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Kim NMLS > Chapter 2 SAFE COPY > Flashcards

Chapter 2 SAFE COPY Flashcards

1
Q

Which of the following must be a licensed loan originator?
A. Commercial loan originator
B. Independent contractor who is an underwriter
C. Supervised loan processor employee
D. An individual who negotiates the terms of his own mortgage loan

A

B

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2
Q

Which of the following do NOT need to be licensed?
A. Independent contractors who are loan originators
B. Independent contractors who are underwriters
C. Independent contractors who are loan processors
D. Federally chartered bank employees

A

D

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3
Q

Shawna is a mortgage loan originator who has let her state license lapse for the last 6 years. Which of the following scenarios most likely will happen?

a) Shawna will need to retake the licensing test
b) The state authority will serve a cease and desist
c) Shawna will need an additional 3 hours of training
d) The state authority will impose a fee. 
Shawna will need to retake the licensing exam.

A

A

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4
Q

All of the following MLOs are required to be state-licensed except:

A. An MLO working under the authority of the Bureau of Real Estate
B. An MLO working as a Consumer Finance Lender (CFL)
C. An MLO working for a federally insured depository institution
D. An MLO working as a mortgage banker through the DBO

A

The correct answer is C. This would include banks, credit unions and subsidiaries owned and controlled by a depository institution and regulated by a federal banking agency.

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5
Q

Which of the following plays a major role in recommending the breakup of companies such as large banks that may pose a threat to the financial
stability of the United States?
A. FFEIC
B. Federal Deposit Insurance Company (FDIC)
C. Office of FinancialRegulation
D. Financial Stability Oversight Council

A

D

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6
Q

***The State’s authority to examine, investigate and conduct
enforcement actions to carry out the intended purposes of the SAFE Act, including the authority to subpoena
A. Once a year
B. Every three months
C. Every six months
D. As necessary

A

D

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7
Q 
***An MLO just moved from another state, how many days do they have temporary authority to work in Texas?
A. 90 Days
B. 120 Days
C. One year
D. Two Years
A

Temporary Authority to submit loan - 120 days from the date of submission of an incomplete application.

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8
Q

**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

A

C

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9
Q

Which of the following is true about the Loan Applicant Register (LAR)?
A. LARS must be submitted each year
B. Individual institutions must never share LARS information
C. Individual institutions must make their LARs available upon written consent
D. Individual institutions must make their LARsavailable to the public upon request.

A

A

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10
Q 
Where is the LAR summited to?
a. FDIC
B. CFPB
C. FFEIC
D. HMDA
A

Answer: FFEIC
The LAR is the Lending Institution and submit their LARs to the
Federal Financial Institution Examination Council (FFIEC) every year.

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11
Q 
Which of the following created LARS?
A. RESPA
B. HMDA
C. FFEIC
D. FDIC
A

B

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12
Q

***A real estate refers a Someone tells you it’s a loan for him. At the last minute, the borrower disclosed that he’s living with his mom and the loan is really for to be used as a rental. What should the MLO do n this case?

A

NA

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13
Q

**If an RMLO uses an outside processor, which of the following should be done?
A. Make sure there is a physical office
B. Check with CFPB
C. Make sure at least one person is present at the office
D. Make sure they are licensed or qualify as W2

A

D

If a company’s loan processors qualify as W-2 “employees” rather than 1009 “independent contractors” then they are exempt for obtaining a MLO license in the majority of the states

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14
Q

*** Lowest Rate in town not trigger term

A

NA

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15
Q 
************In form FMNA 1003 or URLA what information is not provided? 
A. Credit Score
B. Credit balance
C. Credit Card Monthly payment 
D. Credit card months left
A

Credit score is not included

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16
Q 
Mortgage companies must submit a residential loan origination activityreport to the NMLSR every:
A.  Month
B.  Three months
C.  Six months
D.  Year
A

Answer B Quarter

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17
Q 
What law addresses loan originators’ compensation issues?
A.  Truth-in-Lending Act
B.  Loan Origination Rule
C.  Equal Credit Opportunity Act
D.  Mortgage Compensation Act
A

B

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18
Q 
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

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19
Q 
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

A

20
Q 
A lender that works with licensed loan originators is a:
A.  Participating lender
B.  Private lender
C.  Wholesale lender
D.  Retail lender
A

