Mixed Study Facts

Question 1

Question 1:

What law deals with credit, APR & advertising of consumer loans?

Answer 1

TILA/REGULATION Z

Question 2

Question 2:

Which regulation prohibits kickbacks?

Answer 2

RESPA

Question 3

Question 3:

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

Answer 3

Answer 3:

HPA – Homeowners Protection Act

Question 4

Question 4:

Which regulation prohibits fee splitting?

Answer 4

Answer 4:

RESPA

Question 5

Question 5:

“X” is the letter used to describe which Regulation?

Answer 5

Answer 5:

RESPA

Question 6

Question 6:

RESPA is the acronym used to describe which Law?

Answer 6

Answer 6:

Real Estate Settlement Procedures Act

Question 7

Question 7:

What type of mortgage requires a non-refundable funding fee?

Answer 7

Answer 7:

VA Loan

Question 8

Question 8:

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

Answer 8

Answer 8:

Acceleration Clause

Question 9

Question 9:

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

Answer 9

Answer 9:

Alienation Clause

Question 10

Question 10:

What does CFPB Stand for?

Answer 10

Answer 10:

Consumer Financial Protection Bureau

Question 11

Question 11:

What two laws created the CFPB?

Answer 11

Answer 11:

Dodd Frank Act and Consumer Finance Protection Act

Question 12

Question 12:

Which regulation is designed to help meet the Credit Needs of the Communities in which it operates?

Answer 12

Answer 12:

CRA – Community Reinvestment Act

Question 13

Question 13:
Under ECOA rules and regulations, how many days does the borrower have to request a copy of an appraisal report if the application was denied?

Answer 13

Answer 13:

90 days

Question 14

Question 14:
Under ECOA rules and regulations, if an application for credit is denied, and if requested by the borrower -how many days does the lender have to provide a copy of an appraisal report?

Answer 14

Answer 14:

30 days

Question 15

Question 15:
If a loan application is APPROVED, under ECOA rules and regulations, when MUST a copy of the appraisal be provided to the borrower?

Answer 15

Answer 15:

3 business days prior to the loan closing

Question 16

Question 16:

Conforming Loans follow the guidelines of which regulators?

Answer 16

Answer 16:

Fannie Mae and Freddie Mac

Question 17

Question 17:
Which regulation requires the lenders to
“BE EQUAL” when extending credit to borrowers?

Answer 17

Answer 17:

ECOA – Regulation B

Question 18

Question 18:

How old must a borrower be to qualify for a Reverse Mortgage?

Answer 18

Answer 18:

62 years old

Question 19

Question 19:

Which regulation has the primary function of preventing Identity Theft?

Answer 19

Answer 19:

FACT Act

Question 20

Question 20:

Which regulation has SECTION 114 Rules?

Answer 20

Answer 20:

FACT Act

Question 21

Question 21:

Which regulation requires the creditor to verify the VALIDITY of any change of address received?

Answer 21

Answer 21:

SECTION 114 of the FACT Act

Question 22

Question 22:

What is the payment method used in a reverse mortgage that allows the homeowners to receive a monthly check while living in the property?

Answer 22

Answer 22:

TENURE Method

Question 23

Question 23:

What is the fraud scheme where a borrower uses someone else’s name to purchase the property, but that person WILL NOT be living at the property?

Answer 23

Answer 23:

Straw borrower

Question 24

Question 24:

What type of lender “insures” mortgages?

Answer 24

Answer 24:

FHA approved lenders

Question 25

Question 25:

What type of lender “guarantees” mortgages?

Answer 25

Answer 25:

VA approved lenders and USDA approved lenders

Question 26

Question 26:

What is the entity that loans money to fund purchases in rural areas?

Answer 26

Answer 26:

USDA/Dept. of Agriculture

Question 27

Question 27:

What is the value remaining in property after all liens and debts have been paid?

Answer 27

Answer 27:

Equity

Question 28

Question 28:

A borrower is refinancing his home. How much time does Reg Z give him to change his mind (rescind)?

Answer 28

Answer 28:

3 days

Question 29

Question 29:

Which Regulation established the 3-day right of rescission rule?

Answer 29

Answer 29:

TILA/REG Z

Question 30

Question 30:

Redlining is part of which regulation/Law?

Answer 30

Answer 30:

Fair Housing Act

Question 31

Question 31:

Blockbusting is part of which regulation/Law?

Answer 31

Answer 31:

Fair Housing Act

Question 32

Question 32:

Steering is part of which regulation/Law?

Answer 32

Answer 32:

Fair Housing Act

Question 33

Question 33:

Trying to convince a homeowner to SELL his home by implying that another race/ethnicity is moving in the neighborhood is called?

Answer 33

Answer 33:

Blockbusting/panic selling

Question 34

Question 34:

Trying to convince a homeowner to PURCHASE in a particular neighborhood based on his race, religion or ethnicity is called?

Answer 34

Answer 34:

STEERING

Question 35

Question 35:

Refusing to make loans on a property in a certain neighborhood for discriminatory reasons is called?

Answer 35

Answer 35:

Redlining

Question 36

Question 36:

What does HOEPA stand for?

Answer 36

Answer 36:

Home Ownership and Equity Protection Act

Question 37

Question 37:

HOEPA Loans are part of which larger regulation?

Answer 37

Answer 37:

Reg Z/TILA

Question 38

Question 38:

High Cost Loans are part of which larger regulation?

Answer 38

Answer 38:

Reg Z/TILA

Question 39

Question 39:

High Priced Loans are part of which larger regulation?

Answer 39

Answer 39:

Reg Z/TILA

Question 40

Question 40:

Section 32 Loans are part of which larger regulation?

Answer 40

Answer 40:

Reg Z/TILA

Question 41

Question 41:

Section 35 Loans are part of which larger regulation?

Answer 41

Answer 41:

Reg Z/TILA

Question 42

Question 42:

MDIA ACT is part of which larger regulation?

Answer 42

Answer 42:

Reg Z/TILA

Question 43

Question 43:

Mortgage Disclosure Improvement Act is part of which larger regulation?

Answer 43

Answer 43:

Reg Z/TILA

Question 44

Question 44:

What is another name for Annual Percentage Rate?

Answer 44

Answer 44:

Effective Rate

Question 45

Question 45:

What is another name for Interest Rate?

Answer 45

Answer 45:

Note Rate or Nominal Rate

Question 46

Question 46:

PITI divided by Gross Monthly income is referred to as what?

Answer 46

Answer 46:

Housing Ratio or Front-End DTI

Question 47

Question 47:

PITI + monthly debt divided by Gross Monthly income is referred to as what?

Answer 47

Answer 47:

Total Obligation Ratio – Back-end Ratio

Question 48

Question 48:

How long must TILA Disclosures be kept?

Answer 48

Answer 48:

2 years (exceptions – LE is kept for 3 years, and CD is kept for 5 years)

Question 49

Question 49:

What is the maximum amount of time that NEGATIVE info can remain on a credit report?

Answer 49

Answer 49:

7 years

Question 50

Question 50:

What is the maximum amount of time that a bankruptcy can remain on a credit report?

Answer 50

Answer 50:

10 years

Question 51

Question 51:

Which law/regulation states that a Bankruptcy can only remain on your credit for a MAX of 10 years?

Answer 51

Answer 51:

FCRA – Fair Credit Reporting Act – Reg V

Question 52

Question 52:

Which law/regulation states that negative information can only remain on your credit for a MAX of 7 years?

Answer 52

Answer 52:

FCRA – Fair Credit Reporting Act – Reg V

Question 53

Question 53:

Which law allows a consumer who has had her credit card used by an identity thief to place a credit freeze on her credit report?

Answer 53

Answer 53:

FACT ACT

Question 54

Question 54:

Which law requires creditors to TRUNCATE debit and credit card info on receipts?

Answer 54

Answer 54:

FACT ACT

Question 55

Question 55:

Which regulation requires that loan officers must take measures to secure and dispose of (burn and/or shred) a borrower’s sensitive credit information?

Answer 55

Answer 55:

FACT ACT

Question 56

Question 56:

Which regulation states that if a borrower is denied credit, he can receive a FREE copy of his credit report?

Answer 56

Answer 56:

FCRA – Fair Credit Reporting Act
REG V

Question 57

Question 57:

Which regulation states that if a borrower is unemployed, he can receive a FREE copy of his credit report?

Answer 57

Answer 57:

FCRA – Fair Credit Reporting Act – Reg V

Question 58

Question 58:

Which regulation states that if a borrower is on SSI or Disability, he can receive a FREE copy of his credit report?

Answer 58

Answer 58:

FCRA – Fair Credit Reporting Act – Reg V

Question 59

Question 59:

Which regulation states that if a borrower has been the victim of fraud, he can receive a FREE copy of his credit report?

Answer 59

Answer 59:

FCRA – Fair Credit Reporting Act – Reg V

Question 60

Question 60:

Which regulation states that a borrower can receive a FREE copy of his credit report once a year (no reason or requirement necessary)?

Answer 60

Answer 60:

FACT Act

Question 61

Question 61:

During the loan process, if you ask a borrower if he is single…which law are you violating?

Answer 61

Answer 61:

ECOA – Regulation B

Question 62

Question 62:

Which regulation states that the only correct way to ask about a borrower’s martial status is: are you married, unmarried or separated?

Answer 62

Answer 62:

ECOA – Regulation B

Question 63

Question 63:

Who is responsible for providing the closing disclosure to the borrower?

Answer 63

Answer 63:

The Creditor/Lender

Question 64

Question 64:

Who is responsible for providing the closing disclosure to the Seller?

Answer 64

Answer 64:

Settlement Agent/Title Agent

Question 65

Question 65:

Which regulation requires the borrower to receive the Loan Estimate?

Answer 65

Answer 65:

TILA – REG Z

Question 66

Question 66:

Which regulation requires the borrower to receive the Closing Disclosure?

Answer 66

Answer 66:

TILA – REG Z

Question 67

Question 67:

Which regulation requires the borrower to receive the Loan Estimate within 3 business days?

Answer 67

Answer 67:

RESPA – Regulation X

Question 68

Question 68:

Which regulation requires the borrower to receive the Closing Disclosure within 3 business days?

Answer 68

Answer 68:

RESPA – Regulation X

Question 69

Question 69:

As it relates to the loan estimate – what is the definition of a Business day?

Answer 69

Answer 69:

Any day that the Creditor’s office is open for business

Question 70

Question 70:

According to TILA/REG Z – what is the definition of a Business day?

Answer 70

Answer 70:

Any calendar day except for Sunday and Legal Holiday

Question 71

Question 71:

During the loan process, where do you find HMDA government monitoring information?

