Final 125- Incorrect answers Flashcards
A borrower is looking to obtain conventional financing for a refinance, the appraisal comes in lower than expected and the borrower no longer qualifies for conventional financing. They want to go ahead and proceed with FHA financing; the lender would have to what:
a. Redisclose because of a changed circumstance
b. Redisclose because of a change of program
c. Withdraw the initial application and start over
d. Suspend the initial application for 30 days
a.Redisclose because of a changed circumstance
A HECM is what type of loan:
a. Reverse mortgage
b. Bridge loan
c. Graduated payment mortgage
d. Line of credit
a.Reverse mortgage
A lender does not allow their borrowers to shop for their credit report fee, per TRID, what is the tolerance on that fee?
10% cumulative
10% individual
Zero tolerance
No tolerance
Zero tolerance
A lender has a policy that only individuals between the age of 25-45 can receive home loans of over $200,000. What would this be considered:
a. Disparate Treatment
b. Disparate Impact
c. Discrimination
d. Blockbusting
a.Disparate Treatment
A lender has a policy that they never lend less than $70,000 because they can’t make any money off of loans lower than $70,000. What would this be considered:
a. Disparate Treatment
b. Disparate Impact
c. Discrimination
d. Blockbusting
b.Disparate Impact
A lender may keep the:
a. credit report fee and yield spread premium.
b. discount points and appraisal fee.
c. yield spread premium and discount points.
d. Origination Fee
d.Origination Fee
A loan officer creates a marketing plan to make between 2k and 4k per loan. His cousin calls, he agrees to do the 300k loan for .75% commission. This is:
a. legal and unethical but okay because he is family.
b. illegal and ethical.
c. illegal and unethical.
d. legal and ethical because he is within his marketing plan.
d.legal and ethical because he is within his marketing plan.
A mortgage company telemarketer has been accused of inappropriately calling two consumers on the National Do Not Call Registry. What is the maximum fine the company could face for this violation?
a. $15,000
b. $32,000
c. $40,000
d. $86,560
d.$86,560
A Mortgage Servicing Disclosure Statement is required by what law?
a. MDIA
b. RESPA
c. SAFE Act
d. TILA
b.RESPA
According to FACTA, how often is a consumer entitled to a free copy of their credit score?
a. Never
b. Annually
c. Twice a year
d. Once every two years
a.Never Read credit SCORE vs REPORT
According to MDIA, what is the waiting period once initial disclosures are provided to the borrower before the loan can close?
a. 10 business days
b. 7 business days
c. 5 business days
d. 3 business days
b.7 business days
According to the Qualified Mortgage Rule, what is the maximum percentage limit on the total obligation debt to income ratio for a general qualified mortgage?
a. 41%
b. 36%
c. 28%
d. 43%
d.43%
After the crisis of the Great Recession according to Conventional underwriting when can a borrower repurchase again after a short sale?
a. 7 years from the credit report date
b. 5 years from the credit report date
c. 3 years from the credit report date
d. 4 years from the credit report date
d.4 years from the credit report date
After the crisis of the Great Recession according to Conventional underwriting when can a borrower repurchase again after a Chapter 7 bankruptcy?
a. 7 years from the discharge date
b. 5 years from the discharge date
c. 2 years from the discharge date
d. 4 years from the discharge date
d.4 years from the discharge date
After the crisis of the Great Recession according to VA underwriting when can a borrower repurchase again after a Chapter 7 bankruptcy?
a. 7 years from the discharge date
b. 5 years from the discharge date
c. 2 years from the discharge date
d. 3 years from the discharge date
c.2 years from the discharge date
All of the following are true about the FTC Red Flags Rule except:
a. Protect sensitive personal data
b. Require the implementations of a written plan to detect and prevent industry theft
c. The penalty for noncompliance is $3,500
d. It requires lenders to create specific disposal policies to ensure a borrower’s information is properly disposed of
d.It requires lenders to create specific disposal policies to ensure a borrower’s information is properly disposed of
All of the following would be considered a red flag per the Red Flags Rule except:
Changes in patterns of deposits that are suspicious
Alerts from a credit card company of potential fraud
Stolen files or computers
A sudden increase in income
A sudden increase in income
An affiliated business arrangement must be given if there is what percent of an ownership interest?
