loan C. Silent second D. Property flipping
C
In order to send a fax, advertisers must:
A. Have an established business relationship with recipient
B. Only fax to toll-free numbers
C. Include a personal cell phone number on the cover sheet
D. Not send faxes across state lines
A
The most accurate type of legal description for residential subdivisions is: A. The monument method B. Lot and block C. Metes and bounds D. Government land survey method/p>
C
Metes and Bounds Method (Most Accurate) = Method is the most accurate and involves a surveyor measuring the distance (metes) and direction (bounds) between the metal plaques in the corners of the property. The direction of a boundary line is expressed using compass directions and is given in degrees, minutes and seconds. Distances are measured in feet. The surveyor must start and end hismeasurements at the same place (the Point of Beginning (POB)).
What is the mortgage fraud scam called when a broker invents borrowers and properties? A. Equity skimming B. Air loan C. Silent second D. Property flipping
B
If a consumer makes an inquiry to a company, the company can call for: A. 6 weeks B. 3 months C. 6 months D. 18 months
B
Escrow impounds are collected by the: A. Lender B. Attorney C. Police D. Seller
A
Mortgage companies must submit a residential loan origination activity report to the NMLSR every: A. Month B. Three months C. Six months D. Year
B
When title is transferred and the buyer assumes no liability for the note, this type of transference is known as: A. Free and clear B. Subject to the mortgage C. Assumption D. Novation
B
Which is NOT a component of a valid contract? A. Agreement B. Consideration C. Two witnesses D. Competent parties
C
What type of real estate co-ownership is only for married couples? A. Tenants in common B. Joint tenancy C. Tenancy by the entirety D. Spousal tenancy
C
Which parties sign the deed? A.Grantor, grantee and two witnesses B. Grantor and two witnesses C. Grantee and two witnesses D. Grantee only
B
Which of the following can have an unlimited variance between the GFE and HUD-1? A. Hazard insurance B. Recording fees C. Appraisal D. Credit report fee
A
Under the SAFE Act, a state has all of the following authorities EXCEPT
Mark one answer:
A. to deny, suspend, or revoke licenses.
B. to issue cease and desist orders.
C. to waive the requirement for fingerprints for an initial license application.
D. to write rules and regulations.
C
What is the term used when a lender allows a tenant's improvements to be applied toward down payment funds when the tenant purchases the home? A. Home improvement funds B. Restoration funds C. Sweat equity D. Good faith money
C
Who enforces RESPA violations? A. FTC B. CFPB C. FHA D. FCC
B
Which of the following is NOT an escrow impound? A Title insurance B. Property insurance C. Flood insurance D. Hazard insurance
A
A legally binding letter from the lender to the mortgagor stating the terms of the loan is: A. A commitment letter B. A letter of intent C. A discover notice D. A conditional letter
A
What is the fine for violating the Federal Do Not Call rules? A. $5,000 B. $11,000 C. $42,530 D. $60,000
C
Commercial telemarketers must search the Do-Not-Call registry: Mark one answer: A. Every 7 days B. Every 31 days C. Every 180 days D. Once a year
B
What is the shortest time in which a mortgage purchase loan can close? Mark one answer: A. 3 business days B. 7 business days C 14 days D. 30 days
B
Net worth is defined as: A. Cash plus real property B. Cash plus stocks and bonds C. Assets minus liabilities D. Liquid assets plus real property
C
Tenancy in Common does NOT have: A. Equal or unequal ownership B. Buy at same or different times C. Multiple owners D. Right of survivorship
D
A loan originator who accepts an upfront fee for negotiating a loan modification is violating which law? Mark one answer: A. RESPA B. TILA C. HMDA D. MARS
D
Bankruptcies can be kept on the credit report for a maximum of: Mark one answer: A. 3 years B. 5 years C. 7 years D. 10 years
D
Which of the following is not considered an acceptable source for a liquid financial reserve?
a. Checking or savings accounts
b. Investments in stocks.
c. Cash proceeds from a cash-out refinance transaction
d. The cash value of a vested life insurance policy.