Answer 71

Answer 71:

Section 8 of the 1003 application, it is called Demographic Information

Question 72

Question 72:

What does HMDA stand for?

Answer 72

Answer 72:

Home Mortgage Disclosure Act

Question 73

Question 73:

What appraisal approach is used when appraising property that has been destroyed by a natural disaster?

Answer 73

Answer 73:

Cost Approach or replacement cost approach

Question 74

Question 74:

In the sales comparison approach, how many comps are required?

Answer 74

Answer 74:

3

Question 75

Question 75:

What is another name for the Financial Services Modernization Act of 1999?

Answer 75

Answer 75:

Graham Leach Bliley Act

Question 76

Question 76:

How many days does a CREDITOR have to notify a consumer of the status of a credit application (denied, approved, need more info)?

Answer 76

Answer 76:

30 days

Question 77

Question 77:

Which regulation states that a creditor has 30 days to notify a consumer of an application approval or denial?

Answer 77

Answer 77:

ECOA – REG B

Question 78

Question 78:

How many hours of Ethics is required to be taught in the 20hr Pre-licensing course?

Answer 78

Answer 78:

3 hours

Question 79

Question 79:

How many hours of Ethics is required to be taught in the 8hr Continuing Education course?

Answer 79

Answer 79:

2 hours

Question 80

Question 80:

How many hours of Federal Law is required to be taught in the 20hr Pre-licensing course?

Answer 80

Answer 80:

3 hours

Question 81

Question 81:

How many hours of Federal Law is required to be taught in the 8hr Continuing Education course?

Answer 81

Answer 81:

3 hours

Question 82

Question 82:

A mortgage that includes more than one parcel of land is called what?

Answer 82

Answer 82:

Blanket Mortgage

Question 83

Question 83:

A mortgage that includes appliances such as a stove or refrigerator is called what?

Answer 83

Answer 83:

Package Mortgage

Question 84

Question 84:

Which closing document itemizes the final closing cost and items paid in connection with the loan for the borrower?

Answer 84

Answer 84:

Closing Disclosure

Question 85

Question 85:

Which law deals with APR and Advertising of credit terms?

Answer 85

Answer 85:

TILA – REG Z

Question 86

Question 86:

What is the official name for the 3/7/3 rule?

Answer 86

Answer 86:

Mortgage Disclosure Improvement Act or MDIA Act

Question 87

Question 87:

What regulation requires the lender to perform an escrow analysis?

Answer 87

Answer 87:

RESPA – REG X

Question 88

Question 88:

Which law states that it is a violation to discriminate against a potential borrower on public assistance?

Answer 88

Answer 88:

ECOA – REG B

Question 89

Question 89:

What two classes are protected under Fair Housing Act - but NOT under ECOA?

Answer 89

Answer 89:

Disability/Handicap & Familial Status

Question 90

Question 90:

What three classes are protected under ECOA but NOT under Fair Housing?

Answer 90

Answer 90:

Age, Marital Status, and Public Assistance

Question 91

Question 91:

What is another name for a non-conforming loan?

Answer 91

Answer 91:

Jumbo Loan

Question 92

Question 92:

What is another name for a Jumbo loan?

Answer 92

Answer 92:

Non-Conforming Loan

Question 93

Question 93:

The front Ratio for an FHA loan is 31%… what is the back ratio?

Answer 93

Answer 93:

43%

Question 94

Question 94:

The front Ratio for a Conventional loan is 28%… what is the back ratio?

Answer 94

Answer 94:

36%

Question 95

Question 95:

The Ratio for a VA loan is?

Answer 95

Answer 95:

41%

Question 96

Question 96:

What is another name for the Bank Secrecy Act?

Answer 96

Answer 96:

The anti-money laundering act

Question 97

Question 97:

What is another name for the Anti-Money Laundering Act?

Answer 97

Answer 97:

Bank Secrecy Act

Question 98

Question 98:

Which law requires banks (financial institutions) to keep records of deposits of $10,000 made in cash?

Answer 98

Answer 98:

Anti-Money Laundering Act/Bank Secrecy Act

Question 99

Question 99:

Which law requires MLOs to file suspicion activity that might be a sign of tax evasion, money laundering, or other possible criminal activity exceeding $5,000?

Answer 99

Answer 99:

Anti-Money Laundering Act/Bank Secrecy Act

Question 100

Question 100:

If you fail the test, how long must you wait before retaking the exam?

Answer 100

Answer 100:

Required 30-day waiting period before retaking a failed test

Question 101

Question 101:

What does AUS stand for?

Answer 101

Answer 101:

Automated Underwriting System

Question 102

Question 102:

What does SAFE Act stand for?

Answer 102

Answer 102:

Secure & Fair Enforcement Act

Question 103

Question 103:

What does HERA stand for?

Answer 103

Answer 103:

Housing & Economic Recovery Act

Question 104

Question 104:

What does HPA stand for?

Answer 104

Answer 104:

Homeowner’s Protection Act

Question 105

Question 105:

What does GLBA stand for?

Answer 105

Answer 105:

Graham Leach Bliley Act

Question 106

Question 106:

What type of property is covered under RESPA?

Answer 106

Answer 106:

1 – 4 unit Residential Property

Question 107

Question 107:

Which regulation allows lenders to OBTAIN information regarding a borrower’s ethnicity, to help identify possible discriminatory patterns?

Answer 107

Answer 107:

HMDA – Regulation C

Question 108

Question 108:

When can a borrower request cancellation of PMI?

Answer 108

Answer 108:

When LTV Reaches 80%

Question 109

Question 109:

When must the lender automatically cancel PMI?

Answer 109

Answer 109:

When the LTV reaches 78%

Question 110

Question 110:

What is the primary market?

Answer 110

Answer 110:

Where borrowers/consumers obtain mortgage loans

Question 111

Question 111:

What is the secondary market?

Answer 111

Answer 111:

Where lenders buy & sell loans from one another

Question 112

Question 112:

Name the two Government Sponsored Enterprises (GSEs)?

Answer 112

Answer 112:

Fannie Mae
Freddie Mac

Question 113

Question 113:

Which GSE is the Federal National Mortgage Association?

Answer 113

Answer 113:

Fannie Mae

Question 114

Question 114:

Which GSE is the Federal Home Loan Mortgage Association?

Answer 114

Answer 114:

Freddie Mac

Question 115

Question 115:

TILA applies when credit is payable by written agreement in __________ installments?

Answer 115

Answer 115:

More than 4 installments

Question 116

Question 116:

Which AUS system does Fannie Mae use?

Answer 116

Answer 116:

Desktop Underwriter (DU)

Question 117

Question 117:

Which AUS system does Freddie Mac use?

Answer 117

Answer 117:

Loan Product Advisor (formerly Loan Prospector)

Question 118

Question 118:

How often must National DNC and internal DNC list be updated?

Answer 118

Answer 118:

Every 31 days and records must be maintained for 24 months

Question 119

Question 119:

An appraisal is valid for _____ months?

Answer 119

Answer 119:

An appraisal is valid for 6 months (updated 1/1/2020). It must be re-certified if the appraisal will be 4 months (120 days) old or more at closing.

Question 120

Question 120:

What is the penalty for violating the DNC Act?

Answer 120

Answer 120:

$46,517

Question 121

Question 121:

Which regulation allows the borrower to sue for 3x’s the amount paid for title insurance?

Answer 121

Answer 121:

RESPA Section 9

Question 122

Question 122:

If money was collected, and a borrower rescinds, how long does escrow have to return the funds?

Answer 122

Answer 122:

20 days

Question 123

Question 123:

MLOs seeking to become licensed in other states or who seek to move from a bank to a non-bank lender will be allowed ____ days of transitional (temporary) authority.

Answer 123

Answer 123:

These individuals are allowed to originate loans while completing any state-specific requirements for licensure such as education or testing for up to 120 days while they are applying to the state agency for their new license.

Question 124

Question 124:

What is the only fee that can be collected prior to delivery of the Loan Estimate?

Answer 124

Answer 124:

Credit Reporting fee

Question 125

Question 125:

Once an individual is unlicensed for ________ years as an MLO, most states require that the individual retake the 20hrs of pre-licensing education in order to have his MLO license reinstated.

Answer 125

Answer 125:

Once an individual is unlicensed for three (3) years as an MLO, most states require that the individual retake the 20hrs of pre-licensing education in order to have his MLO license reinstated.

Question 126

Question 126:

What law requires that the equal housing lender slogan and/or logo be placed on all advertising?

Answer 126

Answer 126:

Fair Housing Act

Question 127

Question 127:

How long does a person have to sue for a violation under the Fair Housing Act?

Answer 127

Answer 127:

1 year

Question 128

Question 128:

Once unlicensed for ______ years, the individual must retake and pass the National Exam.

Answer 128

Answer 128:

Once unlicensed for five (5) years, the individual must retake and pass the National Exam.
If the individual has worked as a registered MLO during this unlicensed period, he is credited for that time.

Question 129

Question 129:

What is the site where you can receive a free copy of your credit report, according to the FACT Act?

Answer 129

Answer 129:

www.Annualcreditreport.com

Question 130

Question 130:

The lender must provide the borrower with a list of then ______ HUD approved counselors.

Answer 130

Answer 130:

The lender must provide the borrower with a list of then (10) HUD approved counselors.

Question 131

Question 131:

What regulation is designed to protect consumer’s non-public information (NPI) and how it can and cannot be shared?

Answer 131

Answer 131:

GLBA

Question 132

Question 132:

Which law requires lenders to verify the date of birth, SS# and ethnicity of a person getting a loan in the United States?

Answer 132

Answer 132:

U.S. Patriot Act

Question 133

Question 133:

If you fail the test 3 times, what is the waiting period to retest?

Answer 133

Answer 133:

Six (6) Months/180 days

Question 134

Question 134:

Under HMDA, how long must a lender keep the Loan Application Register (LAR)?

Answer 134

Answer 134:

3 years

Question 135

Question 135:

What day does your license expire each year?

Answer 135

Answer 135:

December 31st

Question 136

Question 136:

What is the renewal period to keep your license current?

Answer 136

Answer 136:

NOV 1 – DEC 31st

Question 137

Question 137:

What are the two (2) types of mortgages that require that the homeowner meet with a counselor – to ensure that the he/she understands how the program works.

Answer 137

Answer 137:

Reverse mortgages & Higher-Priced (Section 35/HMLS) mortgages.

Question 138

Question 138:

Which Act requires companies to give consumers privacy notices?

Answer 138

Answer 138:

Gramm-Leach-Bliley

Question 139

Question 139:

Which act was implemented to promote financial stability and to protect consumers from abusive practices?

