Missed Quiz Items Flashcards
Define disparate treatment
When one protected group is treated differently from another similarly situated group - the discrimination is based on/because of a classification.
Define disparate impact
When a neutral policy or practice is applied equally to all applicants, but the policy or practice adversely affects a protected group
What is overt evidence of disparate treatment?
When a lender openly discriminates on a prohibited basis - a blatant statement or action of discrimination
What is comparative evidence of disparate treatment?
When a protected class applicant is treated less favorably than other applicants causing inconsistencies in the approval process - may not be intentional.
Define overt discrimination
When a lender openly discriminates on a prohibited basis - written or oral
Define redlining
An unethical practice where a financial institution makes it extremely difficult for residents of a particular neighborhood to borrow money
Define blockbusting
When a realtor and building developer attempt to convince non-minority property owners to sell their houses at low prices by promoting fear that minorities will soon be moving in
If a borrower is renting out their second home for half the year and living in it for the other half, is the property considered a rental property or investment property?
The property is still considered a rental property due to the borrower not living in the home and renting it out for any amount of time.
What should you do if a realtor asks for borrower’s sensitive information?
Refer the realtor to the borrower - do not give out their information.
Define churning
A loan is refinanced repeatedly, simply to exact more fees from the borrower
Define chunking
The sale of properties at artificially inflated prices, pitched as investment opportunities to naive real estate investors who are promised improbably high returns and loan risks
Define buy & bail
When a homeowner is current on their mortgage, but the value of their home has fallen below the amount owed, so they purchase another home without selling the first one and let the first one go into foreclosure.
Define foreclosure rescue schemes
Scheme that take advantage of borrowers who are in the process of or about to be in foreclosure (promises the borrower they can avoid foreclosure)
Define affinity fraud
When perpetrators rely on a common bond and exploit the trust and friendship that typically exist in the group of individuals to support the scheme
An LO intends to lock a loan then gets busy working on another file. When they go back to the loan to lock it, they realize the rate they were initially disclosed is higher priced. What do you do?
LO pays the difference to get the disclosed rate - borrowers are not responsible for your mistakes.
Define equity skimming schemes
An investor buys property from a homeowner facing foreclosure and agrees to lease the home to the homeowner. The fraudster then pays off the amount owed in foreclosure to acquire the deed and receives the homeowner’s equity
What are the four types of privacy notices?
Initial, opt-out, annual, revised
What is pretexting?
When a consumer’s information is obtained under false pretenses
What is the pretexting rule?
Prohibits the use of forged, counterfeit, lost, or stolen documents to obtain customer information from a financial institution
What is the safeguard rule?
Requires all files to be kept confidential and stored in a locked cabinet or drawer when not in use.
How long are you required to keep all file documents?
3 years - CD is 5 years
GLBA has three rules. What are they?
Safeguard, pretesting, financial privacy/opt-out
What is the MARS rule?
Made it illegal for mortgage assistance relief providers to collect upfront fees and requires additional disclosures
What regulation goes with the MARS rule?
Reg O (MARS-O)
What is the disposal rule?
A rule that dictates how institutions should dispose of consumer information
The disposal rule is part of what act?
FACTA
What is the opt-out rule?
Requires the use of privacy notices and allows the consumer to determine what information is shared with or sold to others
What does the chain of title show the underwriter?
Chain of title can help the underwriter identify illegal property flipping.
If a competitor is promising a borrower something and you promise the borrower the same thing or better not knowing if you can uphold the promise, is it legal and/or ethical?
This is legal, but is not ethical to make false promises.
If a borrower has a joint bank account with someone who is not a borrower, what must be done?
Disclose and document the deposits for the borrower and the non-borrower
If a loan is canceled by a borrower who decides to go with a different lender, is it ethical and/or legal to invoice the borrower for third-party fees?
This is both legal and ethical.