a. 1% ownership
b. over 10% ownership
c. a 25% ownership
d. If more than 5% is owned the affiliated company cannot be used
a.1% ownership
An Alt-A or Alt Doc loan would be considered a type of:
a. Adjustable rate mortgage
b. Subprime mortgage
c. Jumbo loan mortgage
d. Nontraditional mortgage
b.Subprime mortgage
An IRRRL is what type of loan?
a. A VA streamline loan
b. An FHA streamline loan
c. A USDA purchase loan
d. A VA cash-out loan
a.A VA streamline loan
An MLO is working on disclosing a borrower’s Loan Estimate, which of the following is true:
a. The MLO can collect an application fee before disclosing that LE
b. The MLO can only collect a credit report fee before disclosing that LE
c. The MLO can collect an application fee and appraisal fee before disclosing the LE
d. The MLO cannot collect any fee before disclosing the LE
b.The MLO can only collect a credit report fee before disclosing that LE
An MLO is working with a client, she is a single mother, she has four children and works two jobs. She makes enough income, but it looks like she is pregnant with another child. The MLO asks this borrower about it and passes the information on to the underwriter, the underwriter denies the loan application. This is a potential violation of:
ECOA
HMDA
TILA
RESPA
ECOA
Andrea is receiving two payments of child support for her two children, they are 14 and 12. For that income to be used as income, the child support must continue for:
a. Five years
b. Three years
c. Seven years
d. One year
b.Three years
Andrew is a veteran and he’s looking to obtain his very first VA loan to purchase his very first house. He knows that he will have to pay a funding fee, he is planning on putting down 10%, what would his funding fee be?
- 6%
- 3%
- 4%
- 65%
1.4%
As part of a mortgage loan originator applicants pre-licensing education, how many hours must be focused on federal law?
a. 2 hours
b. 3 hours
c. 4 hours
d. 10 hours
b.3 hours
As the lender looks over the borrower’s loan application and is deciding whether or not to make the loan, the lender may consider the:
a. Economic health of the borrower.
b. Psychological state of the borrower.
c. Physical state of the borrower.
d. The borrower’s race.
a.Economic health of the borrower.
Borrower(s) may decide to disclose income from child support or alimony. What federal law states that a lender cannot refuse to consider alimony or child support as income?
a. Real Estate Settlement Procedures Act
b. Equal Credit Opportunity Act
c. Fair and Accurate Credit Transactions Act
d. Truth in Lending Act
b.Equal Credit Opportunity Act
Daniel is looking to qualify his borrower for a conventional loan. He is attempting to determine the borrower’s back-end debt-to-income ratio. What is the maximum back-end DTI ratio that Daniel can use on a conventional loan?
a. 41%
b. 36%
c. 28%
d. 32%
b.36% The conventional loan qualifying ratios are 28/36%.
Discount points would only be used if the interest rate offered to the borrower were which of the following?
a. Above par
b. The prime rate
c. Below par
d. Par or anything above par
d.Par or anything above par
ECOA requires the appraisal be given to borrowers:
a. 1 day before settlement.
b. 3 days before settlement.
c. 30 days after settlement.
d. Immediately after settlement.
b.3 days before settlement.
Hannah is choosing to escrow her taxes and insurance on her new home. She paid some towards her escrow account at closing. She is wondering when she will get information from her servicer on her escrow account. RESPA requires that servicers provide an initial escrow account statement within:
a. 45 calendar days of closing
b. 30 calendar days of closing
c. 60 calendar days of closing
d. 90 calendar days of closing
a.45 calendar days of closing
HMDA is implemented as what Regulation?
B
C
X
Z
C
HOEPA is an addendum of:
a. Regulation B.
b. Regulation C.
c. Regulation X.
d. Regulation Z.
d.Regulation Z.
How can one calculate monthly income for an applicant who is paid an hourly wage?
a. Weekly income x 52/12
b. Weekly income x 12/52
c. Hourly wage x 40 x 52/12
d. Weekly income x 4
c.Hourly wage x 40 x 52/12
How does rate charged for PMI for a 90% loan compare to that for a 95% loan?
a. It depends solely on the loan amount
b. It is lower
c. It is higher
d. It is the same
b.It is lower
How many days do you have to correct a non-numeric clerical error on the Closing Disclosure?