C
PITI payments do NOT include which of the following: A. Principal B. Funding fee C. Hazard insurance D. Interest
B
A lock-in agreement does NOT include: A. Interest rate B. Expiration date C. Lock-in fee D. APR
D
Who does Fannie Mae hold responsible for the quality of an appraisal? A. Appraiser B. Borrower C. Mortgage broker D. Lender
D
What type of funding occurs when a lender obtains funds from a line of credit at a commercial bank? A. Credit lending B. Table funding C. Warehouse funding D. Temporary funding
C
The appraisal approach that best applies to vacant land is: A. Sales comparison approach B. Cost approach C. Residential approach D. Income capitalization approach
A
sales comparison approach
Vacant land can only be appraised using the sales comparison approach, since vacant land is not constructed nor does it earn an income. The determination of land value is necessary in both the cost approach and the sales approach to estimate depreciation, since land is not depreciable.
Which federal law requires that the Good Faith Estimate be provided to the borrower within three business days of the time a loan application is taken? Mark one answer: A. RESPA B. TILA C. HMDA D. ECOA
A
How many months must be left on an automobile lease to include it as a debt? A. 2 months B. 5 months C. 10 months D. It is always included
D
Which is NOT a possible indication of a short sale fraud?
A. Buyer is a business partner of the seller
B. Seller has a poor credit history
C. Seller has an excellent credit history
D. The property appraises significantly below neighboring properties
Answer: B
Short sale- fraudster gets straw buyer to purchase home and default on payments. Fraudster thenoffers to buy home from lender prior to foreclosure sale for significantly less than what is owed.
A mortgager's title insurance policy is: A. Transferable B Required C. Based on purchase price D. Never used
C
Which document is NOT recorded? A. Note B. Satisfaction of Mortgage C. Mortgage D. Deed
A
What federal law specifies how long information on a chapter 13 bankruptcy remains on a credit report?
a. TILA
b. FACTA
c. FCRA
d. ECOA
C
Which of the following is a common index used in ARMs: A. CD rate B. The London Inter-Bank Offered Rate C. The Chase Fluctuating Index D. The New York Times Index
B
What clause in a mortgage prevents the lender from recovering additional assets from the mortgagor id there is a shortfall in the foreclosure proceeds? A. Defeasance B. Escalation C. Acceleration D. Exculpatory
D
2-PITI is an acronym for:
A. Property, insurance, taxes, and interest
B. Property, interest, taxes, and insurance
C. Principal, insurance, taxes, and interest
D. Principal, interest, taxes, and insurance
D
The appraisal approach that best applies to a school is: Mark one answer: A. Sales comparison approach B. Cost approach C. Residential approach D. Income capitalization approach
A
Which of the following is NOT a mortgage fraud indicator? A. Inflated appraisal B. Higher than normal commissions C. High credit score D. Request to sign blank forms
C
If three credit scores are obtained for a single borrower the representative score that is usually used is:
A The higher score
B. The lower score
C. The middle score
D. Whatever is the policy of the Mortgage Broker business
C
What type of valuation takes into account annual rent as well as other generated income? A. Sales comparison B. Cost C. GRM D. GIM
D
A gross income multiplier is a rough measure of the value of an investment property. GIM is calculated by dividing the property’s sale price by its gross annual rental income.
Gross Income Multiplier (GIM) = Market Value / Annual Gross Income
Which of the following is incorrect regarding an adjustable-rate mortgage?
A. The index is fixed
B. The margin is fixed
C There are rate caps on both the adjustment period and life of the loan
D LIBOR is a typical index used
A
Who handles complaints regarding mortgage loan rejections? Mark one answer: A FCC B. FHA C. VA D. CFPB
D
A lender may choose NOT to take legal action upon default and this is known as: A. Forbearance B. Exculpation C. Fortitude D. Deficiency
A
The first page of an advertiser's fax must include: A. Company's mailing address B. Company's email address C. Company's phone number D. Opt-out instructions
D
Which of the following documents itemizes all settlement costs including lender charges? A. Agreement of sale B. HUD-1/Closing Disclosure C Form 1003 D. Forbearance agreement
B
A Point of Beginning is used in what type of survey? A. Government land survey B. Plat map C. Metes and bounds D. Circle grid
C
If there is no minimum monthly credit card payment, what percent of the balance is used in the calculation of monthly debt? A. 1% B. 3% C. 5% D. 10%
C
When does the borrower pay the first year of the hazard insurance premium?