Define short sale flip
A perpetrator manipulates the short sale lender into approving a short payoff and conceals an immediate contingent sale to a pre-arranged end-buyer at a significantly higher sales price
Define short sale
A means of selling a house for less than the outstanding mortgage on it
Define ethics
Moral principles that govern a person’s behavior or conduct
Define morals
The principle concerning the distinction between right and wrong
Define pre-texter
Pretender
Define straw buyer
Individuals used by fraudsters to obtain a mortgage
What does FCRA stand for?
Fair Credit Reporting Act
What regulation goes with FCRA?
Reg V (FCRA-V)
What does GLBA stand for?
Gramm-Leach-Bliley Act
What regulation goes with GLBA?
Reg P (GLBA-P)
What does GLBA require of LOs?
Protect borrowers’ non-public information
What law made the QM rule?
Dodd-Frank
The Consumer Financial Protection Bureau (CFPB) was created from what law?
Dodd-Frank
Dodd-Frank is its own, separate law, but it is part of what other law due to it mandating parts of the other law?
TILA-Z
HOEPA, HPML, QM, ATR, and LO Comp all fall under…
TILA-Z
What is the Community Reinvestment Act?
Encourages depository institutions to help meet the credit needs of the communities in which they operate
What is the Fair Credit Reporting Act?
Regulates disclosure and use of consumer-credit information and ensures the right of consumers to have access to and to correct their credit reports.
What is the Home Mortgage Disclosure Act?
Provides the public loan data that can be used to assist in determining whether financial institutions are serving the housing needs to their communities and helps to identify potential discriminatory lending patterns
What is the Equal Credit Opportunity Act?
A law that makes it illegal for any lender to discriminate against an applicant based on race, religion, national origin, sex, etc
What is FACTA an amendment to?
FCRA
True or False - FACTA implemented that credit bureaus must provide free credit scores once a year.
False - FACTA implemented that credit bureaus must provide free credit reports once a year.
What does FACTA stand for?
Fair and Accurate Credit Transactions Act
What does RESPA stand for?
Real Estate Settlement Procedures Act
True or False - RESPA does not cover vacant land, land exceeding 25 acres, commercial or business loans, the government, or temporary financing.
True
What regulation goes with RESPA?
Reg X (RESPA-X)
What does MAP stand for?
Mortgage Acts and Practices
What regulation goes with MAP?
Reg N (MAP-N)
What does HMDA stand for?
Home Mortgage Disclosure Act
What regulation goes with HMDA?
Reg C (HMDA-C)
What does FinCEN stand for?
Financial Crime Enforcement Network
The Electronic Signature in Global and National Commerce Act is also known as…
The E-Sign Act
What does AfBA stand for?
Affiliated Business Arrangement
What does a lifetime cap do?
Limits the total upward adjustment for an ARM
How long after a Ch. 7 bankruptcy can a borrower qualify for an FHA loan?
2 years from the discharge date
How long after a Ch. 7 backruptcy can a borrower qualify for a CONV loan?
4 years from filing
How long after a Ch. 7 backruptcy can a borrower qualify for a VA loan?
2 years from the discharge date
How long after a Ch. 7 backruptcy can a borrower qualify for a USDA loan?
3 years from the discharge date
How long after a Ch. 13 bankruptcy can a borrower qualify for an FHA loan?
1 year after filing
How long after a Ch. 13 bankruptcy can a borrower qualify for a CONV loan?
2 years from the discharge date or 4 years from dismissal
How long after a Ch. 13 bankruptcy can a borrower qualify for a VA loan?
1 year after filing
How long after a Ch. 13 bankruptcy can a borrower qualify for a USDA loan?
1 year after filing
What never changes in an ARM?
Margin
What does ARM stand for?
Adjustable Rate Mortgage
Which two forms disclose the pre-payment penalty?
LE and CD
What percentage does 1 basis point translate to?
.1%
The index + the margin =
The fully-indexed rate
What does HECM stand for?
Home Equity Conversion Mortgage
What is the loan limit on CONV SFR?
$726,200
How long after a foreclosure can a borrower qualify for a CONV loan?