Answer 139

Answer 139:

Dodd Frank Act

Question 140

Question 140:

What is RESPA Section 6 responsible for?

Answer 140

Answer 140:

Mortgage Servicing

Question 141

Question 141:

What is RESPA Section 8 responsible for?

Answer 141

Answer 141:

Kickbacks, Fee Splitting & Unearned fees

Question 142

Question 142:

What is RESPA Section 9 responsible for?

Answer 142

Answer 142:

Title Insurance

Question 143

Question 143:

What is RESPA Section 10 responsible for?

Answer 143

Answer 143:

Escrow Accounts

Question 144

Question 144:

What is the max mortgage term (length) allowed for a mortgage to be classified as a Qualified Mortgage?

Answer 144

Answer 144:

30 years

Question 145

Question 145:

Until the loan estimate has been delivered, what fee can an MLO charge?

Answer 145

Answer 145:

Credit Report

Question 146

Question 146:

Estimate of charges and terms for settlement services must be available for at least _________ business days from the time the Loan Estimate is provided?

Answer 146

Answer 146:

10

Question 147

Question 147:

If a new (revised) Loan Estimate is required because of a changed circumstance, it must be disclosed and received by the borrower ________ days prior to consummation of the loan?

Answer 147

Answer 147:
Four (4) days!
The “initial” loan estimate is due at or “within” 3 days of the application.
A “revised” loan estimate is due “within” 3 days of the notice of change.
But in ALL CASES, it must be delivered four (4) days prior to consummation!
Because the soonest a loan can close (per the MDIA Act is 7 days! (3 + 4 = 7)

Question 148

Question 148:

Flood Insurance must be purchased from the _____________.

Answer 148

Answer 148:

Flood Insurance must be purchased from the National Flood Insurance Program (NFIP).

Question 149

Question 149:

The minimum amount of flood insurance required for a home in a flood zone is $_______.

Answer 149

Answer 149:

$100,000

Question 150

Question 150:

The max amount of flood insurance required for a home in a flood zone is $_______.

Answer 150

Answer 150:

$250,000

Question 151

Question 151:

The loan estimate must be retained for how long?

Answer 151

Answer 151:

3 years

Question 152

Question 152:

What does HMDA stand for?

Answer 152

Answer 152:

Home Mortgage Disclosure Act

Question 153

Question 153:

What does NOV stand for?

Answer 153

Answer 153:

Notice of Value

Question 154

Question 154:

What does CRV stand for?

Answer 154

Answer 154:

Certificate of Reasonable Value

Question 155

Question 155:

What does the “R” stand for in the acronym NMLSR

Answer 155

Answer 155:

REGISTRY

Question 156

Question 156:

What is a Mortgage Call Report (MCR)?

Answer 156

Answer 156:

Quarterly Report required by MLO Company and Mortgage Brokers

Question 157

Question 157:

Loan originator organizations must keep compensation records for how many years?

Answer 157

Answer 157:

3 years

Question 158

Question 158:

Mortgage companies must submit a residential loan origination activity report to the NMLSR every:

Answer 158

Answer 158:

Three months

Question 159

Question 159:

Which Act specifically prohibits blockbusting?

Answer 159

Answer 159:

The Fair Housing Act

Question 160

Question 160:

What law protects homeowners from foreclosure-prevention scams?

Answer 160

Answer 160:

Mortgage Assistance Relief Services Rule

Question 161

Question 161:

Which law requires financial institutions to keep detailed records of cash transactions exceeding $10,000 (withdrawing, depositing or transporting).

Answer 161

Answer 161:

Bank Secrecy Act/Anti-Money Laundering (BSA/AML)

Question 162

Question 162:

What type of federal report is filed when financial institutions detect suspicious activity?

Answer 162

Answer 162:

Suspicious Activity Report

Question 163

Question 163:

Which law requires businesses to print only the last five card numbers on a credit card receipt?

Answer 163

Answer 163:

FACT Act

Question 164

Question 164:

What happens if the acceptable variance between the Loan Estimate and the Closing Disclosure is exceeded?

Answer 164

Answer 164:

The excess is refunded to the borrower within 60 days

Question 165

Question 165:

A higher-priced home loan is one that has:

Answer 165

Answer 165:

APR exceeds the average prime rate by at least:

1. 5% for first-lien mortgage
2. 5% for a first lien Jumbo loan, or
3. 5% for a subordinate mortgage lien.

Question 166

Question 166:

What is the shortest time in which a mortgage purchase loan can close?

Answer 166

Answer 166:

7 business days

Question 167

Question 167:

Which law states that MLOs are required to report any suspicious activity exceeding $5,000 that may be a sign of tax evasion, money laundering, or other possible criminal activity.

Answer 167

Answer 167:

Bank Secrecy Act/Anti-Money Laundering (BSA/AML)

Question 168

Question 168:

Denise reviewed her credit report and discovered a few discrepancies and would like to dispute them – once disputed, how long does the credit reporting agency have to respond to the dispute?

Answer 168

Answer 168:

30 days

Question 169

Question 169:
The Red Flags Rules are also known as
________

Answer 169

Answer 169:

The Red Flags Rules are also known as Section 114 rules under the FACT Act

Question 170

Question 170:

What law requires ARM borrowers to receive the Consumer Handbook on Adjustable Rate Mortgages?

Answer 170

Answer 170:

TILA

Question 171

Question 171:

Which law requires that the “Know Before You Owe” booklet be given to the borrower?

Answer 171

Answer 171:

RESPA

Question 172

Question 172:

Lenders must maintain an escrow account for higher-priced (Section 35) mortgages for a minimum of:

Answer 172

Answer 172:

5 years

Question 173

Question 173:

What is the Fannie Mae appraisal report form?

Answer 173

Answer 173:

URAR - 1004 Form

Question 174

Question 174:

What lien has the highest priority and is paid off first when a property is sold?

Answer 174

Answer 174:

Property Tax

Question 175

Question 175:

What document is assigned along with the mortgage?

Answer 175

Answer 175:

Promissory note

Question 176

Question 176:
What term describes the process of a senior mortgage lien-holder voluntarily changing into a junior mortgage lien-holder?

Answer 176

Answer 176:

Subordination

Question 177

Question 177:

What does Ginnie Mae do?

Answer 177

Answer 177:

Guarantees Ginnie-Mae mortgage-backed securities

Question 178

Question 178:

Which law requires lenders to train employees to recognize the Red Flags of identity theft?

Answer 178

Answer 178:

FACT Act

Question 179

Question 179:

Which law entitles a borrower to a copy of his appraisal report?

Answer 179

Answer 179:

ECOA

Question 180

Question 180:

According to the GLB Act, a person who completes a single transaction with a creditor is known as a(n) customer or a consumer?

Answer 180

Answer 180:

A consumer

Question 181

Question 181:

The lowest possible interest rate for an ARM loan is known as the:

Answer 181

Answer 181:

Floor

Question 182

Question 182:

If an applicant works 30 hours every week and is paid $25.00 per hour, what is the applicant’s monthly income?

Answer 182

Answer 182:
$3,250
$25.00 x 30hrs a week x 52weeks in year / 12

Question 183

Question 183:

What law prohibits discrimination in the sale & lease of property?

Answer 183

Answer 183:

Fair Housing Act

Question 184

Question 184:

The term “20 basis points” expressed as a percentage is:

Answer 184

Answer 184:

0.20%

Question 185

Question 185:

The late fee for a conventional loan is:

Answer 185

Answer 185:

5% of principal and interest

Question 186

Question 186:

A funding fee is required for a:

Answer 186

Answer 186:

VA loan

Question 187

Question 187:

The mortgagee is the:

Answer 187

Answer 187:

Lender

Question 188

Question 188:

Who does Fannie Mae hold responsible for the quality of an appraisal?

Answer 188

Answer 188:

Lender

Question 189

Question 189:

Which law prohibits discrimination by lenders when extending credit?

Answer 189

Answer 189:

Equal Credit Opportunity Act

Question 190

Question 190:
A property sold for $200,000 and was appraised at $180,000. The borrower received a loan for $150,000. What is the loan-to-value?

Answer 190

Answer 190:
83.3%
($150,000/$180,000)

Question 191

Question 191:

How many days does a lender have to send an adverse action notice?

Answer 191

Answer 191:

30 days

Question 192

Question 192:

The enforcement of a lien is known as a:

Answer 192

Answer 192:

Foreclosure

Question 193

Question 193:

What minimum percentage of ownership qualifies an individual as self-employed?

Answer 193

Answer 193:

25%

Question 194

Question 194:

Which law defines the right of rescission?

Answer 194

Answer 194:

Truth-in-Lending

Question 195

Question 195:

How long after the application date must social security payments continue to be received in order to count as income?

Answer 195

Answer 195:

3 years

Question 196

Question 196:

Which clause in a mortgage allows a lender to increase the interest rate?

Answer 196

Answer 196:

Escalation

Question 197

Question 197:

DVA appraisal is known as a:

Answer 197

Answer 197:

CVR or NOV

Question 198

Question 198:

Which types of loans are meant for rural areas?

Answer 198

Answer 198:

USDA – Section 502

Question 199

Question 199:

The purchase price of a home is $200,000 and the loan amount is $180,000. The borrower pays 6% interest with 1 discount point and 1 origination point. What is the cost of the points?

Answer 199

Answer 199:
$3,600
($180,000 x 2%)

Question 200

Question 200:

What is the maximum allowable amount of DVA seller concessions?

Answer 200

Answer 200:

4%

Question 201

Question 201:

The late fee for DVA loan is:

Answer 201

Answer 201:

4% of principal and interest

Question 202

Question 202:

What is the clause in a mortgage that is also known as a “due on sale” clause?

Answer 202

Answer 202:

Alienation

Question 203

Question 203:

Alimony payments must continue to be received for how long after the application date if they are to be included as income?

Answer 203

Answer 203:

3 years

Question 204

Question 204:

Credit reports are good for how many days after they are pulled for qualifying purposes?

Answer 204

Answer 204:

120 days

Question 205

Question 205:

Which law protects an individual’s confidential information?

Answer 205

Answer 205:

Gramm-Leach-Bliley Act

Question 206

Question 206:
The Mortgage Servicing Disclosure Statement must be sent to the borrower within how many business days of receiving a loan application?

Answer 206

Answer 206:

3 days

Question 207

Question 207:

After an escrow account analysis, money must be refunded if the over-paid amount equals or exceeds:

Answer 207

Answer 207:

$50

Question 208

Question 208:

The maximum escrow cushion that a lender can require is:

Answer 208

Answer 208:

Equal to 2 months (1/6th)

Question 209

Question 209:

The fluctuating economic indicator used in an ARM is the?

