Missed Questions Flashcards
Which is NOT a function of the secondary markets?
a) Moderate effects of local real estate
b) Cycles provide lenders with money to make more loans
c) Serve as a depository for consumer assets
d) standardize underwriting guidelines
c) serve as a depository for consumer assets
Which legislation designates federal privacy protection and consumer identification requirements under the CFPB?
a) Equal Credit Opportunity Act (ECOA)
b) The Fair and Accurate Credit Transactions Act (FACTA)
c) Home Ownership and Equity Protection Act
d) Truth in Lending Act (TILA)
b) The Fair and Accurate Credit Transactions Act (FACTA)
Which of the following legislations designates requirements that prohibit predatory lending under the CFPB?
a) Fair Credit Reporting Act (FCRA)
b) Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)
c) Fair Credit Reporting Act (FCRA)
d) Truth in Lending Act (TILA)
b) Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)
Which law requires MLOs to provide borrowers with a Loan Estimate of closing costs?
a) FCRA
b) HMDA
c) RESPA
d) TILA
d) TILA requires disclosure of the closing disclosure
A lender may not use ___ on the loan estimate.
a) N/A
b) POD
c) TBD
d) UNK
a) N/A can never be used
The Closing Disclosure discloses all of the following except:
a) Assumption of the mortgage loan
b) Escrow account information
c) Negative amortization features
d) Rate lock information
d) Rate lock information
The total amount of interest a consumer will pay over the loan term as a percentage of the loan amount is referred to as the:
a) annual percentage rate
b) interest plus PMI charges
c) total finance charge
d) total interest percentage
d) total interest percentage (TIP)
Delivering the Closing Disclosure to the borrower is the responsibility of the:
a) creditor
b) MLO
c) mortgage broker
d) settlement agent
a) creditor
The creditor is ultimately responsible for providing the closing disclosure.
Delivering the Closing Disclosure to the seller is the responsibility of the:
a) creditor
b) MLO
c) mortgage broker
d) settlement agent
d) settlement agent
The settlement agent/title agent is responsible for delivering the CD to the seller
The borrowers IOU is the
a) Mortgage
b) Note
c) Loan-to-Value Ratio
d) Equity
b) Note
The note (or promissory note) is a form of IOU
A 203 (k) is a:
a) FHA home rehabilitation plan
b) Loan Originator Retirement plan
c) Truth-in-Lending disclosure
d) Yield spread premium
a) FHA rehab loan
When a property owner dies without a will and the state is unable to locate any airs the state will claim the property. This process is known as:
a) Stealing
b) Escheat
c) Hypothecation
d) Intermediation
b) Escheat
How many months after a loan closes can a mortgage loan originator call to solicit new business from a customer whose phone number is on the Do Not Call List?
a) 3 months
b) 6 months
c) 18 months
d) No calls can be made to a number on the Do Not Call List
c) 18 months
Which law includes Red Flags Rules that require financial institutions and creditors to implement procedures to protect consumer identity?
a) Fair and Accurate Credit Transaction Act
b) Fair Credit Reporting Act
c) Gramm-Leach-Bliley Act (the Financial Privacy Act)
d) Homeowners Protection Act
a) Fair and Accurate Credit Transaction Act
FCRA mandates that a credit reporting bureau remove a customers Chapter 7 bankruptcy record after:
a) credit has been reestablished over 5 years
b) 7 years
c) 10 years
d) dismissal of the case by Federal Bankruptcy court
c) 10 years
The Fair and Accurate Credit Transaction Act Regulates all of the following except:
a) an adverse action notice to a borrower who is turned down for a loan
b) a credit freeze registered with a credit bureau
c) fraud alerts place on a credit report
d) truncation of credit card numbers on a credit card receipt
a) FACTA does not regulate adverse action notices
An upfront mortgage insurance premium is required:
a) on all FHA loans
b) only when the buyer can’t pay the required down payment in cash
c) only when the LTV exceeds 80%
d) only when the LTV exceeds 90%
a) upfront mortgage insurance (UFMIP) is required on all FHA loans
The use of borrowed funds to increase yield is:
a) Leverage
b) Acceleration
c) Defeasance
d) Forbearance
a) Leverage
What is the max flat fee that a lender can charge on a VA loan?
a) 1%
b) 2%
c) 3.5%
d) there is no limit, the fee is negotiable
a) 1%
Full VA entitlement can generally be restored to a veteran
a) if any disabled veteran assumes the loan
b) if an eligible veteran substitutes his entitlement for the seller’s
c) under no circumstances
d) when the loan is paid down to below 50% LTV
b) if an eligible veteran substitutes his entitlement for the seller’s
Which statement is true about interest rate buydowns on FHA loans?
a) borrowers may qualify at the buydown rate
b) borrowers must qualify at the note rate
c) FHA does not allow builder-paid buydowns
d FHA does not allow seller paid buydowns
b) borrowers must qualify at the note rate
What government agency enforces RESPA regulations?
a) CFPB
b) FCC
c) FHA
d) FTC
a) CFPB
A borrower offers to purchase a home for $120,000: His first mortgage ammount is $90,000, the seller is providing a second mortgage of 15% of the sale price and the borrower provides the balance as a cash down payment. What is the LTV? What is the CLTV?
a) 70% / 85%
b) 75% / 15%
c) 75% / 90%
d) 80% / 90%
c) 75% / 90%
The LTV is 75% ($90,000 / $120,000=75%); $90,000 is the first mortgage from the primary lender. The CLTV is 90% ($90,000 + $18,000 = $108,000 / $120,000); $18,000 is the second mortgage from the seller.
The federal Fair Housing Act prohibits discrimination based on race, color, religion, sex and:
disability/handicap, familial status or national origin
The HUD Rule on Equal Access to Housing states that a creditor is prohibited from denying a borrower credit because of:
sexual identity
Under the SAFE Act a loan originator is an individual who:
takes residential mortgage loan applications