10 day after consummation
20 days after consummation
30 days after consummation
60 days after consummation
60 days after consummation
How many days prior to consummation or closing is the final Loan Estimate required to be provided to the borrower?
a. 21 days before consummation or closing
b. 10 days before consummation or closing
c. 7 days consummation or closing
d. 4 days consummation or closing
d.4 days consummation or closing
If an underwriter is looking at a borrower’s credit report, how far back are they looking at credit inquiries?
12 months
90 days
6 months
24 months
90 days
If the APR on a fixed rate loan increases from the initially disclosed rate by more than what, an additional waiting period is triggered before the loan can close?
a. .125 percent
b. .250 percent
c. .375 percent
d. .500 percent
a. .125 percent
If two people are married, how do they likely hold title?
a. Tenancy by the Entirety
b. Joint Tenancy
c. Tenancy in Common
d. Ownership in severalty
a.Tenancy by the Entirety
In qualifying the income of a sole proprietor borrower, the originator should consider which of the following to be most important?
a. Form 1040 adjusted gross income
b. Schedule C net income
c. Expenses reported on Form 2106
d. Schedule C net income plus non-cash expenses and depreciation
d.Schedule C net income plus non-cash expenses and depreciation
In which situation would it be most likely that a lender will reject a property?
If the effective age is unduly old
If the condition is marked “fair” by the appraiser
If the market value exceeds the costs to rebuild
If the net adjustments on the comparable were 5%
If the condition is marked “fair” by the appraiser
Jamie is looking to refinance his property. He currently owes $55,000 on a first mortgage and pays a 4% interest rate on it. He also owes $5,000 on a HELOC paying 6% interest on it. He wants to obtain some cash-out and is expecting to get at least $30,000. The appraisal came in at $200,000. He also has a tax lien of $1,200 on the property and $4,000 in credit card debt he’d also like to eliminate. He qualifies for an 80% LTV and the closing costs are going to be $3,000 on the new loan. How much cash will Jamie have available?
a. $93,000
b. $97,000
c. $91,800
d. $95,800
c.$91,800 add credit card debt
Javier is looking to purchase a home, but he does not make enough money to obtain the loan that he wants. Javier, instead of looking for a less expensive property, changes his W-2 to reflect that he is making an additional $1,000 a month. What type of fraud is this?
a. Fraud for property
b. Fraud for profit
c. Fraud for criminal enterprise
d. Negligent fraud
a.Fraud for property
Jonathan has an ARM; his index is the COFI and his margin is 1.25%. How could Jonathan determine his next adjustment??
By looking at the Index only
By adding the index plus the margin
By looking at this interest rate caps only
By reviewing the Federal Reserve Bond numbers
By adding the index plus the margin
Josh, an MLO, is working with Javier. Josh knows that HOEPA requires a specific disclosure on all federally related transactions, what is not true about that disclosure?
a. The disclosure is a list of housing counselors
b. The disclosure must be sent within 3 business days of application
c. The disclosure must be sent 3 days prior to consummation
d. The disclosure must include 10 housing counselors
c.The disclosure must be sent 3 days prior to consummation
Lenders submit Loan/Application Registers in order to comply with what law?
a. CRA
b. FACT Act
c. FCRA
d. HMDA
d.HMDA
Long term debts are those that have payments remaining for more than:
10 months.
6 months.
12 months.
28 months
12 months.
Luke is a mortgage loan originator, and he is working with a new borrower. Luke needs to determine how much the home is worth versus the loan amount that the new borrower is requesting. What is Luke attempting to determine?
a. The borrower’s debt-to-income ratio
b. The borrower’s loan amount
c. The borrower’s appraised value
d. The borrower’s loan to value ratio
d.The borrower’s loan to value ratio
Omar is closing his purchase transaction, he was not provided the right to rescind information, how long does Omar now have to rescind his loan?
a. He does not have a right to rescind his loan as this is a purchase transaction
b. Thirty days
c. One year
d. Three years
a.He does not have a right to rescind his loan as this is a purchase transaction
On Form 1003 Section X: Information for Government Monitoring Purposes is used in order to comply with which federal law?
a. Community Reinvestment Act
b. Fair Credit Reporting Act
c. Home Mortgage Disclosure Act
d. Truth in Lending Act
c.Home Mortgage Disclosure Act
On the Loan Estimate, which of the following is true?