Answer 209

Answer 209:

INDEX

Question 210

Question 210:

The Home Mortgage Disclosure Act (HMDA) was implemented by the:

Answer 210

Answer 210:

Federal Reserve Board

Question 211

Question 211:

Tax liens can be kept in the credit report for?

Answer 211

Answer 211:

7 years

Question 212

Question 212:

The range of possible credit score is:

Answer 212

Answer 212:

300-850

Question 213

Question 213:

The Red Flag Rule is concerned with:

Answer 213

Answer 213:

Identity theft

Question 214

Question 214:

Which type of mortgage is funded by the United States Department of Agriculture?

Answer 214

Answer 214:

Section 502 loans/USDA Loans

Question 215

Question 215:

What type of mortgage requires that the lender provide the borrower with the CHARM booklet?

Answer 215

Answer 215:

Adjustable Rate Mortgages

Question 216

Question 216:

For how many years must a lender retain the Escrow Cancellation Notice?

Answer 216

Answer 216:

2 years

Question 217

Question 217:

For how many years must a lender retain the Partial Payment Policy?

Answer 217

Answer 217:

2 years

Question 218

Question 218:

The mortgagor is the:

Answer 218

Answer 218:

Borrower

Question 219

Question 219:
Which law (regulation) is designed to create financial stability?

Answer 219

Answer 219:

The Dodd Frank Act

Question 220

Question 220:

Which appraisal approach is BEST for appraising vacant land, new construction or for unusual or special purpose?

Answer 220

Answer 220:

Cost Approach

Question 221

Question 221:

What establishes the lien position?

Answer 221

Answer 221:

Date and time of recording

Question 222

Question 222:

What type of mortgage has a fixed interest rate and increasing payments?

Answer 222

Answer 222:

Growing equity mortgage

Question 223

Question 223:

A graduated payment mortgage:

Answer 223

Answer 223:

Has payments that start low and increase over time

Question 224

Question 224:

If there is no minimum monthly credit card payment, what percent of the balance is used in the calculation of monthly debt?

Answer 224

Answer 224:

5%

Question 225

Question 225:

The Fannie Mae Total Obligations Ratio (back-end ratio) is:

Answer 225

Answer 225:

36%

Question 226

Question 226:

A borrower is paid $3,500 bi-weekly – what would be considered the gross monthly income?

Answer 226

Answer 226:
$7,583.33
$3,500 x 26 ÷ 12 = $7,583.33 per month

Question 227

Question 227:
Company or individual who, for a fee, places loans with lenders, but does not service such loans is called a ___________?

Answer 227

Answer 227:

Mortgage Broker

Question 228

Question 228:

Fannie Mae generally wants how many months of liquid financial reserves after closing?

Answer 228

Answer 228:

2 months

Question 229

Question 229:

The Penalty for Mortgage Fraud is ___________.

Answer 229

Answer 229:

$1,000,000 or imprisoned not more than 30 years, or both.

Question 230

Question 230:

A co-borrower whose income is used to qualify must sign the:

Answer 230

Answer 230:

Mortgage and the note

Question 231

Question 231:

Which form is used to summarize the information in the loan package on an FHA loan?

Answer 231

Answer 231:

Fannie Mae 1008 – Transmittal Summary

Question 232

Question 232:

An appraisal must be re-certified if it is older than:

Answer 232

Answer 232:

4 months

Question 233

Question 233:

The most probable price which a property should bring in an open market is:

Answer 233

Answer 233:

Market value

Question 234

Question 234:

The appraisal approach that best applies to vacant land is:

Answer 234

Answer 234:

Sales Approach

Question 235

Question 235:

The appraisal approach that best applies to a school is:

Answer 235

Answer 235:

Cost Approach

Question 236

Question 236:

Who handles complaints regarding mortgage loan rejections?

Answer 236

Answer 236:

CFPB

Question 237

Question 237:

What gives someone other than the owner the right to be on the property for a specific purpose?

Answer 237

Answer 237:

Easement

Question 238

Question 238:

What is a clause in the deed that limits the future use of a property?

Answer 238

Answer 238:

Deed restriction

Question 239

Question 239:

The most common type of legal description for residential subdivisions is:

Answer 239

Answer 239:

Lot and block

Question 240

Question 240:

The most accurate type of legal description for residential subdivisions is:

Answer 240

Answer 240:

Metes and bounds

Question 241

Question 241:

What type of funding occurs when a lender obtains funds from a line of credit at a commercial bank?

Answer 241

Answer 241:

Warehouse funding

Question 242

Question 242:

The late fee for FHA and DVA loans is:

Answer 242

Answer 242:

4%

Question 243

Question 243:

When a lender sells a mortgage loan to another lender this is called:

Answer 243

Answer 243:

Assignment of mortgage

Question 244

Question 244:

What type of mortgage fraud scam occurs when a buyer borrows the down payment from seller without the lender’s knowledge?

Answer 244

Answer 244:

Silent second

Question 245

Question 245:

What can result in a $1,000,000 fine and 30 years in prison?

Answer 245

Answer 245:

Acts of mortgage fraud

Question 246

Question 246:

After loan servicing is transferred, the new servicer cannot assess late fees for a period of ____ if the payment is made to the previous lender by mistake:

Answer 246

Answer 246:

60 days

Question 247

Question 247:

Which document is used in place of a mortgage to secure the payment of a promissory note? (This method is used in many states.)

Answer 247

Answer 247:

A deed of trust

Question 248

Question 248:

“APR” means…

Answer 248

Answer 248:

Annual percentage rate. This is the cost of credit expressed as a percentage.

Question 249

Question 249:

A Reconveyance Clause is:

Answer 249

Answer 249:

The method used to transfer title for a property following full payment of a loan. Reconveyance is typically used with deed of trust.

Question 250

Question 250:

A Subordinate lien is:

Answer 250

Answer 250:

The same as a second mortgage. It may also be called a junior lien.

Question 251

Question 251:

What is a mortgage?

Answer 251

Answer 251:

A legal document that connects a promissory note with the collateral used to secure the note.

Question 252

Question 252:

A deed is:

Answer 252

Answer 252:

A legal instrument that conveys title to real property.

Question 253

Question 253:

An amortization schedule is:

Answer 253

Answer 253:

A table providing the periodic payments needed to pay off a loan by the end of its term. The payments include principal and interest.

Question 254

Question 254:

Qualified mortgages may not have Back-end DTI exceeding:

Answer 254

Answer 254:

43%

Question 255

Question 255:

What is a note?

Answer 255

Answer 255:

A legal document that obligates a borrower to repay a loan. It specifies the terms by which the repayment will occur. It may also be called a promissory note.

Question 256

Question 256:

DVA underwriters use a debt ratio of:

Answer 256

Answer 256:

41%

Question 257

Question 257:

Discount points are paid to?

Answer 257

Answer 257:

The lender at closing to reduce the note rate of the loan

Question 258

Question 258:

Securitization is used to?

Answer 258

Answer 258:

Pool similar types of loans to create mortgage-backed securities for sale on the financial market. These securities are used to create a renewable source of funds for lenders.

Question 259

Question 259:

When does “Dry Settlement” occur?

Answer 259

Answer 259:

Parties meet to execute documents, but funds are not disbursed.

Question 260

Question 260:

When does “Wet Settlement occur”

Answer 260

Answer 260:

Parties meet to execute documents and funds are subsequently disbursed.

Question 261

Question 261:

Name four (4) involuntary liens that could be filed on a property.

Answer 261

Answer 261:

Tax liens
Mechanics liens
Judgements
Attachments

Question 262

Question 262:

What type of lien is a voluntary lien on property?

Answer 262

Answer 262:

A mortgage is a voluntary lien

Question 263

Question 263:

What is the definition of “Real Property”?

Answer 263

Answer 263:

Land and anything that is permanently affixed to it.

Question 264

Question 264:

Tom Brown is a nurse at the local hospital. He has worked the night shift for three years and plans to continue this schedule. His base pay is $29.50 per hour with a 5% shift differential. He averages 35 hours per week. What is his qualifying income?

Answer 264

Answer 264:

$4,697.87
Calculate the shift differential first: $29.50 * 5% = 1.475.
So, he gets an additional $1.475 per hour.
So, $1.475 + $29.50 = $30.975. $30.975 * 35hrs x 52weeks / 12 = $4,697.87

Question 265

Question 265:

If the purchase price is $300,000 and the loan amount is $250,000 and the appraisal value is $275,000…what is the LTV?

Answer 265

Answer 265:
90%
($250,000 / $274,000)

Question 266

Question 266:

Suppose the payment is late on a conventional loan and the monthly principal is $1,000, the monthly interest is $500, the monthly taxes are $125, and the monthly insurance is $25.00…what is the amount of the late payment?

Answer 266

Answer 266:

$75 ($1,500 x 5%)

• Remember – late charges are not calculated on the taxes and insurance!

Question 267

Question 267:
Suppose the payment is late on an FHA loan and the monthly principal is $1,500, the monthly interest is $150, the monthly taxes are $105, the MIP is $210, and the monthly insurance is $33.00…what is the amount of the late payment?

Answer 267

Answer 267:
$66
($1,500 + $150 x 4%)

Question 268

Question 268:

Monthly PITI payments are $1,400 and the borrower’s gross monthly income is $5,000. His other debts are $200 a month. What is the Housing Expense Ratio?

Answer 268

Answer 268:

28% ($1,400 ÷ $5,000)

Question 269

Question 269:

Monthly PITI payments are $1,400 and the borrower’s gross monthly income is $5,000. His other debts are $200 a month. What is the Debt-to-Income Ratio?

Answer 269

Answer 269:

32%
$1,400 + $200 ÷ $5,000

Question 270

Question 270:

What type of property is NOT covered by RESPA rules and regulations?

Answer 270

Answer 270:

All cash sales, rental units of more then 4, property 25 acres or more & commercial property.

Question 271

Question 271:

According to RESPA Section 6 - a servicer must make contact with a borrower after how many days of a missed payment?

Answer 271

Answer 271:

36 days

Question 272

Question 272:

A lender/servicer must inform the borrower of the available loss mitigation options after _____________ days of
missed payments?

Answer 272

Answer 272:

45 days

Question 273

Question 273:

Which regulation allows the borrower to sue for “treble” damages?

Answer 273

Answer 273:

RESPA Section 9

Question 274

Question 274:

What law requires the lender to provide an annual summary of the activity associated with the borrower’s impound account?