A. Each month for 12 months
B. Before or at closing
C. 6 months premium paid at closing; 6 months premium due 30 days after closing
D. Every 2 months for a total of 6 payments during the first year after closing
B
Many financial experts believe that the repeal of the of 1933 led directly to the financial crisis of 2007-2008 by:
A. making credit checks on mortgage applicants optional.
removing barriers to imprudent
B.speculation on the part of financial firms.
C. allowing mortgagelenders to loan money to undocumented immigrants.
D. removing the requirement that home buyers put at least 10% down.
B
Which of the following is NOT an involuntary lien? A. Judgement lien B. Mortgage lien C. Mechanic's lien D. IRS tax lien
B
What minimum percentage of ownership qualifies an individual as self-employed? A. 5% B. 10% C. 25% D. 50%
C
When a consumer is pre-approved for a line of credit and can use this line freely, making repeat transactions, and can pay it off at any time without closing the line, this is an example of: A. Reverse mortgage B. Revolving debt C. Mortgage D. Subordinate lien
B
The GFE/Loan Estimate must be mailed or given to the borrower within how many days after receiving the signed application? A 3 business days B. 7 business days C. 10 business days D. 30 business days
A
How many days after settlement does the lender have to send the Satisfaction of Mortgage letter? A. 10 days B. 15 days C. 30 days D. 60 days
D
A mortgage note that does NOT limit recovery solely from the property is called a: A. Note endorsed with recourse B. Hybrid loan C. Multi-level loan D. Non-recourse note
A
According to the Truth-in-Lending Act (TILA), the term “refinance” applies to:
A.A change in payment schedule
B. A reduction in annual percentage rate
C. The renewal of a single payment obligation with no change in the original terms
D. The satisfaction of an existing obligation and its replacement by a new obligation
D
Which of the following fraud schemes involves real estate professionals lying to lenders about the value of a foreclosed property? A. house flipping B. house flopping C. house stalling D. house terracing
B
What law was passed in 2010 in response to the financial meltdown and recession?
A. Truth-in-Lending Act
B. Gramm-Leach-Bliley
C. Dodd-Frank Wall Street Reform and Consumer Act
D. Home Mortgage Disclosures Act
C
A discount point is BEST described as a charge the borrower pays to:
A. A lender to decrease the interest rate on the mortgage loan
B. A mortgage broker at the time of application to obtain a favorable rate
C. The seller as part of the closing costs of a loan
D. A lender to ensure against foreclosure
A
Credit reports are good for how many days after they are pulled for qualifying purposes? Mark one answer: A. 60 B. 90 C. 120 D. 180
C
A discount point costs: A. $100 B. $1,000 C. 1 percent of loan amount D. 10 percent of loan amount
C
Commission, bonus, or dividend income is usually averaged over: A. 1 year B. 2 years C. 3 years D. 4 years
Answer B
Commission, Overtime, Bonus, Part-time, Interest and Dividend incomemust be averaged over 2 years.