You can never round any figures
You can round some figures to the nearest dollar
All figures should be rounded to the nearest whole dollar
Only prepaids can be rounded
You can round some figures to the nearest dollar
One purpose of the Fair and Accurate Credit Transaction Act is to prevent:
a. Predatory lending
b. Discrimination in lending
c. Loss of borrower
d. Identity theft
d.Identity theft
Regulation B is also known as:
a. ECOA
b. HMDA
c. RESPA
d. TILA
a.ECOA
Regulation Z is also known as which of the following?
a. ECOA
b. FHA
c. RESPA
d. TILA
d.TILA
Section 35 of TILA governs what type of loan?
a. High Cost
b. Higher priced
c. Subprime loans
d. Open-ended loans
b.Higher priced
States are encouraged to use what in lieu of social security numbers?
a. Drivers License
b. Unique Identifiers
c. Last 4 of SSN
d. Birth Certificate
b.Unique Identifiers
Surrender of an MLO license does not affect the MLO’s:
a. Ability to originate loans as an employee for a licensed lender.
b. Civil or criminal liability for acts committed prior to the surrender.
c. Ability to process loans as a contract processor.
d. Ability of taking loan applications as an independent contractor.
b.Civil or criminal liability for acts committed prior to the surrender.
The adverse action notice must be in writing and contain the specific reasons for why the action was taken or:
a. Disclose to the applicant that they can request the reasons for the denial within 60 days of receiving the lenders notification
b. Disclose to the applicant that they can request the reasons for the denial within 30 days of receiving the lenders notification
c. Disclose to the applicant that they can request the reasons for the denial within 90 days of receiving the lenders notification
d. Disclose to the applicant that they can request the reasons for the denial within 10 days of receiving the lenders notification
a.Disclose to the applicant that they can request the reasons for the denial within 60 days of receiving the lenders notification
The application for a mortgage loan originator would be denied for all of the following reasons except:
a. The applicant had a mortgage loan originator license revoked
b. The applicant was convicted of a felony 5 years ago
c. The applicant has a foreclosure on their credit report from 4 years ago
d. The applicant has had seriously delinquent accounts in the past 3 years
c.The applicant has a foreclosure on their credit report from 4 years ago
The borrower uses his home’s equity for a mortgage loan for business purposes. The borrower will use $80,000 to buy restaurant equipment. This loan will be:
a. exempt from RESPA because it is a business purpose loan.
b. covered by RESPA, as the collateral is a mortgage on the borrower.
c. covered by RESPA because it is to an individual no matter the purpose of the loan.
d. exempt from RESPA because restaurant equipment loans are not federally related.
b.covered by RESPA, as the collateral is a mortgage on the borrower.
The borrower’s gross monthly income is $5,000. The new mortgage loan will reduce his monthly payment to only $1,000 per month. The borrower will still owe a car payment of $350 and a student loan payment of $250. The borrower also has a cell phone bill of $90 per month. What is the borrower’s new Housing Ratio?
a. 20%
b. 27%
c. 32%
d. 33.80%
a.20%
The consumer can be charged an appraisal review fee:
Only after an appraisal and you know a review is needed
If the appraiser requests a review appraisal be completed
Never
Only if the review fee is disclosed on the Loan Estimate
Only if the review fee is disclosed on the Loan Estimate
The estimate of closing costs on the mortgage loan disclosed on the Loan Estimate are good for:
a. 3 days
b. 7 days
c. 10 days
d. 21 days
c.10 days
The legal link between a person who owns property and the property itself is the:
a. Title
b. Deed
c. Mortgage
d. Promissory Note
a.Title
The length of the rescission period for a refinanced mortgage loan is:
a. three business days including Saturday and excluding Sunday and holidays.
b. three business days including Saturday and Sunday excluding holidays.
c. five business days including Saturday and excluding Sunday and holidays.
d. three business days excluding Sunday and legal public holidays.
d.three business days excluding Sunday and legal public holidays.
The Loan Estimate must be:
a. Received within 3 days of the application
b. Disclosed within 3 days of the application
c. Sent within 3 business days of the application
d. Received within 3 business days of the application
c.Sent within 3 business days of the application
Which law promotes informed shopping by requiring the disclosure of settlement services to the borrower?
a. Reg. C
b. RESPA
c. Reg. B
d. TILA
b.RESPA
The Real Estate Settlement Procedures Act (RESPA, Regulation X) deals specifically with settlement services. A good way to remember its purpose is by thinking about the law’s name, it includes the word settlement.
The Real Estate Settlement Procedures Act does not apply to:
Higher loan amounts of $1 million or more on residential properties.