Answer 274

Answer 274:

RESPA Section 10

Question 275

Question 275:
The servicing transfer statement must be provided to the borrower ___________ prior to
transfer.

Answer 275

Answer 275:

15 days

Question 276

Question 276:

What are the six (6) items that make a “complete” application?

Answer 276

Answer 276:
ALIENS- 
Address, 
Loan Amount, 
Income, 
Estimated Value, 
Name, 
Social Security

Question 277

Question 277:
The “Know Before You Owe” disclosure must be provided within ____________ days of a
complete application?

Answer 277

Answer 277:

3 days

Question 278

Question 278:

The “Know Before You Owe” disclosure must be provided for what type of transactions?

Answer 278

Answer 278:

Purchase Only

Question 279

Question 279:
If the application is withdrawn within the first _________ days or the lender declines the application within the first _________ days, the lender is NOT required to provide the ____________ to the borrowers.

Answer 279

Answer 279:

3,3, initial disclosure

Question 280

Question 280:
________________ occurs
if the lender chooses the hazard insurance company when the borrower allows the policy to lapse.

Answer 280

Answer 280:

Forced-placed insurance

Question 281

Question 281:

Which items have a zero (0) tolerance between the Loan Estimate and the Closing Disclosure?

Answer 281

Answer 281:

Real estate transfer taxes, loan origination fees, interest rates, appraisal and credit report

Question 282

Question 282:

Which items have a 10% tolerance between the Loan Estimate and the Closing Disclosure?

Answer 282

Answer 282:

Government recording fees, title insurance

Question 283

Question 283:

On what document would you find information regarding the “RATE LOCK”?

Answer 283

Answer 283:

The Loan Estimate ONLY

Question 284

Question 284:

What is the penalty for violating RESPA?

Answer 284

Answer 284:

$10,000 and/or up to
1-year in jail

Question 285

Question 285:

Which Regulation is Regulation “Z”?

Answer 285

Answer 285:

Truth In Lending Act (TILA)

Question 286

Question 286:
Which disclosure requires that entities that purchase or acquire mortgage loans to notify the borrower and provide the name, address and telephone number of the new owner within 30 days of acquisition?

Answer 286

Answer 286:

Transfer of Ownership Disclosure

Question 287

Question 287:

The total “interest” being charged on the loan, expressed as a percentage is known as the ____________________?

Answer 287

Answer 287:

Total Interest Percentage (TIP)

Question 288

Question 288:

If a borrower was not properly notified of his/her right to rescind, how long can the rescission period be extended?

Answer 288

Answer 288:

Three (3) years

Question 289

Question 289:

How many copies of the “Right to Rescind” must each borrower receive?

Answer 289

Answer 289:

Two

Question 290

Question 290:

What law requires that the borrower receive the Right to Recession notice?

Answer 290

Answer 290:

TILA (Reg Z)

Question 291

Question 291:

What does APOR stand for?

Answer 291

Answer 291:

Average Prime Offer Rate

Question 292

Question 292:

When is a loan considered a Section 32 (High Cost) Loan?

Answer 292

Answer 292:
A loan will be considered a High Cost (Section 32) loan if its APR exceeds the APOR by more than 6.5% for a first lien or 8.5% for a subordination lien, or when the total points and fees payable in conjunctions with the loan exceed 5% (8% for loans of $20,000 or less).

Question 293

Question 293:

When is a loan considered a Section 35 (High priced) Loan?

Answer 293

Answer 293:
A loan will be considered a High Priced (Section 35) loan if it’s APR exceeds the APOR by more than 1.5%, 2.5% for jumbo first-lien loans and 3.5% for subordinate liens.

Question 294

Question 294:

What type of loans “require” an impound account?

Answer 294

Answer 294:

Section 35 High Priced Loans

Question 295

Question 295:

When is the CHARM booklet required?

Answer 295

Answer 295:

When the consumer received an adjustable rate mortgage

Question 296

Question 296:

What is the regulation/rule that states that a loan originator cannot receive Dual Compensation?

Answer 296

Answer 296:

Loan Originator compensation rule

Question 297

Question 297:
Which law states that a loan originator can only be paid a commission by one source, either the borrower or the lender – but not both?

Answer 297

Answer 297:

Loan Originator compensation rule

Question 298

Question 298:

If a lender issues a Qualified Mortgage, it is assumed that the borrower has satisfied what rule?

Answer 298

Answer 298:

The Ability-To-Repay (ATR) rule

Question 299

Question 299:

What is the max debt-to-income ratio allowed for a mortgage to be considered a qualified mortgage?

Answer 299

Answer 299:

43%

Question 300

Question 300:

What is the max term (length) allowed for a mortgage to be considered a qualified mortgage?

Answer 300

Answer 300:

30 years

Question 301

Question 301:

What is the max debt-to-income ratio allowed for a mortgage to be considered a qualified mortgage?

Answer 301

Answer 301:

43%

Question 302

Question 302:
What type of mortgage is not allowed to have toxic features such as: interest only, negative amortization, no income/no asset income qualifications or prepayment penalties?

Answer 302

Answer 302:

Qualified Mortgage

Question 303

Question 303:
What law are you violating if you ask a borrower (on a credit application) if he or she is planning to have any more kids in the future?

Answer 303

Answer 303:

ECOA – Reg B

Question 304

Question 304:

What law states that married spouses can keep separate credit bureau files, if requested?

Answer 304

Answer 304:

ECOA (REG B)

Question 305

Question 305:
Which law states that if a Loan Originator is taking an application “face-to-face” he/she must complete the Government Monitoring Section (Section X) of the 1003 application?

Answer 305

Answer 305:

ECOA (REG B)

Question 306

Question 306:

Which law states that an adverse action notice (denial) must be in writing?

Answer 306

Answer 306:

ECOA (REG B)

Question 307

Question 307:
If an applicant receives an adverse action notice – he can request a statement of “more specific” reason within _______________
of receipt of the notice?

Answer 307

Answer 307:

60 days

Question 308

Question 308:
ECOA states that creditors cannot discriminate against the __________ of the borrower’s income, however, they can discriminate against the _____________ of the borrower’s income.

Answer 308

Answer 308:

Source, Amount

Question 309

Question 309:

How long must ECOA records be kept?

Answer 309

Answer 309:

25 months

Question 310

Question 310:

How long does a consumer have to sue for a violation under ECOA?

Answer 310

Answer 310:

24 months

Question 311

Question 311:

Which law states that a borrower is entitled to receive a free copy of his credit score once a year?

Answer 311

Answer 311:

None. Credit “score” is never free

Question 312

Question 312:

How long do “unpaid” taxes appear on a credit report?

Answer 312

Answer 312:

Forever

Question 313

Question 314:

If a consumer has questions regarding his/her application, who should be contacted?

Answer 313

Answer 314:

The lender

Question 314

Question 315:

If a consumer has questions regarding his/her credit scores, who should be contacted?

Answer 314

Answer 315:

The credit reporting agency(ies)

Question 315

Question 316:
If a consumer is denied credit, what law states that the credit must provide the name, address, and telephone number of the credit reporting agency used to make the decision?

Answer 315

Answer 316:

FCRA – Regulation V

Question 316

Question 317:
What law requires lenders to provide the borrower with the National Credit Score Disclosure, which informs him/her of which credit score was used to approve the mortgage loan?

Answer 316

Answer 317:

FACT Act

Question 317

Question 318:

What law is the loan originator violating if he leaves the clients file on his desk at the end of the day?

Answer 317

Answer 318:

FACT Act

Question 318

Question 319:

If a consumer’s file is no longer needed, what is the proper way to dispose of it?

Answer 318

Answer 319:

Burn or Shred it

Question 319

Question 320:

What law requires lenders to file monthly reports regarding the ethnicity, race, and sex of all applicants?

Answer 319

Answer 320:

HMDA – Regulation C

Question 320

Question 321:
An individual who obtains or has obtained a financial product or service from financial institution for person, family or household reasons is referred to as a ______________________
according to the GLBA Act?

Answer 320

Answer 321:

Consumer

Question 321

Question 322:
An individual/consumer with a continued relationship with a financial institution is referred to as a _______________ according to the GLBA Act?

Answer 321

Answer 322:

Customer

Question 322

Question 323:

Gaining information under false pretense is referred to as ____________ under the GLBA?

Answer 322

Answer 323:

Pretexting

Question 323

Question 324:
According to the DNC list, telemarketers (including loan originators) must search the national DNC list ever _______________ days.

Answer 323

Answer 324:

Every 31 days

Question 324

Question 325:
A SAR (suspicious activity report) must be filed by a mortgage loan originator (MLO) when a person engages in suspicious activity of $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ or more?

Answer 324

Answer 325:

$5,000

Question 325

Question 326:
Which law increases the ability of law enforcement agencies to search telephone, email, medical and financial records of consumers?

Answer 325

Answer 326:

USA Patriot Act

Question 326

Question 327:

Which law is responsible for the establishment of the anti-money laundering act?

Answer 326

Answer 327:

USA Patriot Act

Question 327

Question 328:

Which law was established to identify and prevent redlining?

Answer 327

Answer 328:

Home Mortgage Disclosure Act (HMDA)

Question 328

Question 329:

How long must commercial advertising records be kept?

Answer 328

Answer 329:

2 years

Question 329

Question 330:

What law was created to prohibit money laundering and financing of terrorist?

Answer 329

Answer 330:

USA Patriot Act

Question 330

Question 331:

What is the name of the document that indicates the amount that the Veteran is entitled to?

Answer 330

Answer 331:

Certificate of Eligibility (COE), which shows the amount of his entitlement.

Question 331

Question 332:

What is the maximum flat fee that a lender can charge for a VA loan to cover lending cost?

Answer 331

Answer 332:

Lender may charge a flat fee, up to 1% of the loan amount, to cover the lender’s costs.

Question 332

Question 333:

An abusive practice in which a loan is refinanced without any tangible net benefit to the borrower is called?

Answer 332

Answer 333:

Loan Flipping

Question 333

Question 334:

FHA imposes restrictions requiring the borrower not to resale the property for the first _________ days.

Answer 333

Answer 334:

90 days

Question 334

Question 335:

FHA requires the lender to investigate the transfer history of property for the _______________ before resale, in an attempt to identify potential flipping schemes.

Answer 334

Answer 335:

Three years

Question 335

Question 336:

What type of loans have PMI (Private Mortgage Insurance)?

Answer 335

Answer 336:

Conventional loans where the borrower puts less than 20% down payment

Question 336

Question 337:

What type of loans have Up Front Mortgage Insurance Premium?

Answer 336

Answer 337:

FHA Loans

Question 337

Question 338:

In a conventional loan, how much of the down payment must come from the borrowers own (personal) funds?

