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Mortgage > Mlo Exam > Flashcards

Mlo Exam Flashcards

0
Q

Federal law prohibiting discrimination in granting credit to people based on sex, age, marital status, race, color, religion, national origin, or receipt of public assistance. Also called Regulation B.

A

ECOA

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1
Q

Application

A

The submission of a borrower‘s financial information in anticipation of a credit decision relating to a federally related mortgage loan which includes the borrower‘s name, monthly income, social security number to obtain a credit report, the property address and estimate of value, the loan amount.

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2
Q

Federal law dealing with granting of credit, access to credit information, rights of debtors, and responsibilities of creditors. Also called Regulation V.

A

FCRA

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3
Q

Federal law requiring institutional lenders with assets in excess of $10 million to file an annual report of all loans made during that year. Also called Regulation C.

A

HMDA

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4
Q

Part of Regulation Z Truth in Lending Act establishing disclosure requirements and prohibiting equity stripping and other abusive practices associated with high cost loans. Also called Section 32.

A

HOEPA

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5
Q

Required under RESPA; details a complete disclosure of all costs associated with a closing, showing what was paid, to whom, and for what. required to be given AT settlement.

A

HUD 1

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6
Q

RESPA

A

Federal law dealing with real estate closings; sets specific procedures and guidelines for disclosure of settlement costs. Lets homebuyers compare costs of services, requires specific statements/disclosures, prevents kickbacks, and limits escrows. Also known as Regulation X.

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7
Q

Conforming loan

A

Loans that meet Fannie Mae/Freddie Mac standards and which can be sold on the secondary market

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8
Q

Conventional loan

A

Loans not insured or guaranteed by a government entity.

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9
Q

LTV

A

The amount of money borrowed compared to the value or price of the property. Use appraisal or sale price, the lower one.

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10
Q

2-1 Buydown

A

A graduated payment buydown where the payments are subsidized for only two years, for example 2% the first year and 1.5% the second year.

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11
Q

3-2-1 Buydown

A

A graduated payment buydown where the payments are subsidized for three years, for example, 3% the first year, 2.5% the second year, and 2% the third year.

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12
Q

ARM Caps

A

Caps on interest rates and mortgage payments keep ARMs from growing out of control. If the ARM has a 2/6 cap (maximum 2% increase at any adjustment with a lifetime cap of 6% above the initial rate).

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13
Q

ARM Rate

A

Index Rate + Margin = Fully Indexed ARM Interest Rate

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14
Q

Housing Expense Ratio

A

A borrower’s housing expense ratio is the relationship of the borrower’s total monthly housing expense (principal, interest, taxes, and insurances) to gross monthly income, expressed as a percentage.
Total Housing Expense (PITI) ÷ Income = Ratio %

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15
Q

Debt to Income Ratio

A

A borrower’s total debt service ratio is the relationship of the borrower’s total monthly debt obligations (including housing and long-term debts with more than ten payments left) to gross monthly income, expressed as a percentage.
Total Debt to Income (PITI + all recurring monthly debts) ÷ Income = Ratio %

16
Q

CLTV

A

The CLTV, sometimes called total loan-to-value (TLTV), is calculated by adding all loan amounts and dividing by the home’s appraised value or purchase price, whichever is lower.

17
Q

Blockbusting

A

The illegal practice of inducing owners to sell their homes (often at a deflated price) by suggesting that the ethnic or racial composition of the neighborhood is changing, with implication that property values will decline as a result. Also called panic selling.

18
Q

Fraud, Constructive

A

A negligent misrepresentation or concealment of a material fact; when a person carelessly fails to disclose material information, or makes false or misleading statements. Also called Negligent Misrepresentation.

19
Q

Fraud, Actual

A

Intentional misrepresentation or concealment of a material fact; when a person actively conceals material information or makes statements known to be false or misleading. Also called Deceit.

20
Q

Redlining

A

When a lender refuses to make loans secured by property in a certain neighborhood because of the racial or ethnic composition of the neighborhood.

21
Q

Steering

A

Illegal activity of channeling prospective buyers or tenants to particular neighborhoods based on their race, religion, national origin, or ancestry.

22
Q

Includes APR, finance charges, amount financed, total of payments, mandatory statement.

A

TILA Statement

23
Q

Sect 35 loans. Where the APR exceeds the average prime offer rate by at least 1.5% on first liens. 3.5% on junior liens.

A

Higher priced loans as defined by TILA

24
Q

High Cost Loans

A

Trigger #1: APR is greater than 6.5% on 1st loans less than 50k.8.5% on 2nd.

Trigger #2: points and fees are greater than $625 or 5% of total transaction.

25
Q

Dodd Frank Wall Street Reform Act 2010

A

Title X, designated as the Consumer Financial Protection Act, and Title XIV, designated as the Mortgage Reform and Anti-Predatory Lending Act.

26
Q

Do not call registry

A

Prohibits calls after 31 days of request
16k fine per incident
Can call up to 18 months since last purchase
Can call up to 3 months after consumer submits app/inquiry

27
Q

FHA loans up to $729,750 have annual mortgage insurance is what percentage of loan?

A
  1. 2% if down payment is greater than 5%.

1. 25% if down payment is less than 5%.

28
Q

When can loan origination fee be imposed?

A

3 business days after mailing disclosures

29
Q

HMDA

A

Reg C. Requires that race origin be marked on app to ensure lenders are meeting the needs of their communities.

30
Q

Gram Leach Biley Act

A
  1. Financial privacy rule
  2. Safeguards rule
    Pretexting rule
31
Q

FHA

A

Insured by govt. no prepay penalty. Prim res for 12 months min.

32
Q

Housing expense ratio and debt to income ratio

A

Convention loans 28% and 36%
FHA 31% and 43%
VA 41% DTI.

33
Q

What is the UFMIP percentage on all FHA loans?

A

1.75%

34
Q

Disclosures required within 3 business days of app

A

RESPA.

  1. Special information Booklet
  2. GFE settlement costs
  3. MSDS servicing

TILA
1. TIL statement
2. Charm for arms
3 when your house is in the line ( heloc)

35
Q

RESPA disclosures

A 
3 days
HUD settlement costs book, GFE, MSDS
Before settlement 
AfBA charges, HUD 1 (if requested by client)
At Settlement 
HUD and Escrow settlement statement
After settlement
Annual escrow statement, service trans statement

Mortgage (1 decks)

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