C

21
Q

The obligation for mortgage brokers to serve as the agent or the fiduciary of borrowers is:

a. Imposed by the S.A.F.E. Mortgage Licensing Act
b. Imposed by state licensing laws in every state
c. Imposed by the Dodd-Frank Act
d. Imposed by state licensing laws in some states

A

D

22
Q

In which of the following cases would it be permissible for a mortgage professional to withhold compensation to an appraiser?

a. The appraiser has consistently provided valuations that were not as high as the mortgage professional hoped they would be
b. The appraiser has failed to change information in a valuation at the request of the mortgage professional, because he or she says it would make the report inaccurate
c. The appraiser has provided valuations that used inappropriate comparables, included errors, and were generally inaccurate
d. The appraiser has provided extensive paperwork to substantiate valuation results

A

C

23
Q 
An MLO from out of state just moved to another state. How many days is he or she allowed to practice under temporary authority? 
A. 30 
B. 90
C. 120 
D. One Year
A

C

24
Q 
How long must loan officer be loan originators moving from depository institution to a non-depository institution be registered in order to qualify for temporary authority? 
A. 90 days prior to getting license 
B. 120 days prior to getting license 
C. Six months prior to getting license 
D. One year prior to get license
A

D

25
Q 
A break in service for an MLO shall not exceed 
A. fourteen calendar days. 
B. Thirty calendar days. 
C. Forty-five calendar days. 
D. Sixty fourteen calendar days.
A

Answer A

A break in service for an MLO shall not exceed fourteen calendar days.

26
Q

As required by the state loan originator supervisory authority be covered by the following except

a. Net worth.
b. Surety Bond
c. Pays into a State Fund.
d. Government Bond

A

Answer D

As required by the state loan originator supervisory authority be covered by the following Net worth, Surety Bond And Pays into a State Fund.

27
Q

Mortgage Call Reports must be submitted to the NMLS:

(a) Monthly.
(b) Quarterly.
(c) Semi-annually.
(d) Annually.

A

B

28
Q

Name the national association of executives and employees of the various states who are charged with the responsibility for administration and regulation of residential mortgage lending,servicing, and brokering.

(a) National Conference of State Mortgage Supervisors.
(b) United States Department of Mortgage Administration.
(c) National Association Residential Lending and Servicing Regulators.
(d) American Association of Residential Mortgage Regulators.

A

Answer D

29
Q

If a mortgage loan originator (MLO) consummates a loan while his license is suspended or revoked, the loan is:
A. closed, nothing needs to be done.
B. fraudulent and will need to be immediately repaid.
C. valid but the MLO violated the law.
D. void and will need to be rewritten.

A

C. valid but the MLO violated the law.

30
Q

The SAFE Act is designed to do all of the following except:
A. Reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators.
B Establish and maintain a nationwide mortgage licensing system and registry
C. Reduce fraud by creating an enforcement agency that prosecutes unethical activity
D. Provide consumers with easily accessible information, offered at no charge, through electronic media, including the Internet

A

C. Reduce fraud by creating an enforcement agency that prosecutes unethical activity

31
Q

The Nationwide Multistate Licensing System and Registry accomplishes all of the following except…?
A Provides uniform license applications and reporting requirements for State-licensed loan originators.
B. Provides a comprehensive licensing and supervisory database as well as provides increased accountability and tracking of loan originators.
C. Enhances consumer protections and supports anti-fraud measures including the collection and disbursement of consumer complaints on behalf of State and Federal mortgage regulators.
D. Provides tracking of the number of loans each mortgage loan originator writes, including loan amounts and types.

A

D. Provides tracking of the number of loans each mortgage loan originator writes, including loan amounts and types.

32
Q

Which of the following are powers/duties of the Regulatory Authority?
A. Arrest and imprison
B. Conduct examinations of licensee’s books and records
C. Participate in Background Investigations done by the FBI
D. Prevent a licensee from taking Continuing Education classes

A

Conduct examinations of licensee’s books and records

33
Q

The penalties issued by the Regulatory Authority are ____ penalties on mortgage loan originators.

  • Civil
  • Criminal
  • Contractual
  • Continual
A

Civil

34
Q

The Nationwide Multistate Licensing System and Registry is developed and maintained by which of the following:
A. The Conference of State Bank Supervisors and the NMLS
B. The American Association of Residential Mortgage Regulators and the NMLS
C. The Conference of State Bank Supervisors and The American Association of Residential Mortgage Regulators
D. The NMLSR

A

C. The Conference of State Bank Supervisors and The American Association of Residential Mortgage Regulators

35
Q

Who is granted broad administrative authority to administer, interpret and enforce this Act (S.A.F.E.), and promulgate rules or regulations implementing this Act, in order to carry out the intentions of the Legislature?