Loans used to finance the purchase of 25 acres or more.
Refinance transactions.
Purchase loans that are secured by a first mortgage on the property.
Loans used to finance the purchase of 25 acres or more.
The Real Estate Settlement Procedures Act requires all of the following except:
Good Faith Estimate.
Settlement Statement.
Special Information Booklet.
Race, ethnicity, and gender information.
Race, ethnicity, and gender information.
The Truth in Lending Act does which of the following?
a. Requires all loan applications be made in person
b. Prevents advertising FHA financing to the exclusion of Conventional
c. Regulates advertising regarding interest rates
d. Requires a closing cost breakdown on residential loans
c.Regulates advertising regarding interest rates
The underwriter will require verification of employment. Which of the following will NOT serve this purpose?
A notarized affidavit from the borrower
Telephone call to the employer by the loan processor
Paycheck stubs
A written letter or completed form directly from the employer
A notarized affidavit from the borrower
There is a lender working in a large metropolitan area, but currently, they are targeting a low-income neighborhood and charging more for their loans because the individuals in the area are mostly African American. This would be considered:
a. Chunking
b. Churning
c. Reverse Redlining
d. Redlining
c.Reverse Redlining
Through the life of a loan, the servicer is allowed to cushion a borrower’s escrow account. What is true about that cushion?
a. It cannot exceed 1/6 of the estimated total annual payment from the account
b. It cannot exceed 1/12 of the estimated total annual payment from the account
c. RESPA actually does not allow a cushion
d. It can be up to a years’ worth of escrow payments
a.It cannot exceed 1/6 of the estimated total annual payment from the account
Trevor is looking to obtain an ARM loan, his MLO is required to disclose what within 3 days of application?
a. The Home Loan Toolkit
b. The Consumer Handbook on Adjustable Rate Mortgages
cThe Closing Disclosures
d.The Goodbye Letter
b.The Consumer Handbook on Adjustable Rate Mortgages
Under the Red Flags Rule, all of the following would be considered a creditor except:
A health insurance provider
A broker
A utility company
An attorney
An attorney
Under what federal legislation, is a lender required to allow a borrower to opt-out of having their nonpublic personal information disclosed to a third party?
a. Gramm-Leach-Bliley
b. The USA Patriot Act
c. FACTA
d. FCRA
a.Gramm-Leach-Bliley
Under what law does the Ability to Repay Rule fall under?
a. TILA
b. RESPA
c. Dodd-Frank
d. ECOA
a.TILA
Under which federal legislation does the consumer have the right to receive a copy of the appraisal report on a dwelling that is to be used as collateral for a loan?
a. HMDA
b. RESPA
c. TILA
d. ECOA
d.ECOA
What can you tell a borrower about a 7/1 ARM?
a. The interest rate may go up only 1% each year for 7 years.
b. The interest rate is locked for the first year and may only go up 7% over the life of the loan.
c. The interest rate may only go up 7% over the life of the loan starting the 1st year.
d. The interest rate is fixed for the first 7 years then is a variable interest rate.
d.The interest rate is fixed for the first 7 years then is a variable interest rate.
What federal law created the idea of a qualified mortgage?
a. Dodd-Frank
b. TILA
c. RESPA
d. ECOA
a.Dodd-Frank
What is not applicable if the Verification of Deposit does not match up with bank statements?
Call the borrower to explain the differences
Call the bank to verify the numbers aren’t a mistake
Make sure the accounts numbers match
Don’t do anything
Don’t do anything
What is the appraiser least interested in when determining the value of an income property?
a. Location
b. Interest rates
c. Cash flow
d. Projections of expenses and rents
c.Cash flow
What is the definition of a business day for the Loan Estimate disclosure?
Monday through Friday
Monday through Saturday
Any day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions
Monday through Saturday except Sundays and all Federal holidays
Any day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions
What is the legal amount that an ARM can increase in one year?
6%
2%
1%
There is no legal amount
There is no legal amount
What law prohibits discrimination in the sale and rental of a residential property on the basis of race, color, religion, handicap, sex, familial status or national origin?
