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NMLS Exam > Homemade NMLS Qs from Paul > Flashcards

Homemade NMLS Qs from Paul Flashcards

GET ABOVE A 70%!

1
Q

MLO paycheck can never be based on:

A

Rate
Term
Program

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2
Q

MLO CAN get PAID based on:

A

Flat fee in advance
Hourly rate for time worked
Overall loan volume (measured in units or dollars)

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3
Q

In advertisements, if you use a trigger term you must disclose the __________.

A

APR

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4
Q

How long must you keep applications/compliance with disclosures?

A

2 years

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5
Q

How long must you keep MARS Rule?

A

2 years

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6
Q

How long must you keep ECOA-B Complaints?

A

25 months

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7
Q

How long must you keep CDs/complice with compensation records/consummate files/compliance with qualified mortgage rule?

A

3 years

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8
Q

How long must you keep Final CDs/consummated files?

A

5 years

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9
Q

How long must you keep SARs Report?

A

5 years

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10
Q

How long must you keep Patriot Act?

A

7 years

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11
Q

To what does Higher-Priced Mortgage Loan (HPML) belong?

A

Section 35 of TILA

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12
Q

To what does Home Ownership and Equity Protection Act (HOEPA) belong?

A

Section 32 of TILA

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13
Q

What are prohibited terms in HPML / HOEPA?

A
  • Balloon payment within the first 5 years of the loan
  • Negative amortization
  • Prepayment penalties after first two years
  • Demand clauses
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14
Q

How do lenders have to advertise?

A

“equal housing lender”

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15
Q

How do MLOs have to advertise?

A

“equal housing opportunity”

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16
Q

If you live somewhere from 0-14 days a year it is considered a ____________.

A

investment property

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17
Q

If you live somewhere from 15 days - less than 6 months is considered a ___________.

A

2nd home

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18
Q

If you live somewhere for 6 or more months is considered a __________.

A

primary residence

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19
Q

What is the MAX penalty per day from the CFPB?

A

$25,000

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20
Q

initial disclosures (LE, HUD, SIB) must be sent at or within ___________ of application.

A

3 business days

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21
Q

fastest a loan may close (consummate) is on the ___________ after sending an LE

A

7th business day

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22
Q

fastest a loan may close is on the 3rd business day after receipt of a CD. Resets if:

A
  • Add prepayment penalty
  • Change program
  • APR increases by .125% or more
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23
Q

How many days do you have to make a decision on application?

A

30 days

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24
Q

How many days do you have to communicate exact reasoning for application decision?

A

60 days

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25
Q

How many days does borrower have from receipt of ADVERSE ACTION NOTICE (AAN) to get credit file?

A

60 days

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26
Q

Actual Fraud

A

you know better

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27
Q

Constructive Fraud

A

you don’t know &/or don’t look into it

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28
Q

What’s an example of a GSE?

A

Fannie Mae, Ginnie Mae, and Freddie Mac

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29
Q

What gives an MLO “safe harbor”?

A
  • Providing lowest interest rate
  • Lowest interest rate without risky features
  • Lowest total dollar amount for origination fees and discount points
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30
Q

A MLO may have ________ communication with an appraiser.

A

limited

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31
Q

USPAP is the

A

appraiser code of conduct… (Uniform Standards of Professional Appraisal Practice)

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32
Q

Blockbusting

A

Encouraging a person to move/sell based on race, ethnicity, religion, etc.

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33
Q

Who is most likely to falsify tax documents?

A

The Accountant (the only person who COULD forge them).

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34
Q

Who is most likely to falsify a sales contract or a purchase agreement?

A

The Real Estate Agent (the only ones that do it).

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35
Q

Blockbusting

A

encouraging people to sell

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36
Q

Who is most likely to falsify a deed or a title?

A

The government worker, county clerk, county reporter.

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37
Q

Redlining

A

Not giving money in a certain area (mortgages)

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38
Q

Steering

A

Channeling customer to an area/home/etc based on race, religion, ethnic background, etc.

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39
Q

Community Reinvestment Act of 1977

A
  • Has a program where banks can get money for not redlining

- It’s like a HMDA audit

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40
Q

HMDA - C evaluates ________ __________ and monitors ______

A

lending practices ; compliance

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41
Q

Section 114 of FACTA is _______.

A

RED FLAGS

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42
Q

HMDA - C ensures that people are following ______ and ___________.

A

ECOA & Fair Housing Act

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43
Q

What is the purpose of HMDA-C?

A

To identify discriminatory patterns

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44
Q

What does the Fair Housing Act say?