7 years
How long after a foreclosure can a borrower qualify for an FHA loan?
3 years
How long after a foreclosure can a borrower qualify for a VA loan?
2 years
How long after a foreclosure can a borrower qualify for a USDA loan?
3 years
How long after a short sale can a borrower qualify for a CONV loan?
4 years
How long after a short sale can a borrower qualify for an FHA loan?
3 years
How long after a short sale can a borrower qualify for a VA loan?
2 years
How long after a short sale can a borrower qualify for a USDA loan?
3 years
What are 2 unmarried borrowers called?
Co-mortgagers
What is the difference between a co-borrower and a co-mortgager?
Co-borrowers are married and on the same 1003.
Co-mortgagers are not married and therefore must submit separate 1003s.
How is rental income used?
The underwriter will take the lesser of the two options:
75% of the lease or 75% of the comparable rent addendum
If the net from rental income is positive, it can be counted as…
Income
If the net from rental income is negative, it should be counted as…
Monthly debt
PMI is on all loans over…
80% LTV
What is the calculation for the maximum monthly housing payment?
When given the front-end ratio, take the ratio (in decimal form) and multiple it to the monthly income
What is the calculation for front-end DTI?
Monthly housing payment / monthly income
What is the calculation for an ARM’s maximum rate?
Take the last number of ARMs caps and add it to the starting rate.
What does CRV stand for?
Certificate of Reasonable Value
What are costs the seller or lender pay called?
Seller concessions
What does HOEPA stand for?
Homeowners Equity Protection Act
What section(s) of TILA go with HOEPA?
Section 32 and Section 35
What is Section 32 of TILA?
HOEPA - high-cost
What is Section 35 of TILA?
HPML - high-price
What does Section 8 of RESPA do?
Prevents anything of value being exchanged for referrals or kickbacks
What is the Service Relief Premium based on?
Market value of the mortgage note (ie. interest rate, loan type, margin for ARMs, LTV, credit score, PMI, pre-payment risk)
If you are found in violation of the SAFE Act, what is the maximum fine?
$25,000 per violation
If you are found in violation of TILA-Z (including RESPA Section 8), what is the penalty?
$5,000 fine / 1 year in prison
If you are found in violation of RESPA Section 8, what is the penalty?
$10,000 fine and/or 1 year in prison
What does RESPA Section 6 do?
Regulates the servicing of mortgage loans
What does RESPA Section 10 do?
Regulates the escrowing of property tax and insurance
What does RESPA Section 9 do?
Prohibits requiring the purchase of settlement services as a condition for the sale of a property
True or False - TRID applies to reverse mortgages and HELOCs
False
If you are found in violation of the DNC rule, what is the penalty? (2024)
$50,120 fine
If you are found in violation of the DNC rule, what is the penalty? (2023)
$42,530 fine
Telemarketers cannot call between what hours?
9:00pm - 8:00am
True or False - If a customer is on the DNC list, an MLO can contact them if they are a previous client (can contact for 18 months from transaction), a prospective client who submits an inquiry/application (can contact for 3 months), or a client who has given written permission to be solicited with an unspecified time frame.
True
What is the maximum DTI for CONV?
28% / 36% (can go up to 45%)
What is the maximum DTI for FHA?
31% / 43%
What is the maximum DTI for VA?
41%
What is the maximum DTI for USDA?
29% / 41%
What is the minimum DoPa for CONV?
3%
What is the minimum DoPa for FHA?
3.5%
What is the minimum DoPa for VA?
0%
What is the minimum DoPa for USDA?
0%
What is the minimum credit score for CONV?
Depends, but generally 640
What is the minimum credit report for FHA?
580 with 3.5% down OR 500-579 if the borrower puts 10% or more down
True or False - All loan programs have mortgage insurance.
False - VA and USDA do not. VA has a funding fee based on the down payment amount. USDA has a guarantee fee annually and upfront. CONV only require PMI until the LTV is below 80%
True or False - For VA and USDA, gift funds are allowed, but only if they put a down payment down.