  • The Commissioner
  • The Secretary of State
  • The Lieutenant Governor
  • The State Financial Supervisorial Authority
A

The Commissioner

36
Q

Which of the following would NOT be included in a list of Federal Banking Agencies?

  • The Board of Governors of the Federal Reserve System -The National Credit Union Administration
  • The Comptroller of the Currency
  • The Director of the Office of Credit Compliance
A

The Director of the Office of Credit Compliance

37
Q

Which of the following are NOT powers/duties of the Regulatory Authority?

  • Conduct Investigations
  • Issue Warrants
  • Conduct examinations of licensee’s books and records
  • Issue Fees and Penalties
A

Issue Warrants

38
Q

What entity works with the NMLSR to establish a backup licensing system, licensing and registration requirements, unique identifiers, and state licensing law requirements?

A. State Secretary
B. Secretary of Housing and Urban Development
C. Secretary of State
D. Mortgage Licensing State Secretary
Secretary of Housing and Urban Development

A

B. Secretary of Housing and Urban Development

39
Q 
The Regulatory Authority shall NOT have free and reasonable access to licensees':
A. books. 
B. records.
C. offices. 
D. tax returns.
A

tax returns

40
Q

The Secretary is required to submit periodic reports to Congress of the effectiveness of the S.A.F.E. Mortgage Licensing Act. Which of the following is NOT a reason for why the Secretary is required to do so?

  • To strengthen consumer protections
  • To keep interest rates low to encourage home ownership
  • To streamline communication between all stakeholders involved in residential mortgage loan origination and processing
  • To establish performance based bonding requirements for mortgage originators or institutions.
A

To keep interest rates low to encourage home ownership

41
Q

Who determines continuing education requirements and dates for licensing renewal?
A. The Governor of the state
B. The Nationwide Mortgage Licensing System
C. The state Regulatory Authority as established under the SAFE Act
D. The National Mortgage Association of Education

A

B NMLS

42
Q

In order to carry out the purposes of examination and investigation authority, all of the following may be done EXCEPT:
A. retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations.
B. use, hire, contract or employ public or privately available analytical systems, methods or software to examine or investigate the licensee, individual or person.
C access personal and confidential information and distribute said information to the public in the event that doing so would be in the best interest of the general public.
D. accept and rely on examination or investigation reports made by other government officials, within or without the state.

A

C. access personal and confidential information and distribute said information to the public in the event that doing so would be in the best interest of the general public.

43
Q

All of the following are considered Federal Banking Agencies except:
A. The Board of Governors of the Federal Reserve System, The National Credit Union Administration and The Federal Deposit Insurance Corporation.
B. Mortgage Bankers.
C. The Director of the Office of Thrift Supervision.
D. The Comptroller of the Currency.

A

B. Mortgage Bankers.

44
Q

Which of the following is true regarding the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (The SAFE Act):
​
A. It is effective as of July 31, 2009.
B. It is a key component of the Housing and Economic Recovery Act of 2008.
C. It requires all states to implement a SAFE-compliant mortgage loan originator (MLO) licensing process that meets certain minimum standards through the Nationwide Mortgage Licensing System and Registry (NMLS).
D. All of the above.

A

The correct answer is D.

45
Q

All of the following are SAFE Act objectives, except:
​
A. Provide uniform license applications for state licensed MLOs.
B. Provide increased accountability and tracking of MLOs.
C. Provide comprehensive training and examination requirements related to conforming mortgage products.
D. Facilitate the collection and disbursement of consumer complaints.

A

The correct answer is C. The statement is true for nonconforming mortgage products, but not conforming products.

46
Q

Which of the following is a legitimate objective of the SAFE Act:
​
A. Make mortgage fraud a felony.
B. Eliminate the subprime mortgage market.
C. Provide a comprehensive licensing database.
D. Increase regulations to ensure that all MLOs will act in the best interests of the consumer.

A

The correct answer is C. Yes, of this list, only C represents a legitimate objective of the SAFE Act.

47
Q 
Which of the following was one purpose of the HERA?
A. Pursuing and prosecuting terrorists 
B. Establishing the NMLSR 
C. Improving the stock market 
D. Giving Wall Street greater autonomy 

A

B

Kim NMLS (13 decks)

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