ECOA
HMDA
FHA
CMA
FHA
What occurs when an QM loan is presumed to comply with ATR requirements?
a. A safe harbor
b. A rebuttable presumption
c. A high-cost home loan
d. A higher priced mortgage
a.A safe harbor
What Rule prohibits loan originators from being paid based on terms of a loan?
a. Qualified Mortgage
b. Ability to Repay
c. Loan Originator Compensation
d. Regulation X
c.Loan Originator Compensation
What type of fraud scheme usually includes a “get rich quick” real estate seminar?
a. Chunking
b. Churning
c. Redlining
d. Illegal Property Flipping
a.Chunking
What type of scheme is usually occurring when there is a nonexistent property?
a. Air Loan
b. Chunking
c. Churning
d. Illegal Property Flipping
a.Air Loan
When a lender in the primary mortgage market sells loans to the secondary market in groups of loans that are similar in quality and size, it is referred to as a:
float agreement.
jumbo package.
loan pool.
conforming loan bundle.
loan pool.
When a trust deed (or deed of trust) is recorded, which of the following is true?
a. Ownership is conveyed
b. A lien is released
c. An lien is created
d. It verifies both the lender and borrower signed the document
c.An lien is created
When considering a VA loan, what additional type of income must be considered?
a. Residual Income
b. Social Security Income
c. Child Support Income
d. Investment Income
a.Residual Income
When money is not paid out and withheld from the funding at a loan closing, these monies are usually held as:
a. An impound
b. An escrow
c. An encumbrance
d. A withholding
b.An escrow
When performing the sales comparison approach, what does “adjusting properties” involve?
a. Changing the subject property to make it more like the comparables
b. Changing the comparables to make them more like the subject property
c. Always using comparables that are exactly like the subject property
d. Finding comparables that sold for the same price as the subject property
b.Changing the comparables to make them more like the subject property
When the borrowers pay a fee to get a lower interest rate, but the interest rate will not remain at that level for the life of the loan, but over time will raise to the quoted fixed rate. What is this called?
a. Origination fee
b. Discount points
c. Adjustable rate
d. A buydown
d.A buydown
When the interest rate floats, it means which of the following?
a. That the interest rate cannot go up but can go down
b. That the interest rate can continue to go up or down until it is locked
c. That the interest rate cannot go down but can go up
d. That the interest rate cannot go down or up
b.That the interest rate can continue to go up or down until it is locked
Where do funds for an FHA loan come from?
The Department of Housing and Urban Development
Approved FHA Lenders
Ginnie Mae
The CFPB
Approved FHA Lenders
Where, in the TILA, is the explanation for higher-priced loans located?
a. Section 32
b. Section 35
c. Section 23
d. Section 42
b.Section 35
Which best describes the housing ratio?
a. The total cost of all debt divided by the borrower’s gross monthly income
b. The total cost of all housing expenses divided by the borrowers gross monthly income
c. The total cost of all the housing expenses divided by the borrower net monthly income
d. The total cost of all debt divided by the borrower’s net monthly income
b.The total cost of all housing expenses divided by the borrowers gross monthly income
Which federal law prohibits mortgage relief service providers from requiring an advance fee before the provider has obtained and the borrower has accepted a written offer from the borrower’s lender or servicer?
a. Reg. N
b. Reg. O
c. Reg. X
d. Reg. Z
b.Reg. O
Which federal law prohibits someone from inquiring about childbearing?
a. HMDA
b. ECOA
c. Fair Housing Act
d. RESPA
b.ECOA
Which federal law was put into place to improve consumer’s access to credit information?
a. FCRA
b. FACTA
c. Gramm-Leach-Bliley
d. Red Flags Rule
b.FACTA
Which is considered an illegal referral fee?
a. A lead generating company getting a higher fee if the lead closes
b. MLOs buying leads from a legitimate lead generating company
c. MLOs pursuing lead from past borrowers
d. An employee of a lead generating company referring a potential borrower to an MLO
a.A lead generating company getting a higher fee if the lead closes
Which of the following can’t be asked about marital status?
Married
Unmarried
Divorced
Separated
Divorced
Which of the following is NOT a finance charge in a residential mortgage loan?
a. Loan origination fee
b. Appraisal fee
c. Mortgage insurance premium
d. Mortgage broker fee
b.Appraisal fee
Which of the following is not a HOEPA trigger test?
a. APR Test
b. Points and Fees Test
c. Prepayment penalty Test
d. Rescission Test
d.Rescission Test
Which of the following is not considered a protected class under Reg. B?
a. Age
b. Disability
c. Sex
d. National Origin
b.Disability
Which of the following is not one of the new disclosures required under TRID?
a. The Loan Estimate
b. The Closing Disclosure
c. The Home Loan Toolkit
d. The Adverse Action Notice
d.The Adverse Action Notice
Which of the following is not one of the three rules outlined within the Gramm-Leach-Bliley Act?
a. Safeguards Rule
b. Pretexting Rule
c. Ability to Repay Rule
d. Opt-Out Rule
c.Ability to Repay Rule
Which of the following is NOT true about the VOE?
