Laws Part 2:

Question 1

The costliest type of fraudulent activity costing the mortgage industry millions of dollars each year is:

Answer 1

Fraud For Profit

Question 2

l of the following homeowner obligations would be found in a mortgage contract except:

Answer 2

Owner must maintain a reliable source of income

Question 3

Creditors may not issue revisions to a Loan Estimate due to…

Answer 3

technical errors, miscalculations or underestimations of charges

Question 4

What does a title commitment do?

Answer 4

A title commitment is a legal promise to issue a title policy; it is a statement of the terms and conditions that the insurance company agrees to uphold. The title commitment describes the condition of the property at that time.

Question 5

Under the Fair Credit Reporting Act, a “furnisher” is defined as:

Answer 5

An entity that furnishes credit information to a CRA

Question 6

The Model State Law is a document

Answer 6

created by the CSBS and the AARMR to guide states in implementing the legislation required by the SAFE Act.

Question 7

A lien on real property, documented by a signed mortgage contract, gives the lender the right to:

Answer 7

to take possession of and sell the property to recoup some or all losses.

Question 8

The income approach used in an appraisal may determine value based on

Answer 8

rental rates of similar competing properties.

Question 9

If a consumer submits a complaint about a mortgage lender to the CFPB, the lender has how many days to respond before CFPB publishes the complaint in its public complaint database?

Answer 9

15

Question 10

A mortgage and lien are both examples of____

Answer 10

encumbrances

Question 11

If a foreclosure proceeding has been initiated by a creditor, the borrow may exercises his/her three year right to rescind if the finance charge for the loan was understated by:

Answer 11

More than 35$

Question 12

Disparate Impact

Answer 12

It occurs when a practice or policy that appears to be non-discriminatory on its face has a disproportionately negative effect on members of a particular race, gender or other protected class.

Question 13

Disparate Treatment

Answer 13

Discrimination that is defined by differences in the way members of a protected class are served by the institution.

Question 14

ECOA requires the borrower to know the status of his/her loan within

Answer 14

30 days of application

Question 15

Oversight for FCRA is shared between the

Answer 15

FTC and the CFPB

Question 16

The promissory note contains

Answer 16

borrower’s name, loan amount, interest rate, loan terms, and a provision requiring notices be done in writing

Question 17

Transactions for higher-priced mortgage loans do not include:

Answer 17

Counseling

Question 18

Which loans require counseling:

Answer 18

High Cost, Reverse Mortgages, and Negative Amortization

Question 19

That a borrower’s income will require verification describes the underwriting concept of..

Answer 19

Capacity

Question 20

What do USDA Rural Development loans take into consideration?

Answer 20

the area median income

Question 21

In order to complete an appraisal for a construction loan, what specific information does the appraiser need from the builder?

Answer 21

plans and specs of the project

Question 22

A document that conveys ownership of real property from the grantor to the grantee is known as a

Answer 22

deed

Question 23

factors involved in determining the movement on an ARM loan include

Answer 23

Frequency of change, caps, index, margin

Question 24

The mortgage loan originator’s employment history is…

Answer 24

Available for access

Question 25

Which of the following statements describes a lending practice that is prohibited by HOEPA and its implementing regulations?

Answer 25

lending decisions based solely on the amount of equity in a loan applicant’s home and requires consideration of repayment ability

Question 26

Which act provides a specific definition of a nontraditional loan?

Answer 26

SAFE Act

Question 27

High-cost mortgages are permitted to have a

Answer 27

variable interest rate

Question 28

When funds are placed in a separate escrow account to offset the monthly payments required by the terms of a loan, and those funds are used to reduce the payment rate for a period of time, this is known as

Answer 28

Temporary Buy Down

Question 29

A qualified mortgage may only include a balloon payment if the loan has:

Answer 29

a term of at least five years, has a fixed interest rate, and is made by a small creditor.

Question 30

A Loan Program Disclosure must be provided for each variable-rate mortgage product in which

Answer 30

the applicant expresses an interest

Question 31

the fact that an adult has a child 18 or younger living with him or her.

Answer 31

familial status

Question 32

A revised Loan Estimate is required when:

Answer 32

The loan applicant locks his or her interest rate

Question 33

A VA loan that is an IRRRL:

Answer 33

Is a qualified mortgage, and may have a conclusive presumption of compliance

Question 34

When a credit report shows only a balance on a revolving debt, rather than a payment, an originator should:

Answer 34

Use 5% of the debt as the payment

Question 35

Under federal law, a mortgage broker does not have a…

Answer 35

fiduciary relationship with a loan applicant

Question 36

The “Your Home Loan Toolkit” disclosure is required for a

Answer 36

purchase transaction

Question 37

FACTA requires an initial Fraud Alert to be kept in a consumer’s file for a period of:

Answer 37

1 year