Which regulation encourages financial institutions to help meet the credit needs of their communities, including low- and moderate-income neighborhoods, consistent with safe and sound lending practices? A. CRA B. HOEPA C. RESPA D. TILA
A
An outstanding claim on a property that limits the ability to sell the property is a: A. Title defect B. Subordination C. Penalty D. Fault fee
A
Which is NOT essential for a valid contract: A. $2,000 in reserves B. Competent parties C. Consideration D. Mutual agreement
A
Alimony payments must continue to be received for how long after the application date if they are to be included as income? A. 10 months B. 2 years C. 3 years D 4 years
C
Which of the following is NOT part of the primary mortgage market? A. Commercial bank B. Seller financier C. Insurance company D. Credit union
C
Which law requires loan originators to shred credit reports? A. Homeowner's Protection Act B. Fact Act C. Gramm-Leach-Bliley D. No such law
D
Which form is used to summarize the information in the loan package? A. Fannie Mae 1006 B. Fannie Mae 1005 C. Fannie Mae 1008 D. Fannie Mae 1003
C
The enforcement of a lien is known as a: A. Closing B. Foreclosure C. Warranty inspection D. Police action
B
A term mortgage is NOT: A. Non-amortizing B. Interest only C. Satisfied by a final lump sum payment D. Fully amortized
D
How long do consumers have to file a lawsuit over alleged violations of Section 6 of RESPA? A. 6 months B. 1 Year C. 3 Years D. 7 Years
C
What is the enforcement of a lien? A. Arrest B. Bankruptcy C. Foreclosure D. Mediation
C
The Truth-in-Lending Disclosure does NOT include: A. APR B. Finance charge C. Total amount of payments D. Borrower's credit score
D
document conveying title from one party to another and guaranteeing that the title is good is known as a: A. Good faith B. Warranty Deed C. Usury limit D. Red Flags documentation
B
Which law defines the right of rescission? A. Truth-in-Lending B. Real Estate Settlement Procedures Act C. Equal Credit Opportunity Act D. Patriot Act
A
The actual amount of money a home buyer borrows is called: A. the mortgage. B. the principal. C. the equity. D. the PITI.
B
^^^ Which of the following is an acceptable source of funds at closing? A. Sweat equity B Cash on hand C. Personal check D. Wire transfer
D
Surveys are NOT certified to: A. Lenders B. Title insurers C. Buyers D. Real estate brokers
D
Which of the following does NOT appear in a lock-in-agreement? A. Expiration rate B. APR C. Lock-in fee D Interest rate
B
A clause in some mortgages which allows subsequent mortgages on the same property to have a higher claim than the current mortgage is a: A. Subordination clause B. Penalty clause C. Privilege clause D. Inferior clause
A
Credit reports on new construction are good for how many days? Mark one answer: A. 90 days B. 120 days C. 180 days D. 225 days
B
Fannie Mae requires how many years of credit and public records review? A. 1 year B. 3 yearsb C. 5 years D. 7 years
D
When there is a new note and the original borrower is released from all liability, this is known as transferring title by: A. Creative financing B. Assumption C. Novation D. Subject to the mortgage
C
Which law requires the interviewer to complete the Government Monitoring section on the 1003?
A. Homeowner’s Protection Act
B. The Fair and Accurate Credit Transaction Act
C. Truth-in-Lending
D. The Equal Credit Opportunity Act
D
Lenders must maintain an escrow account for higher-priced mortgages for a minimum: A. 1 year B. 3 years C. 5 years D. No escrow account is required
C
A real estate broker may pay a referral fee to: A. A closing agent B. A past customer C. A mortgage broker D. Another real estate brokerage firm
D
Which IRS form does a lender use to verify an applicant's income? A. 2071 B. 321-ML C. 911-R D. 4506-T
D
Payment for alimony must continue for how long after the application date in order to be included as a debt? A. 1 month B. 10 months C. 2 years D. 3 years
B
What gives someone other than the owner the right to be on the property for a specific purpose? A. Mechanic's lien B. Easement C. Encumbrance D. Declaration of intention
B
The principle of value that focuses on the most profitable, legal use to which a property can be put is: A. Principle of satisfaction B. Principle of substitution C. Principle of highest and best use D. Principle of conformity
C
A neighbor's fence that crosses over on to another's property is an example of an: A. Encroachment B. Encumbrance C. Exculpation D. Egress
A
How many years must loan originator applicants wait after a felony fraud conviction, in order to qualify for a license? A. One year B. Two years C. Five years D. They aren't eligible for licensing
D
The DTI standard for an FHA loan is _____, and the standard for a VA loan is ____.
a. 26%/38%
b. 31%/43%
c. 41%/43%
d. 43%/41%
D
Borrowers with a high-cost loan can rescind the loan within how many business days? A. 3 B. 7 C. 15 D. There is no rescission period
A
Which of the following is NOT usually required by a loan applicant?
A. Photo ID
B. Personal references
C. 2 months of bank or brokerage statementsc
D. 30 days previous pay stub
B