True
What is the maximum LTV on a CONV cash-out refi?
85%
What is the maximum LTV on an FHA cash-out refi?
85%
What is the maximum LTV on a VA cash-out refi?
90%
What is the maximum LTV on a USDA cash-out refi?
No maximum
True or False - A non-occupying co-borrower is allowed on all loan types.
False - they are not allowed on CONV or USDA
What is the maximum seller concession for CONV?
Depending on the down payment amount
What is the maximum seller concession for FHA?
6%
What is the maximum seller concession for VA?
4%
What is the maximum seller concession for USDA?
No restriction
What is amortization?
When a payment covers the amount of interest and an additional amount towards the principal loan balance
A balloon mortgage of 7 / 23 is amortized for how long?
7 months & must be paid in full by the 23rd month
A balloon mortgage of 360 / 180 must be paid off in how long?
180 months / 15 years
It is amortized for 360 months / 30 years
If a hybrid arm has a cap structure of 2 / 3 / 6, what is the maximum the interest rate can adjust the first time?
2%
If a hybrid arm has a cap structure of 2 / 3 / 6, what is the maximum the interest rate can adjust over the life of the loan?
6%
A 5 / 1 ARM program means the loan will not adjust until the end of the 5th year. What does the 1 mean?
After the 5th year, the rate will adjust annually until the loan is paid off
Define customer
An existing relationship, servicers of mortgages
Define consumer
A new relationship, someone who is looking to open an account/apply for a loan
What does UDAAP stand for?
Unfair, Deceptive, and Abusive Acts or Practices
UDAAP falls under what law?
Dodd-Frank
Define unfair
Physical or actual receipt of an end result that is 1) substantial injury, 2) not beneficial, 3) not reasonably avoidable
Define deceptive
Misrepresentation or omission of material info; misleading
Define abusive
The purposeful attempt to intentionally confuse or to take advantage of the borrower with the deceptive act.
True or False - Underwriters cannot consider a borrower’s receipt of public assistance due to ECOA.
False - UWs must consider this as it is income.
When must you provide the borrower a privacy disclosure per GLBA?
Before you provide/disclose their information to a third-party
If a borrower did not complete their application, what form must you send them within 30 days?
None - the borrower did not complete the application process
True or False - RESPA does not impose/prohibit origination fees.
True
True or False - TILA-Z requires computation and disclosure of the APR to borrowers.
True
If an updated CD needs to be sent post-closing, how long does the lender have to send it? How long do they have to refund any amounts the borrower overpaid?
30 days send / 60 days refund
What is protected under ECOA, but not the FHA?
Age
How often does RESPA require escrow statements?
Annually
What is a zero-tolerance fee?
Charges that cannot increase at all from the initial LE to the final CD.
What is an example of a zero-tolerance fee?
Fees for anything the borrower cannot shop for; fees paid directly to the lender, mortgage broker, etc
What is a 10% cumulative-tolerance fee?
A group of fees that cannot cumulatively go up by more than 10% from the initial LE to the final CD
What is an example of a 10% tolerance fee?
Recording fees; required charges to a third-party for services (fees that are not paid to the lender, the borrower can shop for, and the consumer selects a servicer that is on the Settlement Service Providers list)
What is a no tolerance fee?
Fees that can go up by any amount between the initial LE and the final CD
What is an example of a no tolerance fee?
Prepaid interest, property insurance premiums, amounts placed in escrow, any fee that a company charges that a borrower shopped for
What triggers a high-cost loan?
When one or more of the triggers within the APR test, Points and Fees test, or the Pre-Payment Penalty Coverage test is met.
What triggers a high-priced loan?
If the APR is higher than…
- APOR + 1.5% (or greater) for 1st liens mortgage that meet FHFA loan limits
- APOR + 2.5% (or greater) for 1st lien mortgages that exceed FHFA loan limits
- APOR + 3.5% (or greater) for subordinate liens
How can you test if a loan is high-cost or not?