A

Don’t discriminate when buying, selling, or renting out a house

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45
Q

Can you ask someone where his/her downpayment comes from?

A

YES! for a downpayment

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46
Q

What does ECOA - B say?

A

Don’t discriminate when giving people money or credit

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47
Q

List the 12 protected classes

A
  1. Age
  2. Color
  3. Disability
  4. Familial status
  5. Income from public assistance
  6. Marital status
  7. LGBTQ/sexual orientation
  8. National origin/ethnicity
  9. Race
  10. Religion
  11. Separate credit reports
  12. Sex
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48
Q

Higher-Priced Mortgage Loan (HPML) “Higher-Priced” is Section ____ of _________.

A

Section 35 of TILA

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49
Q

Home Ownership and Equity Protection Act (HOEPA) “High Cost” is Section ____ of ________.

A

Section 32 of TILA

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50
Q

When is HPML triggered on your first lien?

A

When you have an APR +1.5% greater than APOR.

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51
Q

When is HPML triggered on your second lien?

A

When APR is +3.5% greater than APOR.

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52
Q

When is HPML triggered on a JUMBO loan?

A

When APR is +2.5% greater than APOR.

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53
Q

What does APOR stand for?

A

Average Prime Offer Rate (The average APR)

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54
Q

HPML / HOEPA are two separate laws. (True or False)

A

TRUE!

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55
Q

HPML / HOEPA

A
  • Gov DOES NOT “cap” interest rates
  • But IF you charge interest rates past a certain point, the gov is gonna make sure there are rules in place to protect to borrower
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56
Q

What is the Mailbox Rule?

A

a document is considered received on the 3rd business day after mailing

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57
Q

What is Recession?

A

3 day waiting period from closing to funding on a refinance of a primary residence

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58
Q

Must receive LE at least ___ days prior to close.

A

4

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59
Q

Must receive CD at least ___ days prior to close

A

3

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60
Q

Can LE / CD be sent on same day?

A

NO! MUST be AT LEAST one day apart.

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61
Q

Under FCRA do customers have the right to require removal of poor credit?

A

NO! Only the right to DISPUTE incomplete or inaccurate information.

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62
Q

What does GFE stand for?

A

good faith estimate

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63
Q

Who do you need approval from to give someone a CD?

A

the underwriter

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64
Q

What is considered a “business day”?

A

Monday - Saturday; no Holidays

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65
Q

What is the purpose of FACTA?

A

to empower consumers to prevent identity theft

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66
Q

Name another abbreviation for an LE.

A

GFE

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67
Q

Red Flag Rules are from what?

A

Section 114 of FACTA

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68
Q

Name another abbreviation for an CD

A

TIL

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69
Q

The Settlement Statement is also known as what?

A

The Final CD

HUB 1

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70
Q

Abbreviation for Loan Estimate

A

LE

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71
Q

Abbreviation for Closing Disclosure

A

CD

72
Q

What are you NEVER allowed to write on a form (except when writing about the subject property)

A

N/A

73
Q

The Loan Estimate is _______.

A

summarized

74
Q

The Closing Disclosure is _________.

A

itemized

75
Q

What is main font size?

A

12

76
Q

What is subtext font size?

A

8

77
Q

What law requires you to Safe Guard customers’ NPPI?

A

GLB

78
Q

What law keeps security of credit reports?

A

FACTA

79
Q

What is GLB?

A

Gramm-Leach Bliley Act; safeguard NPPI

80
Q

What does NPPI stand for?

A

Non-Public Personal Information

81
Q

What law requires customer identification programs? (CIPs)

A

The Patriot Act

82
Q

To what does RESPA apply?

A

covered transactions

83
Q

What is a covered transaction?

A

Any conventional loan, non-conventional loan, any reverse mortgage

84
Q

Where is the only place RESPA doesn’t apply?

A

ALL STAFF SALE

85
Q

What law covers 3rd party settlement procedure and providers?

A

The Real Estate Settlement Procedure Act (RESPA)

86
Q

Why is a Land Contract is considered risky?

A

Because you “Rent to Own”

87
Q

TCPA rules what hours for calling?

A

8am - 9pm borrower local call time, unless they have an established business relationship already.

88
Q

What does HELOC stand for?

A

Home Equity Line of Credit

89
Q

A Home Equity Line of Credit is

A

a mortgage; a lien; a line (or credit) instead of a loan; a line of credit with a mortgage; open-ended; all the rules still apply

90
Q

SAFE Act - Reg H is a law within which other law?