Answer 337

Answer 338:

5% of the down payment

Question 338

Question 339:

What does the Debt Services portion of the monthly payment include?

Answer 338

Answer 339:

Debt Services includes the principal and interest portion only (P&I)

Question 339

Question 340:

What is a HECM?

Answer 339

Answer 340:

Home Equity Conversion Mortgage (aka) an FHA reverse mortgage

Question 340

Question 341:

When is a reverse mortgage due?

Answer 340

Answer 341:

Borrowers dies, sells the home, or cease to live in the home for 12 consecutive months

Question 341

Question 342:

What type of mortgage is it when the borrower is not required to make a payment, but the balance of the loan rises, and the equity shrinks?

Answer 341

Answer 342:

Reverse Mortgage

Question 342

Question 343:

What type of mortgage is it when the balance continues to grow, even though the borrower is making the full payment each month?

Answer 342

Answer 343:

Negative amortization

Question 343

Question 344:
A type of seller financing in which the seller finances enough money to cover the existing loan balance as well as any additional funds needed from the borrower is called a __________________.

Answer 343

Answer 344:

Wraparound mortgage

Question 344

Question 345:

What type of mortgage is also called a self-liquidating mortgage and is designed to pay off the entire balance at the end of the loan?

Answer 344

Answer 345:

Fully-amortized mortgage

Question 345

Question 346:

A mortgage that is a combination of fixed and adjustable. For example, 5/25 – is known as a __________________ mortgage?

Answer 345

Answer 346:

Hybrid Mortgage

Question 346

Question 347:

A written instrument used to convey title or transfer ownership?

Answer 346

Answer 347:

Deed

Question 347

Question 348:

The document that protects the homeowner against defects that occurred in the past, such as undisclosed liens, heirs, fraudulent documents, etc. is called ____________________?

Answer 347

Answer 348:

Title insurance

Question 348

Question 349:

A _________________ loan is a short-term cash out loan made on the equity in the applicant’s current property in order to allow them to close on the purchase of a new transaction.

Answer 348

Answer 349:

Bridge loan

Question 349

Question 350:

The area medium income (AMI) cannot exceed __________ in order to be approved for a USDA/Section 502 loan?

Answer 349

Answer 350:

115%

Question 350

Question 351:

What type of loan program provides 100% financing in rural or farm communities/areas?

Answer 350

Answer 351:

USDA Loans

Question 351

Question 352:
If a credit report doesn’t show the required minimum payment amount, the lender must use ___________________ for underwriting purposes?

Answer 351

Answer 352:

5% of the outstanding balance

Question 352

Question 353:

If a borrower rents a room for $1,500 a month, how much would the underwriter count as income?

Answer 352

Answer 353:

$1,125.00
$150,000 x 75% = $1,125

Question 353

Question 354:

If a borrower receives $1,500 a month child support income, how much would the underwriter count as income?

Answer 353

Answer 354:

$1,875.00
$1,500 x 1.25% = $1,875

Question 354

Question 355:

If a borrower receives $1,200 a month SSI income, how much would the underwriter count as income?

Answer 354

Answer 355:

$1,500.00
$1,200 x 1.25% = $1,500

Question 355

Question 356:

Calculate 3 points if the loan amount is $500,000 and the sales price is $525,000.

Answer 355

Answer 356:

$15,000
$500,000 x 3% = $15,000

Question 356

Question 357:

On a conventional loan where the borrower is making a down payment of $20,000, how much of the down payment must be from the borrower’s own funds?

Answer 356

Answer 357:
$1,000
5% of the down payment must be from the borrower’s own funds. $20,000 x 5% = $1,000

Question 357

Question 358:

An individual that meets the definition of a loan originator, but works for a bank is called a ___________________?

Answer 357

Answer 358:

Registered Loan Originator

Question 358

Question 359:

To be approved as a Loan Originator, a licensee must not have been found guilty of any felony in the past ____________ years.

Answer 358

Answer 359:

7 years

Question 359

Question 360:

The only exception to a person being granted a license if he/she has been found guilty of a felony in the past 7 years (or if the felony deals with money crimes) is if he/she has received a __________________.

Answer 359

Answer 360:

Pardon

Question 360

Question 361:

What are the three (3) protection options each state must have in place for loan originators?

Answer 360

Answer 361:

Minimum net worth, surety bond or reserve account

Question 361

Question 362:

What is the penalty for violating the Safe Act?

Answer 361

Answer 362:

$30,058 as of January 2022
previously $25,000

Question 362

Question 363:

When must the borrower receive the Initial Escrow Account Disclosure?

Answer 362

Answer 363:

Within 45 days after the closing date (if it was not received at closing)

Question 363

Question 364:

When must the borrower receive Affiliated Business Arrangement Disclosure (afba)?

Answer 363

Answer 364:

When the referral is made (immediately) if not then, prior to doc signing.

Question 364

Question 365:

When must the borrower receive the Privacy Policy Notice?

Answer 364

Answer 365:

At first contact, and thereafter, once a year as long as he/she remains a customer

Question 365

Question 366:

An applicant is purchasing a home for $100,000 utilizing FHA financing. The home appraises for $98,000. What is the minimum dollar amount that the borrower must contribute as a down payment on this transaction?

Answer 365

Answer 366:

$98,000 x 3.5%

Question 366

Question 367:

How long would an unpaid tax lien remain on a consumer’s credit report?

Answer 366

Answer 367:

Forever

Question 367

Question 368:

What is the penalty for knowingly violating the TRID rules?

Answer 367

Answer 368:

$1,000,000 per day

Question 368

Question 369:

What are the two agencies that created the NMLS System?

Answer 368

Answer 369:

AARMR and the CSBS
American Association of Residential Mortgage Regulators and the Conference of State Bank Supervisors

Question 369

Question 370:

Mary wants to obtain FHA insured financing on her primary home. Her housing expense will be $800.65. She also has the following debt: $192.65 (auto payment) and $40 (credit account). Based on her debt, what would be Mary’s required stable monthly income to qualify for this loan using the total debt-to-income ratio?

Answer 369

Answer 370:

$2,403.02.

You MUST know the ratios for FHA to do this problem. The back-end (total DTI) for FHA is 43%.

$800.65 + 192.65 + $40 = $1,033.30

$1,033.30/43% = $2,403.02

Question 370

Question 371:

For an ARM, an introductory rate that is lower than the fully indexed rate at the time of closing is called a _________ rate?

Answer 370

Answer 371:

Teaser Rate

Question 371

Question 372:

According to the TRID Rules, if the Closing Disclosure is mailed to the borrower, when is it considered received?

Answer 371

Answer 372:

Three (3) days after it was mailed/sent

Question 372

Question 373:

What is the formula for calculating the CLTV?

Answer 372

Answer 373:

1st Mortgage + 2nd Mortgage ÷ the sales price or appraised value (whichever is lower)

Question 373

Question 374:

What is the monthly PMI on a 90% LTV loan for a property valued at $500,000 if the monthly PMI factor is .60%?

Answer 373

Answer 374:

$225.00
$500,000 x 90% x .60% ÷ 12

Question 374

Question 375:

Harold is refinancing his home. The property appraised for $260,000, and Harold’s loan amount is $195,000. What is the Loan-to-value for this transaction?

Answer 374

Answer 375:

75%

Question 375

Question 376:

What is the penalty when a loan applicant makes a false statement on the 1003?

Answer 375

Answer 376:

May face a five-year jail term

Question 376

Question 377:

3/1, 5/1, 7/1 and 10/1 ARMs; these are examples of what types of mortgage?

Answer 376

Answer 377:

These are adjustable-rate mortgages, in which, rate is fixed for three year, five year, seven year and 10 year periods, respectively, but may adjust annually after that.

Also called Hybrid ARMS

Question 377

Question 378:

What is the official name for the 1003 form ?

Answer 377

Answer 378:

Form 1003 is also known as the Uniform Residential Loan Application (URLA).
Freddie Mac also uses the same application form and is known as the Freddie Mac Form 65.

Question 378

Question 379:

What is a 1031 Exchange?

Answer 378

Answer 379:

A tax deferred exchange of “like” real estate, used to offset or avoid capital gain tax.

Question 379

Question 380:

What is the name of the form that the IRS uses to retrieve past tax returns, W-2, and 1099 transcripts that are on file with the IRS?

Answer 379

Answer 380:

4506-T FORM

Question 380

Question 381:

What documents is a summary of recorded transactions, concerning a particular property?

Answer 380

Answer 381:

Abstract of Title

Question 381

Question 382:

What is the clause/condition in a mortgage that gives the lender the right to require immediate repayment of the loan balance if regular mortgage payments are not made or for breach of other conditions of the mortgage?

Answer 381

Answer 382:

Acceleration Clause

Question 382

Question 383:

Interest earned but not yet paid is called what?

Answer 382

Answer 383:

Accrued Interest

Question 383

Question 384:

What is included in Acquisition Costs?

Answer 383

Answer 384:

Purchase price, plus closing costs, minus seller credits.

Question 384

Question 385:

What type of mortgage, is a mortgage in which, the interest rate is adjusted periodically based on a pre-selected index?

Answer 384

Answer 385:

Adjustable Rate Mortgage (ARM)?

Question 385

Question 386:

An opinion of market value as of a specific date is known as what?

Answer 385

Answer 386:

Appraisal

Question 386

Question 387:

The date that the interest rate changes on an adjustable rate mortgage (ARM) is known as what?

Answer 386

Answer 387:

Adjustment Date

Question 387

Question 388:

The measurement of the full cost of a loan, including interest and loan fees, expressed as a yearly percentage rate is known as what?

Answer 387

Answer 388:

Annual Percentage Rate (APR)

Question 388

Question 389:

If there is greater than one percent (1%) ownership interest of a party in both the business referring out the service and the business receiving the referral, what document is required?

Answer 388

Answer 389:

Affiliated business arrangement (ABA)

Question 389

Question 390:

Loan payment, divided into equal periodic payments, calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance is known as what?

Answer 389

Answer 390:

Amortization

Question 390

Question 391:

What does the Consumer Reporting Agency (or Bureau) do?

Answer 390

Answer 391:
An organization that handles the preparation of reports used by lenders to determine a potential borrower’s credit history.
The agency gets data for these reports from a credit repository and other sources.
The Big 3: Experian, Equifax and Trans Union

Question 391

Question 392:

What is a Contingency?

Answer 391

Answer 392:

A condition that must be satisfied, before a contract is legally binding, before a sale can close.
Real estate sales contracts often have a specific date or number of days, in which, the contingencies must be removed.