APR test
Points and Fees
Pre-Payment Penalty Coverage Test
What is the APR test?
if the APR is higher than the Average Prime Offer Rate by 6.5% or higher for first-liens equal to or greater than $50,000 or 8.5% or higher for second mortgages or first liens that are less than $50,000, the loan is high-cost
What is the points and fees test?
If a transaction exceeds 5% of the loan amount for loans greater than or equal to $26,092 or for loans less than $26,092, the lesser of 8% of the loan amount or $1,305, the loan is high-cost
What is the pre-payment penalty coverage test?
If a loan includes a pre-payment penalty that is more than 36 months after closing or is an amount more than 2% of the amount prepaid, the loan is high-cost
What are interest rates determined by?
Market forces and negotiations between borrowers and lenders
FHA loan limits change annually based on what?
FHA median housing prices
Who can get an FHA loan?
Anyone as long as they meet the qualifications
True or False - Servicing disclosures are due 3 days before closing
False - servicing disclosures are due 3 days after the application
If you suspect a borrower’s SSN is incorrect, what should you do?
Contact the SSA to verify
What does COFI stand for?
Cost of Funds Index
How much of the loan amount is the USDA guarantee fee?
1%
How much is FHA UFMIP with and without Home Equity Conversion Mortgage?
Without HECM 1.75%; With HECM 2%
If a VA borrower is putting down less than 5% on their 1st use, what is the funding fee?
2.15%
If a VA borrower is putting down 5% or more on their 1st use, what is the funding fee?
1.5%
If a VA borrower is putting down 10% or more on their 1st use, what is the funding fee?
1.25%
If a VA borrower is putting down less than 5% after their 1st use, what is the funding fee?
3.3%
If a VA borrower is putting down 5% or more after their 1st use, what is the funding fee?
1.5%
If a VA borrower is putting down 10% or more after their 1st use, what is the funding fee?
1.25%
If a VA borrower is doing an IRRRL, what is the funding fee?
.5%
What is a jumbo loan?
A single-family loan that exceeds Fannie and Freddie’s loan limits - they are conventional, non-conforming
Subprime loans were replaced by what?
Non-QM loans
What is NINA (subprime/alt-a)?
No Income/No Assets mortgage
What is SISA (subprime/alt-a)?
Stated Income/Stated Assets mortgage
What is SIFA/SIVA (subprime/alt-a)?
Stated Income/Full Assets mortgage
Stated Income/Verified Assets mortgage
What is No Doc/NINIA (subprime/alt-a)?
No Income, No Job, No Assets mortgage
What is Low Doc (subprime/alt-a)?
Minimal Income and assets mortgage
Define payment shock
When a borrower’s payment suddenly increases due to variable interest rates
How many years must alimony/child support/etc be proven to continue during underwriting?
3 years
True or False - FHA only allows owner-occupied properties.
True
What does BSA/AML stand for?
Bank Secrecy Act / Anti-Money Laundering
Under BSA/AML, how many days do you have to file a SAR once you have detected suspicious activity?
30 days
Define identity theft
Assuming of someone else’s information without their knowledge and using it to obtain credit
True or False - Fraud for criminal enterprise is done by borrowers
False - is it done by organized criminals
True or False - UDAAPs always cause financial injury
False
What is fraud for profit?
When a loan officer falsifies information on a loan application
If a lender does not post timely payments that the borrower has made, what type of violation is this?
UDAAP - this causes the borrower financial injury
True or False - Straw buyers are always aware of what they are part of.
False - sometimes straw buyers are victims of identity theft
True or False - HOI must cover the lesser of the loan balance or the insurable value of the improvements
True
HMDA requires the lender to obtain what information?
Race and sex
Fraud alerts under Economic Growth, Regulatory Relief and Consumer Protection Act last for how long?
1 year
Under ECOA, you cannot discriminate based on religion, national origin, and what 2 other things?
Sex and race
If you are constantly calling the husband the borrower and the wife the coborrower, what law are you in violation of?
ECOA - discrimination of sex
How can a borrower provide their intent to proceed?