A

Title V of HERA (Housing Economic Recovery Act)

91
Q

360/120 or 360/180

A

balloon loan/balloon payment

92
Q

If you’re a Processor, can you be a W-2?

A

Yes!

93
Q

If you’re a Processor, can you be a 1099?

A

Yes; IF you pass an MLO test.

94
Q

If you’re an MLO, can you be a W-2?

A

Yes!

95
Q

What type of appraisal is a construction loan?

A

“subject to” appraisal

96
Q

What is the Successive Year Rule?

A

You cannot take the same course in back to back years for continuing education

97
Q

What is a Compensating Factor?

A
  • A strength that offsets a weakness

- ex: Maybe i have poor credit BUT i have been working a job 3 years with a new DOPE income

98
Q

List the 3 Non-Conventional Loan Types.

A

FHA, VA, USDA

99
Q

Can Non-Conventional Loans have a prepayment penalty?

A

NO!

100
Q

How often can the state technically audit you?

A

As often as they deem necessary

101
Q

For a Non-Conventional Loan that is a primary residence only within how many days must customer occupy the home?

A

60 days

102
Q

Non-Conventional Loans require you to stay in that home for how long?

A

At least 1 year

103
Q

Do Non-Conventional Loans require escrows?

A

Yes!

104
Q

A banker or a lender is a ______.

A

creditor

105
Q

A creditor is responsible for the final ________.

A

“clear to close”

106
Q

What is a creditor responsible for?

A

Gathering all papers (Act of Settlement Agent responsible for signing)

107
Q

What is an encumbrance?

A
  • Anything that encumbers a property/title from being transferred
  • Like a mortgage
108
Q

What is an easement?

A
  • Public right to be on private land
  • Ex: Gas meter reader can walk on your property
  • Ex: Sidewalks
109
Q

What is encroachment?

A
  • Structural trespassing

- Ex: our tree branches fall on Mark’s house; Anne’s fence is on our yard

110
Q

What is a setback?

A

The distance SET BACK from the road your house needs to be

111
Q

What is eminent domain?

A
  • The public government’s right to FORCE the sale of private land (at fair market value)
  • Poconos house
112
Q

What is an example of a “cloud on the title”?

A

I change my name. Who owns the house? Summer Seipel or Summer Andrews?

113
Q

Property taxes use _______ when customer move in in the middle of the month.

A

proration

114
Q

List the two different title insurance policies.

A

Lender’s Title Insurance Policy

Borrower’s Title Insurance Policy

115
Q

What type of insurance do Conventional Loans use?

A

PMI (private mortgage insurance)

116
Q

What type of insurance do Non-Conventional Loans use?

A

MIP (mortgage insurance premium)

117
Q

If you get ____% LTV (loan value), borrower HAS to take out insurance.

A

100%

118
Q

USPAP

A

Code of conduct for appraisers

119
Q

Appraiser: don’t want to see adjustments:

line

A

+/- 10%

120
Q

Appraiser: don’t want to see adjustments:

net

A

+/- 15%

121
Q

Appraiser: don’t want to see adjustments:

gross

A

+/- 25%

122
Q

Appraiser: don’t want to see adjustments:

land

A

+/- 30%

123
Q

Approaches to Appraisals:

Income approach:

A
  • Renting something out
  • Ex: i own a house on OSU campus but I rent it out
  • Compare rent income id make
124
Q

Approaches to Appraisals:

Cost approach:

A
  • New construction/weird property

- Ex: dome shaped house

125
Q

Approaches to Appraisals:

Sales/Market Approach:

A
  • Buy/refinance regular house

- Ex: they draw geographic circle on a map & compare to similar properties

126
Q

IRS Form 4506-T grants ______ __________.

A

Electronic permission

127
Q

Can we directly contact the IRS directly?

A

Yes!

128
Q

Can we directly contact Social Security?

A

Yes!

129
Q

What type of form is a IRS Form 8892?

A

a tax extension form

130
Q

Can we look at the source of income?

A

NO! (because all sources of income are “equal”)

131
Q

Can we look at the durability & stability of income?

A

Yes, please!

132
Q

Can we look at the source of down-payments and/or assets?

A

Yes, please!

133
Q

What are the 4 Cs of underwriting?

A
  1. Credit history
  2. Capacity to repay
  3. Cash assets
  4. Collateral
134
Q

For a disability payment, who will give an award letter?

A

Social Security

135
Q

Does short term disability qualify as a disability payment?

A

NO!