Question 392

Question 394:

The “When Your Home Is In The Line” disclosure is required by which regulation?

Answer 392

Answer 394:

TILA – Regulation Z

Question 393

Question 394:

What is a Conventional Loan?

Answer 393

Answer 394:

A mortgage not insured by FHA or guaranteed by VA.

Question 394

Question 395:

When would a Conversion Clause/Option be used?

Answer 394

Answer 395:

A provision in an ARM allowing the loan to be converted to a fixed-rate at some point during the term. Usually, conversion is allowed at the end of the first adjustment period. The conversion feature may cost extra. Also referred to as a Convertible ARM

Question 395

Question 396:

What is a Conveyance?

Answer 395

Answer 396:

The transfer of a deed
Or possibly a lease or mortgage.

Question 396

Question 397:

Covenants, Conditions and Restrictions (CC&Rs) are what type of documents?

Answer 396

Answer 397:

A document defining the use,
requirements and restrictions of a property.

Question 397

Question 398:

What is a Credit Report?

Answer 397

Answer 398:

A report documenting the credit history and current status of a borrower’s credit standing.

Question 398

Question 399:

How long can a registered MLO, who is transferring from a depository institution, in order to become a state-licensed MLO originate mortgages, prior to completing the 20hr course?

Answer 398

Answer 399:

120 days
Transitional Authority

Question 399

Question 400:

What is a CRV?

Answer 399

Answer 400:

Certificate of Reasonable Value.
A property appraisal performed by a VA-approved appraiser that established the limit on the principal of the VA loan.

Question 400

Question 401:

When should an ARM disclosure be provided to a borrower?

Answer 400

Answer 401:

Some disclosures under TILA are specific to adjustable- rate mortgage loans (ARMs). Loan services must provide a borrower with an ARM at least 60 days’ notice before an interest rate change occurs if that change will result in a new payment

Question 401

Question 402:

Who receives the CHARM Handbook?

Answer 401

Answer 402:

The Consumer Handbook to Adjustable-Rate Mortgages (“CHARM” booklet) must be presented to the consumer within three days of applying for an ARM (adjustable rate mortgage) loan. (TILA)

Question 402

Question 403:

What is an Assessment?

Answer 402

Answer 403:

A local tax, levied against a property, for a specific purpose, such as: a sewer or street lights.

Question 403

Question 404:

The transfer of a mortgage from one person to another is known as what?

Answer 403

Answer 404:

Assignment

Question 404

Question 405:

A document showing the financial situation-assets, liabilities and net worth of a person at a specific point in time is known as what?

Answer 404

Answer 405:

balance sheet

Question 405

Question 406:

What is a Basis point?

Answer 405

Answer 406:

A unit of measure: 1/100th of one percent

For example, the difference between a 9.0 percent loan and a 9.5 percent loan is 50 basis points

Question 406

Question 407:

What is a Bi-weekly Payment Mortgage?

Answer 406

Answer 407:

A plan to reduce the debt every two weeks (instead of the standard monthly payment schedule). There are 26 bi-weekly payments a year

Question 407

Question 408:

What is a Blanket Mortgage?

Answer 407

Answer 408:

A mortgage that covers more than one parcel of land

Question 408

Question 409:

Bona fide is also known as what?

Answer 408

Answer 409:

“In good faith” - A “bona fide” offer, is an offer made in good faith.

Question 409

Question 410:

Who’s considered a Borrower (Mortgagor)?

Answer 409

Answer 410:

The borrower/mortgagor is the one who applies for and receives a loan, in the form of a mortgage, with the intention of repaying the loan in full.

Question 410

Question 411:

What are Caps (Payment)?

Answer 410

Answer 411:

Consumer safeguards, which limit the amount of change to the interest rate, for an adjustable rate mortgage

Question 411

Question 412:

Who receives a Certificate of Eligibility?

Answer 411

Answer 412:

The document given to qualified veterans, which entitles them to VA guaranteed loans for homes, business and mobile homes.

Question 412

Question 413:

What is a Certificate of occupancy?

Answer 412

Answer 413:

Document, issued by local government agency, stating that a property meets the requirements of health and building codes.

Question 413

Question 414:

What is a Certificate of Reasonable Value (CRV)?

Answer 413

Answer 414:

An appraisal issued by the Veterans Administration showing the property’s current market value

Question 414

Question 415:

What is the Chain of title?

Answer 414

Answer 415:

The chronological order of conveyance of a property, from the original owner to the present owner

Question 415

Question 416:

What is a Clear title?

Answer 415

Answer 416:

A marketable title, free of clouds and disputes

Question 416

Question 417:

COFI/Cost of Funds Index is used to calculate what?

Answer 416

Answer 417:

An index used to calculate the rate of an adjustable-rate mortgage.

The rate adjusts based on a cost-of-funds index often the 11th District Cost of Funds.

Question 417

Question 418:

What is Combined Loan-to-Value (CLTV)?

Answer 417

Answer 418:

The ratio of the total mortgage liens against the subject property, to the lesser of either the appraised value or the sales price

Question 418

Question 419:

Conforming Loans are what type of loans?

Answer 418

Answer 419:

A mortgage loan under the maximum amount of loans that FNMA (Fannie Mae) and FHLMC (Freddie Mac) are legally allowed to buy

Question 419

Question 420:

When are Construction Loans used?

Answer 419

Answer 420:

A short-term interim loan to pay for the construction of buildings or homes

Question 420

Question 421:

What is the name of the agency who is enforces laws that protect consumers of financial products and services such as mortgages, credit cards and deposit accounts?

Answer 420

Answer 421:

Consumer Financial Protection Bureau (CFPB)

Question 421

Question 422:

What is a Rate Lock?

Answer 421

Answer 422:

A commitment issued by a lender, to a borrower guaranteeing a specified interest rate and lender costs for a specified period of time

Question 422

Question 423:

The Real Estate Settlement Procedures Act (RESPA) protects who?

Answer 422

Answer 423:

A consumer protection law, which requires lenders to give borrowers advance notice of closing costs/settlement services.

Also known as Regulation X

Memory tool: REXPA

Question 423

Question 424:

What is Real Property?

Answer 423

Answer 424:

Land and everything, which is Permanently Affixed to it

Question 424

Question 425:

Reclamation is the right of which person?

Answer 424

Answer 425:

The right of the person, with title to a property, to recover it from the debtor in case of a bankruptcy

Question 425

Question 426:

Reconveyance transfers a property to whom?

Answer 425

Answer 426:

The transfer of property back to the owner when a mortgage is fully repaid

Question 426

Question 427:

What is a Recording?

Answer 426

Answer 427:

The act of entering documents concerning title to a property into public records

Question 427

Question 428:

Refinance/Refinancing a loan occurs when?

Answer 427

Answer 428:

Obtaining a new mortgage loan on a property, already owned, often to replace existing loans on the property

Question 428

Question 429:

Regulation B (ECOA) is also known as what?

Answer 428

Answer 429:

The equal Credit Opportunity Act.

Makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age public assistance program

Question 429

Question 430:

Regulation V (FCRA) regulates what?

Answer 429

Answer 430:

The Fair Credit Reporting Act.

The Fair Credit Reporting Act (FCRA) is a United States federal law that regulates the collection, dissemination, and use of consumer information, including consumer credit information.

Memory tool: V= Very Fair

Question 430

Question 431:

Regulation Z (TILA) was designed to promote what?

Answer 430

Answer 431:

The Truth in Lending Act

designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner

Memory Tool: TILA- TILA the GodZilla

Question 431

Question 432:

Rescission gives the homeowner the right to do what?

Answer 431

Answer 432:

The cancellation of a contract.

Question 432

Question 433:

What is a Reverse Annuity Mortgage (RAM)?

Answer 432

Answer 433:

A form mortgage, in which, the lender makes periodic payments to the borrower, using the borrower’s equity in the home as collateral for and repayment of the loan.

More commonly called a HECM (Home Equity Conversion Mortgage) or simply a Reverse Mortgage.

Question 433

Question 434:

What is a Reverse Mortgage (HECM)?

Answer 433

Answer 434:

HECM or Home Equity Conversion Mortgage

Reverse mortgages unlock the equity in the home.

Multiple payout options

For borrowers 62+

Question 434

Question 435:

The Safe Act (2008) was designed for what?

Answer 434

Answer 435:
Secure and Fair Enforcement for Mortgage Licensing Act

The S.A.F.E. Mortgage Licensing Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators.

Question 435

Question 436:

Who issues a Satisfaction of Mortgage?

Answer 435

Answer 436:

The document issued by the mortgage when the mortgage loan is paid in full.

Also called a “release of mortgage.”

Question 436

Question 437:

What is a Second Mortgage?

Answer 436

Answer 437:

A mortgage made subsequent to another mortgage and subordinate to the first one

Question 437

Question 438:

Who’s part of the Secondary Mortgage Market?

Answer 437

Answer 438:

The market, into which, primary mortgage lenders sell the mortgages they make to obtain funds to originate more new loans.

This includes investors such as Fannie Mae, Ginnie Mae and Freddie Mac.

Question 438

Question 439:

What is a Security?

Answer 438

Answer 439:

The property that will be pledged as collateral for a loan

Question 439

Question 440:

A Seller Carry Back is what type of agreement?

Answer 439

Answer 440:

An agreement in which the owner of a property provides financing often in combination with an assumable mortgage.

Question 440

Question 441:

Who is a Servicer?

Answer 440

Answer 441:

An organization that collects principal and interest payments from borrowers and manages the borrower’s escrow accounts

Question 441

Question 442:

What is Servicing?

Answer 441

Answer 442:

All the steps and operations a lender performs to keep a loan in good standing, such as collection of payments, payment of taxes, insurance, property inspections and the like.

Question 442

Question 443:

What are Settlement/Settlement Costs?

Answer 442

Answer 443:
Expenses over and above the price of the property that are incurred by buyers and sellers when transferring ownership of a property. Also called Closing Costs.

Closing costs normally include an originator fee, property taxes, charges for title insurance and escrow costs, appraisal fees, etc.

Closing costs will vary according to the area country and the lenders used.

Question 443

Question 444:

Who creates Sweat Equity?

Answer 443

Answer 444:

Equity created by a purchaser performing work on a property being purchased

Question 444

Question 445:

A Tax Lien is a claim against what?

Answer 444

Answer 445:

A claim against a property for unpaid taxes

Question 445

Question 446:

What is a Tax Sale?

Answer 445

Answer 446:

Public sale of property, by a government authority, as result of nonpayment of taxes

Question 446

Question 447:

A Title shows what?