Verbally or written
TILA defines a “business day” as…
Monday through Saturday except legal public holidays
True or False - the 1003 and the AfBA are required disclosures per RESPA.
False - it is the LE and the AfBA
HMDA requires lenders to report mortgage loan information based on what?
Geographic area
True or False - On an FHA loan, only the borrower can pay the discount points.
False - sellers can too if they choose to do so
Define encumbrance
A claim or liability that is attached to the property and that may lessen its value (lien or mortgage)
Define escrow
A legal document or property delivered by a promisor to a third party to be held by that third party for a given amount of time or until a condition is met. Then the third party will hand over the document or property to the promisor.
Define entitlement
An absolute right to a benefit granted immediately upon legal requirement
Define impounds
The portion of a monthly mortgage payment that is earmarked to pay property taxes and property insurance premiums (mostly called escrows)
Define equity
The amount by which the value of a property exceeds secured claims or liens
How long after consummation does the borrower have the right to rescind?
3 business days
Define restrictive covenant
A clause in a deed or a lease that limits what the owner of the land can do with the property.
Define encroachment
When a property owner violates the property rights of his neighbor by building something or allowing something to exist on the neighbor’s property
What does SRP stand for?
Service Release Premium
A person who brings a borrower and a lender together is known as…
A mortgage broker
True or False - When a loan is immediately being sold onto the secondary market, the responsibility of “funding” belongs to the secondary lender.
False - the responsibility of funding is always on the primary lender
Define easement
A legal right to use another’s land for a specific purpose
True or False - A borrower who has defaulted on a federal loan payment cannot receive an FHA loan
True - UWs use CAIVRS to confirm this
What does GNMA stand for?
Government National Mortgage Association (Ginnie Mae)
What does NMLS stand for?
Nationwide Multistate Licensing System and Registry
What does FNMA stand for?
Federal National Mortgage Association (Fannie Mae)
What does FHLMC stand for?
Federal Home Loan Mortgage Corporation (Freddie Mac)
True or False - Mortgage insurance allows for a borrower to obtain financing with lower down payments and higher LTVs
True
Under Reg Z, the borrower’s right to rescind within 3 business days does not apply to…
Loans to purchase or build the borrower’s residence
ECOA is enforced by…
CFPB - Consumer Financial Protection Bureau
True or False - RESPA is part of the TILA umbrella
False - RESPA falls under Reg X, not Reg Z
Reg C seeks to eliminate what?
Redlining
A lien is released by what document?
Deed of Recoveyance
True or False - borrowers must pay for a lender’s title insurance policy
True - they only have to get an owner’s policy if they want one.
True or False - PMI is used on FHA loans
False - it is used on CONV loans
(UF)MIP is used on FHA
FHA requires the borrower to occupy the property within how many days of closing?
60 days
When does PMI automatically get removed from a loan?
When the LTV reaches 78%
Borrowers can request that it is removed once the LTV equals 80%
When can a borrower pay off a CONV loan without a penalty?
Whenever - Fannie & Freddie do not allow for prepayment penalties
Self-employed borrowers who own what amount of their company must provide two years of tax return documentation?
25% ownership
A deed of trust creates a lien. A lien is not only a financial interest in the property; it is also a…
Financial encumbrance
True or False - The SAFE Act was designed to reduce fraud by creating an enforcement agency that prosecutes unethical activity
False - the SAFE Act did not create any enforcement agencies
Is the CFPB a federal banking agency?
No - it is a federal regulatory authority
After failing the NMLS test once, how long must you wait to retake it?
30 days
After failing the NMLS test three times, how long must you wait to retake it?
180 days
True or False - The penalties issued by the State Regulatory Authority are levy civil penalties on mortgage loan originators
True
The Housing and Economic Recovery Act was signed into law in what year?
2008 - to address the subprime mortgage crisis
Once your license is revoked, when can you apply to receive a new one?