It must be sent directly by the processor to the employer.
It must be signed by the personnel department or the borrower’s superior.
It can be sent electronically to the borrower to be presented to the lender.
It must be provided for all employed applicants, and must be fully completed, signed, and dated.
It can be sent electronically to the borrower to be presented to the lender.
Which of the following is true about asking a borrower questions about divorce?
a. Asking questions about divorce is permissible if there is any documentation in the loan file that suggests a divorce.
b. Questions about divorce are always allowed.
c. If you suspect a divorce based on visual evidence, questions may be asked.
d. Questions about divorce are never allowed.
a.Asking questions about divorce is permissible if there is any documentation in the loan file that suggests a divorce.
Which of the following must have an MLO license?
a. June, who is working as an attorney and negotiating terms on a loan for her client as part of her job as an attorney
b. William, who extends credit solely on timeshare plans
c. Jackson who is negotiating the terms of a loan on his primary residence
d. Lola, who is working as an independent contractor underwriter and is underwriting loans
d.Lola, who is working as an independent contractor underwriter and is underwriting loans
Which of the following situations would be considered a prohibited act or practice?
a. Tyler discusses with a borrower particular rates and terms that they qualify for
b. Laurie, an independent contract processor, renews her mortgage loan originator license
c. Riley, working as a processor for a mortgage lender, discusses specific options for locking a borrowers loan
d. Eileen, a mortgage loan originator, provides an additional appraiser comparables with the hopes that the appraiser might change the value on her borrower’s appraisal
c.Riley, working as a processor for a mortgage lender, discusses specific options for locking a borrowers loan
Which of the following statements best describes Form 1008?
a. FHA loan application
b. FNMA/FHLMC loan application
c. Transmittal summary
d. Underwriter request for more information
c. Transmittal summary
Which of the following transactions is not governed by the new TRID Rules?
a. A reverse mortgage
b. A closed-end second mortgage
c. A refinance transaction
d. A purchase money transaction
a.A reverse mortgage
Which of the following would be considered a red flag in an owner-occupied refinance loan?
a. The borrower owns a second home further than 50 miles away.
b. The borrower lives with his/her parents in the subject property.
c. The borrower owns another home in the same neighborhood.
d. The borrower resides in a home in the same neighborhood as subject property
d.The borrower resides in a home in the same neighborhood as subject property
Which of the following would fall into the 10% cumulative tolerance category if the consumer were allowed to shop?
Origination Fee
Title Insurance Fee
Underwriting Fee
Processing fee
Title Insurance Fee
Which of the following would NOT appear on Page 5 of the Closing Disclosure?
Finance charge
Amount financed
Total of Payments
Discount points
Discount points
Which of the following would not be a prohibited under the Loan Originator Compensation Rule?
a. A mortgage loan originator receives 10% additional for each ARM that they close
b. A mortgage loan originator receives $1,000 for selling a loan with an interest rate of over 4%
c. A mortgage loan originator receives a flat fee for each loan that they close
d. A mortgage loan originator receives a $5,000 bonus for loans over $250,000 that they close
c.A mortgage loan originator receives a flat fee for each loan that they close
Which of the following would NOT be counted as income?
Income from a Trust
Payments from a note or mortgage that will continue for at least the next 36 months
VA fully authorized education benefits
Part-time income, if verified that it has not been interrupted for the past two years and is likely to continue
VA fully authorized education benefits
Which of the following would usually not fall into the zero-tolerance category?
Transfer Taxes
Credit Report
Title Insurance
Appraisal
Title Insurance
Xavier has two mortgages on his home currently. He wants to refinance his first lien but wants to keep his HELOC open. Which of the following is true about this situation?
Xavier will have to ask the holder of the HELOC to subordinate
Xavier cannot refinance without refinancing them both into one loan
Xavier does not have to do anything, the new loan will automatically be in first position
Xavier will have to close his HELOC and reopen it after the refinance is closed
Xavier will have to ask the holder of the HELOC to subordinate