Answer 446

Answer 447:

A document, which gives evidence of an individual’s ownership of property

Question 447

Question 448:

A Total Expense Ratio (back-end ratio/total debt ratio) includes what?

Answer 447

Answer 448:

Total obligations (PITI + all debt) divided by the gross monthly income – expressed as a percentage.

Question 448

Question 449:

What is the law that requires that the Annual Percentage be disclosed to a home buyer, shortly after they apply for the loan?

Answer 448

Answer 449:

TILA
Also known as Regulation Z.
Memory tool: TILA the GodZilla

Question 449

Question 450:

Evaluating a loan application package and making the decision, whether to make a loan to a potential home buyer, based on credit, employment, etc. is a process known as?

Answer 449

Answer 450:

Underwriting

Question 450

Question 451:

What federal legislation allows the borrower to challenge the value stated in an appraisal report?

Answer 450

Answer 451:

ECOA – Regulation B

Question 451

Question 452:

Pretexting is prohibited based on what law/regulation?

Answer 451

Answer 452:

GLBA

Question 452

Question 453:

Which regulation states that it is a violation to discriminate against a borrower who’s only income is social security benefits?

Answer 452

Answer 453:

ECOA

Question 453

Question 454:

What is a Deposit/Earnest Money Deposit?

Answer 453

Answer 454:

Cash paid when a formal sales contract is signed.

The deposit is usually held by a third party until the sale is complete.

Question 454

Question 455:

Depreciation happens when?

Answer 454

Answer 455:

When the value of property declines

Question 455

Question 456:

What are Discount Points?

Answer 455

Answer 456:

Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2000).

Question 456

Question 457:

What was the purpose of the Dodd-Frank Act?

Answer 456

Answer 457:

Purpose:
- To promote financial stability
- To end “too big to fail”
- To protect taxpayers by ending bailouts
- To protect consumers from abusive practices
Established the Consumer Financial Protection Bureau (CFPB)

Question 457

Question 458:

Which law requires notification to the borrower before the servicing of the loan is transferred to someone else?

Answer 457

Answer 458:

RESPA

Question 458

Question 459:

What’s an Encumbrance?

Answer 458

Answer 459:

A legal right or interest in a property that affects title and lessens the property value.

Encumbrances can take the form of claims, liens, unpaid taxes and so on.

Question 459

Question 460:

The value remaining in property after all liens and debts are considered is known as what?

Answer 459

Answer 460:

EQUITY

Question 460

Question 461:

What type of ARM allows the borrower to change from an adjustable rate mortgage to a fixed rate mortgage?

Answer 460

Answer 461:

CONVERTIBLE ARM

Question 461

Question 462:

The FACT Act (2003) was an amendment to what earlier law?

Answer 461

Answer 462:

• Fair and Accurate Credit Transactions Act amended Fair Credit Reporting Act (Reg V).
• The act allows consumers to request and obtain a free credit report one every twelve months from each of the three nationwide consumer credit reporting companies.
• The act also contains provisions to help reduce identity theft.

Question 462

Question 463:

A veteran’s entitlement for a VA loan is specified in what document?

Answer 462

Answer 463:

The Certificate of Eligibility (COE) is the document issued by the VA that specifies the amount of loan guarantee for which the veteran is eligible

Question 463

Question 464:

The APR on a Loan Estimate for a 30-year fixed-rate loan is 6.25% and the APR on the Closing Disclosure is 6.5%. After redisclosure, the borrower must wait ___________ to close the loan.

Answer 463

Answer 464:

THREE BUSINESS DAYS

Question 464

Question 465:

According to the GLB Act, an individual who obtains or has obtained a financial product or service from a financial institution is known as a what?

Answer 464

Answer 465:

CONSUMER

Question 465

Question 466:

If Martin sells his home five months after purchasing the property, the sale price must exceed Martin’s acquisition cost by more than _____ to require a second appraisal.

Answer 465

Answer 466:

20%
A seller who acquired a home within six months of resale and is selling the home for more than 20% of the original acquisition cost must have a second property appraisal performed on the property.

Question 466

Question 467:

What is the Federal Reserve?

Answer 466

Answer 467:
The central bank of the United States and major regulatory agency for many commercial banks.

Commonly referred to as “The Fed”.

Question 467

Question 468:

Fee simple is what type of ownership?

Answer 467

Answer 468:

Absolute ownership of real property

Question 468

Question 469:

What is a written agreement between lienholders on a property that changes the priority of mortgages, judgments, and other lien?

Answer 468

Answer 469:

A subordination agreement is a written agreement between lienholders on a property that changes the priority of mortgages, judgments, and other liens.

Question 469

Question 470:

What is a First Mortgage?

Answer 469

Answer 470:

The primary lien against a property

Question 470

Question 471:

A Fixed Rate (Mortgage) has what type of interest rate?

Answer 470

Answer 471:

An interest rate is fixed for the term of the loan

Question 471

Question 472:

Flood Insurance is what type of insurance?

Answer 471

Answer 472:

A form of hazard insurance required by lenders to cover properties in flood zones

Question 472

Question 473:

What is FNMA?

Answer 472

Answer 473:

• The Federal National Mortgage Association is a secondary mortgage institution.
• FNMA buys VA, FHA and conventional mortgages from primary lenders.
• Also known as “Fannie Mae.”

Question 473

Question 474:

What is Forbearance?

Answer 473

Answer 474:

Grace period given when a lender postpones foreclosure, to give the borrower time to catch up on overdue payments.

Question 474

Question 475:

Foreclosure is known as?

Answer 474

Answer 475:

A legal process, by which, the lender or the seller forces a sale of a mortgaged property, because the borrower has not met the terms of the mortgage.

Also known as a repossession of property.

Question 475

Question 476:

Freddie Mac is a nickname for who?

Answer 475

Answer 476:

The nickname most commonly used for the Federal Home Loan Mortgage Corporation

Question 476

Question 477:

A Fully Amortized ARM is what type of rate?

Answer 476

Answer 477:

An adjustable rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance at the interest accrual rate over the amortization term.

Question 477

Question 478:

Ginnie Mae (GNMA) is also known as what?

Answer 477

Answer 478:

The nickname most commonly used for the Government National Mortgage Association

Question 478

Question 479:

Government National Mortgage Association (GNMA) is also known as what?

Answer 478

Answer 479:

Also known as “Ginnie Mae.”
Provides sources of funds for residential mortgages insured or guaranteed by FHA or VA.

Question 479

Question 480:

A type of flexible payment mortgage, where the payments increase for a specified period of time and then level off is known as __________________.

Answer 479

Answer 480:

A Graduated Payment Mortgage (GPM)

Question 480

Question 481:

Usury is interest charged when?

Answer 480

Answer 481:

Interest charged in excess of the legal rate established by law

Question 481

Question 482:

What is a Variable Rate Mortgage (VRM)?

Answer 481

Answer 482:

Another name for an Adjustable Rate Mortgage (ARM)

Question 482

Question 483:

A document, signed by the borrower’s financial institution (BANK), verifying the status and balance of his/her financial accounts is known as what?

Answer 482

Answer 483:

A Verification of Deposit (VOD)

Question 483

Question 484:

A document, signed by the borrower’s employer, verifying his/her position, salary overtime, bonuses and the likelihood of continued employment is known as what?

Answer 483

Answer 484:

A Verification of Employment (VOE)

Question 484

Question 485:

A document, signed by the borrower’s servicer, verifying the status of the mortgage is called what?

Answer 484

Answer 485:

A Verification of Mortgage (VOM)

Question 485

Question 486:

A document, signed by the borrower’s landlord, verifying their rental/lease payment history is called what?

Answer 485

Answer 486:

A Verification of Rent (VOR) is signed by who?

Question 486

Question 487:

A Margin is added to what to determine the fully-indexed rate?

Answer 486

Answer 487:

The amount a lender adds to the index on an adjustable rate mortgage to establish the fully-indexed rate.

The margin is the lender’s profit.

Index + Margin = adjusted interest rate.

Question 487

Question 488:

What is a Marketable Title?

Answer 487

Answer 488:

A title which is free and clear of liens, clouds or other defects, which would prevent the sale of the property.

Question 488

Question 489:

A Mechanic’s Lien is used when?

Answer 488

Answer 489:

A mechanic’s lien is a security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property.

The lien exists for both real property and personal property.

It is considered a cloud on title.

Question 489

Question 490:

MIP (Mortgage Insurance Premium) is purchased by whom?

Answer 489

Answer 490:

Insurance from FHA, to the lender, against incurring a loss, if the borrowers were to default.

Insurance purchased by borrower to insure against default on an FHA loans.

MIP protects the LENDER

Question 490

Question 491:

A Monthly Housing Expense includes what?

Answer 490

Answer 491:

Total monthly expense of principal, interest, taxes, hazard insurance and mortgage insurance (PITI).

It also includes any HOA (Home Owners Association) dues. (PITIA)

Question 491

Question 492:

What is a Mortgage?

Answer 491

Answer 492:

A legal document, which pledges a property to the lender as security for payment of a debt

Question 492

Question 493:

The Mortgage Disclosure Improvement Act (MDIA) 2008 amended what?

Answer 492

Answer 493:

• An amendment to Reg. Z.
• Requires disclosures (LE) to be sent to the borrower within three (3) business days after receiving borrowers’ application.
• The loan may not close until after the seventh (7th) business day after disclosures have been delivered or mailed to the borrower.

Question 493

Question 494:

Who is a Mortgagee?

Answer 493

Answer 494:

The lender in a mortgage loan transaction

Question 494

Question 495:

What is Private Mortgage Insurance?

Answer 494

Answer 495:

Money paid to insure the mortgage when the down payment is less than 20 percent

Question 495

Question 496:

Who is a Mortgagor?

Answer 495

Answer 496:

The borrower or homeowner.

Question 496

Question 497:

What is Negative Amortization?

Answer 496

Answer 497:

• When your monthly payments are not large enough to pay all the interest due on the loan.
• This unpaid interest is added to the unpaid balance of the loan.
• If the borrower does not increase payments, the home buyer will end up owing more than the original amount of the loan.

Question 497

Question 498:

A Non-Conforming Loan cannot be sold to who?

Answer 497

Answer 498:

• A conventional loan that cannot be sold to Fannie and Freddie Mac.
• Often, these loans are larger than the conforming loan amount.

Question 498

Question 499:

A Notice of Default (NOD) is given to who?

Answer 498

Answer 499:

Written notice to a borrower, that a default has occurred, and that legal action may be taken.

Question 499

Question 500:

What is the Office of Comptroller Currency?

Answer 499

Answer 500:

The federal financial regulatory body, which oversees the nation’s federally chartered banks and savings institutions.