Never
Define mortgage
A written instrument using real property to secure repayment of debt
Define note
A written promise by one party to pay money to another party
Define deed
an instrument that conveys a grantor’s interest in real property - serves are evidence of ownership
Define lien
A legal right or interest that a lender has in another’s property that lasts until the debt is paid off
An LO who works for a depository institution is called a…
Registered MLO
What does CSBS stand for?
Conference of State Bank Supervisors
SAFE Act stands for…
Secure and Fair Enforcement Act for Mortgage Licensing Act of 2008
True or False - In a purchase transaction, there is no right of rescission.
True - the 3 day rule only applies to refinances. Purchases fund on the same day.
What is the difference between ECOA and Fair Housing?
Fair Housing includes disabilities and excludes age. ECOA is the opposite.
True or False - The SAFE Act prohibits an MLO from collecting fees for best efforts and bribery related to a transaction.
True
What does LO Comp prohibit?
Compensation based on terms or fees of a transaction
True or False - An appraiser who is using the comparison approach is making neighborhood adjustments to determine the value of the property
False - they are adjusting the comparable to the subject property to give them a better-indicated value of the subject property
The cost approach is used on insurance, new construction, and remodeling but not…
To determine rental property income
A 2/1 Buydown is also called…
A graduated payment mortgage
When a foreclosure takes place, what is the document that dictates the foreclosure sale?
The mortgage
What type of deed guarantees clear title and the grantor’s right to convey?
Warranty deed
What is the document called that contains the details about the loan amount, payments, late penalties, interest rate, etc?
A note or promissory note
True or False - impounds keep a party from having a clear title.
False - Encumbrances do
A person operating without a license is subject to…
Civil money penalties
If you are teaching a Continuing Education course, how many credit hours do you receive for every one hour of teaching?
2 hours
True or False - The SAFE Act is in charge of licensing MLOs.
False - the individual states license them
If an MLO leaves the industry for more than 5 years, what do they have to do to become licensed again?
Retake the national test
What is the difference between a licensed MLO and a registered MLO?
Registered MLOs work for depository institutions.
True or False - NMLS does not provide tracking of the number of loans each LO writes
True
RESPA requires initial escrow statements to be sent how many days after closing?
45
Define reverse redlining
When a financial institution lends specifically in poor inner-city areas to charge them more
What 3 things can cause a change of circumstance?
An act of God, a change made by the borrower, or a change made by an extenuating circumstance
True or False - HOEPA allows borrowers to request removal of PMI when their LTV reaches 80%
False - Homeowners Protection Act does this; not Home Ownership and Equity Protection Act
What is title?
The link between the person who owns the property and the property itself
Was it FACTA or FCRA that was put into place to protect consumer’s from identity theft?
FACTA
What loan types are government-sponsored (GSEs)?
Fannie & Freddie
ATR is part of…
TILA
How long does a Chapter 13 bankruptcy stay on a credit report?
7 years
How long does a Chapter 7 bankruptcy stay on a credit report?
10 years
To what percentage does QM limit points and fees?
3%
True or False - to qualify for a QM loan, there is no maximum DTI limit.
True - the DTI limits for QM were replaced by APR over APOR
After making a counteroffer to a borrower and the borrower does not accept it, how long does the lender have to send an adverse action notice?
90 days
If a borrower puts down 10% or more on an FHA file, how long do they have to pay for MIP?
11 years
If an interest rate is floating, it can…
Go up or down until it is locked
When are HMDA reports due?
March 1st
What law requires disclosure of an affiliated business arrangement to the borrower?
RESPA
Under FACTA, when is a borrower entitled to a copy of their credit score?
When the borrower has applied for a loan and had his/her credit reviewed
Who receives the Yield Spread Premium (YSP)?
The borrower
What type of appraisal gives the land a separate value?
Cost Approach
How long does a consumer have to dispute inaccurate credit information?
30 days
Tenancy in the Entirety is held by who?
Husband and wife
A borrower is not likely to be approved if the borrower’s credit report shows they have been more than 60 days delinquent in the past…
12 months
