Florida State Law and Regulation Definitions (15%)

Question 1

The licensed loan originator in charge of, and responsible for, the operation of the branch office of a mortgage broker or mortgage lender

Answer 1

Branch manager

Question 2

What is a Branch office?

Answer 2

A location, other than a mortgage broker’s or mortgage lender’s principal place of business:
 The address of which appears on business cards, stationery, or advertising used by the licensee in connection with conducting business covered by Florida law
 At which the licensee’s name, advertising or promotional materials, or signage suggests that mortgage loans are originated, negotiated, funded, or serviced
 At which mortgage loans are originated, negotiated, funded, or serviced by a licensee

Question 3

What is a Financial audit report?

Answer 3

A report prepared in connection with a financial audit that is conducted in accordance with generally accepted auditing standards prescribed by the American Institute of Certified Public Accountants by a certified public accountant licensed to do business in the United States, and which must include:
 Financial statements, including notes related to the financial statements and required supplementary information, prepared in conformity with United States generally accepted accounting principles
 An expression of opinion regarding whether the financial statements are presented in conformity with United States generally accepted accounting principles, or an assertion to the effect that such an opinion cannot be expressed and the reasons

Question 4

A depository institution, real estate investment trust, insurance company, real estate company, accredited investor as defined in 17 C.F.R. ss. 230.501 et seq. , mortgage broker or mortgage lender licensed under the law, or other business entity that invests in mortgage loans, including a secondary mortgage market institution including, without limitation, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association, conduits, investment bankers, and any subsidiary of such entities.

Answer 4

Institutional investor

Question 5

A statement by the lender setting forth the terms and conditions upon which the lender is willing to make a particular mortgage loan to a particular borrower.

Answer 5

Loan commitment (Commitment)

Question 6

The total compensation from any source received by a mortgage broker acting as a loan originator. Any payment for processing mortgage loan applications must be included in the fee and must be paid to the mortgage broker.

Answer 6

Loan origination fee

Question 7

Closing a mortgage loan in a person’s name, advancing funds, offering to advance funds, or making a commitment to advance funds to an applicant for a mortgage loan.

Answer 7

Making a mortgage loan

Question 8

A change that would be important to a reasonable borrower in making a borrowing decision, and includes a change in the interest rate previously offered to a borrower, a change in the type of loan offered to a borrower, or a change in fees to be charged to a borrower resulting in total fees greater than $100.

Answer 8

Material change

Question 9

The total assets minus total liabilities pursuant to generally accepted accounting principles.

Answer 9

Net worth

Question 10

The licensed loan originator in charge of, and responsible for, the operation of a mortgage lender or mortgage broker, including all of the activities of the mortgage lender’s or mortgage broker’s loan originators and branch managers, whether employees or independent contractors.

Answer 10

Principal loan originator

Question 11

A mortgage broker’s or mortgage lender’s primary business office, the street address, or physical location that is designated on the application for licensure or any amendment to such application.

Answer 11

Principal place of business

Question 12

A loan originator who is employed by a depository institution, by a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency, or by an institution regulated by the Farm Credit Administration, and who is registered with and maintains a unique identifier through the NMLS

Answer 12

Registered loan originator

Question 13

Who is considered a Relative?

Answer 13

Any of the following, whether by the full or half blood or by adoption:
 A person’s spouse, father, mother, children, brothers, and sister
 The father, mother, brothers, and sisters of the person’s spouse
 The spouses of the person’s children, brothers, or sisters

Question 14

Authorizing a mortgage lender to service a loan for more than four months

Answer 14

Servicing endorsement

Question 15

To receive, cause to be received, or transferred for another, the installment payments of principal, interest, or other payments pursuant to a mortgage loan.

Answer 15

Servicing a mortgage loan

Question 16

An individual who, directly or indirectly, owns or controls an ownership interest in a corporation, a foreign corporation, an alien business organization, or any other form of business organization, regardless of whether the individual owns or controls such interest through one or more individuals or one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint stock companies, or other entities or devices, or any combination thereof.

Answer 16

Ultimate equitable owner

Question 17

Mortgage loan: Means any of the following:

Answer 17

 A residential loan for personal, family, or household use which is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling, as defined in s. 103(v) of the federal Truth-in-Lending Act, or for the purchase of residential real estate upon which a dwelling is to be constructed
 A loan on commercial real property if the borrower is an individual or the lender is a non-institutional investor
 A loan on improved real property consisting of five or more dwelling units if the borrower is an individual or the lender is a non-institutional investor

Question 18

The term “affiliate” has all of the following three meanings:

Answer 18

 Any entity that directly controls or is controlled by the license applicant or licensee
 Any entity controlled by a trust whose shareholders control the licensee or a company that owns the licensee either directly or indirectly through a trust or otherwise
 Any company, including a real estate investment trust, that is in a contractual relationship with the licensee or license applicant, and any of its affiliates or subsidiaries

Question 19

The broad MU Form definitions of ______ and _____ _____ _____ are intended to encompass all of these business organizations to ensure that all those who impact the decision-making for a licensee are accountable.

Answer 19

• “affiliate”

- “ultimate equitable owner”

Question 20

What is the periodic payment of principle and interest on a loan?

Answer 20

Debt Service

Question 21

The right of redemption upon all sales under this part shall exist in favor of the person whose interest is sold and may be exercised in the same manner as is or may be provided for redemption of real property from sales under mortgages.

Answer 21

Redemption and sale

Question 22

To entitle any instrument concerning real property to be recorded, the execution must be acknowledged by the party executing it, proved by a subscribing witness to it, or legalized or authenticated by a civil-law notary or notary public who affixes her or his official seal

Answer 22

Acknowledgment and proof; validation of certain acknowledgments; legalization or authentication before foreign officials