136
Q

What does the E-Sign Act say/do?

A
  • You can NEVER force a borrower to do online
  • Borrower can agree & then change mind
  • Wet signatures: sign w/ pen
137
Q

TILA - Reg Z laws apply to which two categories?

A
  • 1-4 SFD (single family dwelling)

- 5 + payments

138
Q

RESPA laws apply to which three categories?

A
  • 3rd party settlement
  • Covered transaction
  • 3rd party: not directly part of the transaction
139
Q

What is another term for a note rate?

A

interest rate (NOT APR)

140
Q

YSP

A
  • You accept a higher interest rate to pay less now in closing cost
  • Credit to borrower
141
Q

Discount Points

A
  • Person gives money upfront for a BON A FIDE interest rate drop/reduction
  • Charge to borrower
142
Q

Discount Points are also known as

A

permanent buydown

143
Q

When you are feeling questionable on the exam…

A

Go with whatever is in the borrower’s best interest and protects & helps them the most.

144
Q

Prepayment Clause

A
  • Penalty for paying soon

- ONLY a conventional & qualified mortgage can have this

145
Q

Defeasance

A

If you pay off the house, they can’t still charge you

146
Q

What is RESPA - X comprised of?

A

6: servicing
8: referrals
9: seller title insurance
10: escrows

147
Q

What is TILA - Z comprised of?

A 
Advertisements
MDIA (3/7/3)
AIR
MLO Comp Rule
HOPEA
148
Q

FHA DTI ratios

A

31/43

149
Q

What is Dodd-Frank Act - Reg Z comprised of?

A
  • Title X - Consumer Protection Act → created CFPB

- Title XIV - Mortgage Reform & Anti-Predatory Lending Act → Amended TILA/RESPA

150
Q

What is TILA/RESPA Integrated Disclosures (TRID) - Reg Z comprised of?

A
  • LE: loan estimate

- CD: closing disclosure

151
Q

What did Dodd Frank Act AND TRID amended?

A

RESPA and TILA

152
Q

What is the minimum downpayment on an FHA Loan

A

3.5%

153
Q

What is the minimum downpayment on a Conventional Loan?

A

5%

154
Q

What are Ethics and Discrimination Laws comprised of?

A
  • ECOA - B
  • Fair Housing Act
  • HDMA - C
  • CRA
155
Q

What are the two laws regarding credit?

A
  • FCRA - V

- FACTA -V

156
Q

What type of loan are public?

A

Non-Conventional (FHA, VA, USDA)

157
Q

What type of loan are private?

A

Conventional Programs (FNMA, private)

158
Q

What is another name for a loan?

A 
A note
(a promise to pay money = financing instrument/negotiable instrument)
159
Q

What is another name for a mortgage?

A 
A lien
(collateral = security instrument)
160
Q

What is another name for an instrument?

A

documents

161
Q

What is the Primary Market?

A

lenders make mortgage loans directly to borrowers

162
Q

What is the Secondary Market?

A

private investors and gov agencies (FNMA, FRDMC, FHL Banks) buy and sell real estate mortgages

163
Q

Will Ginnie Mae BUY or SELL a loan?

A

NEITHER!!! They are insurance!

164
Q

What helped to restore faith in the cycle between the primary market, secondary market, pod/securities, and bond market?

A

The Dodd-Frank Act

165
Q

What established a “qualified mortgage”?

A

The Dodd-Frank Act

166
Q

Who can ONLY buy qualified mortgages?

A

FNMA (Fannie Mae)

167
Q

Loan Process Step 1

A

Inquiry

168
Q

What is INQUIRY

A
  • Not a full application
  • Borrower inquires about rates and terms of a loan
  • Must provide APR which is NOT the interest rate
169
Q

Loan Process Step 2

A

Application

170
Q

What is APPLICATION

A

Collection of:

  • Address
  • Loan amount
  • Income
  • Estimate of property value
  • Name
  • SSN

ALIENS constitutes the LEGAL EVENT of an application → this triggers a clock that starts ticking.

171
Q

What is the application form known by?

A

Uniform Residential Loan Application = 1003 = URLA = 65

172
Q

What are the Three Steps of Money Laundering?

A
  • Placement
  • Layering
  • Integration
173
Q

Who can take applications?

A

Only an MLO

174
Q

After accepting an application, what can you do?

A
  • Accept
  • Deny
  • Withdrawal
175
Q

Loan Process Step 3

A

Processing

176
Q

What is the percentage for total DTI for a qualified mortgage?

A

43%

NMLS Exam (12 decks)

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