General Mortgage knowledge

Question 1

Traditional Mortgage

Answer 1

Loans that would have to be repaid over a 30 year term

Question 2

Full Amortization

Answer 2

if you make every payment according to the original schedule on your term loan, your loan will be fully paid off by the end of the term. The word amortization simply refers to the amount of principal and interest paid each month over the course of your loan term.

Question 3

what is a primary mortgage market

Answer 3

where credit institutions originate loans

Question 4

When the ARM has rate caps of 5/2/6 the 6 refers to what

Answer 4

Maximum rate can decrease over the life of the loan

Question 5

Name a Violation of the fair housing act

Question 6

What is Encumbrance

Answer 6

A claim Against property held by one who is not the legal owner

Question 7

What is the truth in lending act TILA

Answer 7

protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans

Question 8

How to calculate what percentage

Answer 8

smaller value divided by larger value x 100

Question 9

How to calculate annual interest rate formula

Answer 9

Principal X Interest Rate = Annual interest rate

Question 10

what law deals with credit, APR, & advertising of consumer loans

Answer 10

Tila / Regulation Z

Question 11

What regulation Prohibits kickbacks

Answer 11

Respa

Question 12

Which regulation requires the lender to cancel PMI when the loan reaches 78% LTV

Answer 12

HPA- homeowner protection act

Question 13

What is LTV

Answer 13

loan-to-value (LTV) ratio is a measure comparing the amount of your mortgage with the appraised value of the property. The higher your down payment, the lower your LTV ratio

Question 14

Which Regulation prohibits fee splitting

Answer 14

Respa

Question 15

X is the letter used to describe which regulation

Answer 15

Respa

Question 16

Respa is the acronym used to describe which law

Answer 16

Real estate settlement procedures act

Question 17

What type of mortgage requires a non refundable funding fee

Answer 17

VA

Question 18

What is the provision in a mortgage enabling a lender to demand full repayment if the borrower defaults on the loan

Answer 18

Acceleration clause

Question 19

What is the provision in a mortgage enabling a lender to demand full repayment if the borrower transfers the loan

Answer 19

alienation clause

Question 20

What does CFPB stand for

Answer 20

Consumer Financial Protection bureau

Question 21

What two laws created the CFPB

Answer 21

Dodd Frank act & Consumer finance protection act

Question 22

Which regulation is designed to help meet the credit needs of the communities in which it operates

Answer 22

CRA- Community Reinvestment Act

Question 23

What is Entitlement with a VA loan

Answer 23

The amount that the government will guarantee on a borrowers VA loan

Question 24

Residual Income Method

Answer 24

Determination is made if a veteran has enough income after paying debts

Question 25

What is HDMA

Answer 25

Home Mortgage Discrimination Act

Discrimination by lender in terms of race, gender, & gross income of the borrower

Question 26

What is a jumbo Loan

Answer 26

A loan that exceeds the maximum loan amount that Fannie Mae and Freddie Mac will buy, making it nonconforming.

Question 27

What is considered a nonconforming Loan

Answer 27

Examples of non-conforming loans are jumbo and government backed loans, including FHA, VA, and USDA

Question 28

Adjustable-Rate Mortgage (ARM)

Question 29

Balloon Payment

Answer 29

A final lump-sum payment at the end of a loan term to pay off the entire remaining balance of principal and interest not covered by payments during the loan term.

Question 30

When does Amortization occur

Answer 30

It occurs when a loan balance decreases because of periodic installments paid on the principal and interest.

Question 31

Redlining

Answer 31

When a lender refuses to make loans secured by property in a certain neighborhood because of the racial or ethnic composition of the neighborhood.

Question 32

Blockbusting

Answer 32

getting owners to sell their homes (often at a deflated price) by suggesting the ethnic or racial composition of the neighborhood is changing, with the implication that property values will decline as a result.

Question 33

Steering

Answer 33

Channeling prospective buyers or tenants to particular neighborhoods based on their race, religion, national origin, ancestry, or membership in any other protected class.

Question 34

Fiduciary

Answer 34

Person in a position of trust, held by law to high standards of good faith and loyalty

Question 35

Concealment

Answer 35

Occurs when a licensee fails to disclose information that is material to a decision to a party to whom the licensee has such a duty.