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Mortgage Loan Originator > MLO Test Prep > Flashcards

MLO Test Prep Flashcards

1
Q

What would not appear on page 5 of the closing document?

A

DISCOUNT POINTS

page 5 contains TIP, finance charges, APR, total # of payments, disclosures

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2
Q

What is mortgage insurance on $250,000 with a multiplier of 0.65%?

A

$135.42

$250,000 x .0065 = $1625, $1625 / 12 = $135.42

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3
Q

When did the Homeowner’s Protection Act go into effect? (Before this, the government didn’t regulate PMI)

A

JULY 1999

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4
Q

HMDA

A

Home Mortgage Disclosure Act
Regulation C
Sex, ethnicity, and race are collected

Section X of the 1003
Lenders are required to submit loan/application registers by March 1st of each year for HMDA reports.

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5
Q

TILA

A

Truth in Lending Act
Regulation Z

Section 32 - HOEPA, Home Ownership and Equity Protection Act. requires that all federally-related loan applicants receive a list of housing counselors that must be sent 3 business days after receiving the application. Also, late fees cannot exceed 4% of the past due payments and it prohibits the pyramiding of late fees.
Section 35 - HPMLs, Higher-Priced Mortgage Loans

Requires CHARM for Arms
TILA doesn’t apply to a larger than 4-unit property.
Deals with advertising

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6
Q

RESPA

A

Regulation X

Applies to all residential real estate loans. Excludes vacant land, 25 acres or more, commercial or business loans, the government, temporary financing (bridge)
Section 8 = no fees or kickbacks for referrals
Requires a copy of appraisal be given to the applicant promptly upon completion or at least 3 business days before the consummation of the transaction.
Requires the Mortgage Servicing Disclosure Statement

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7
Q

ECOA

A

Equal Credit Opportunity Act
Regulation B

Prohibits asking a borrower’s childbearing intentions.
Requires to notify borrower of approval or denial within 30 days of completed application.
Requires Adverse Action Notice to disclose the reasons for denial or allow the borrower 60 days to request that information.
Gives consumer the right to receive a copy of the appraisal report on a dwelling that is to be used as collateral for a loan.

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8
Q

Mortgage late payments-how many months, and how many days for conventional

A

Late payments on a mortgage in the last 12 months can kill a deal. For conventional, if a borrower is 60 or more days late within 12 months, the UW will deny the loan.

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9
Q

How far back does an underwriter look at a borrower’s credit INQUIRIES?

A

90 days

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10
Q

What is considered a business day in regards to the Loan Estimate?

A

a business day is a day on which the lender’s offices are open to the public.

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11
Q

What do acquisition costs include?

A

Sales price + buyer’s closing costs - closing costs the seller pays.

DO NOT go off of the loan amount for this calculation.

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12
Q

How many years must closing disclosures be kept?

A

5 years

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13
Q

Who regulates the Do Not Call List?

A

The FTC (Federal Trade Commission)

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14
Q

What is not included in the APR?

A

Appraisal Fee

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15
Q

How many years in the past much appraisers analyze the transfer history of the property?

A

3 years.
Appraisers analyze the purchase contract, current listing, and recent prior sales for the past 3 years. They also research the subject’s transfers from 3 years prior to the effective date of the appraisal.

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16
Q

What type of mortgage is a wrap around mortgage?

A

A second mortgage.

The lender assumes payments on the borrower’s low interest 1st mortgage and lends additional funds.

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17
Q

FHA

A

Fair Housing Act

Prohibits discrimination of race, color, religion, handicap, sex, familial status or national origin.

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18
Q

What tolerance fee does Title Insurance fall under?

A

10% cumulative tolerance fee

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19
Q

What tolerance fee do Origination, Underwriting and Processing fees fall under?

A

zero-tolerance fee

These are all compensation to the lender

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20
Q

The Real Estate Settlement Procedures Act falls under the control of what agency?
What type of property does it not apply to?

A

CFPB (Consumer Financial Protection Bureau)

Doesn’t apply to property > 25 acres, vacant land, commercial or business loans, the government, temporary financing like bridge loans.

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21
Q

GSE

A

Government Sponsored Entity

Fannie Mae and Freddie Mac

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22
Q

Minimum down payment on a conventional loan.

A

3%

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23
Q

Which market buys closed mortgage loans?

A

SECONDARY MARKET

purchases mortgage backed securities and servicing rights after the loan has been closed.

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24
Q

TRID

A

TILA-RESPA Integrated Disclosure Rule

Requires disclosure of all fees including discount points on the LE and CD.
Regulates the fees that can be rounded on the LE.

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25
Q

VOR

A

Verification of Rent

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26
Q

Who sets the margin on an ARM?

A

THE LENDER

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27
Q

Where do funds for an FHA come from?

A

approved FHA lenders

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28
Q

What government agency guarantees VA loans?

A

The Department of Veterans Affairs

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29
Q

What % of business ownership requires a borrower to submit personal and business tax returns?

A

25% or more

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30
Q

If a borrower is not allowed to shop for a service and not allowed to pick from a list of settlement service providers, what type of fee tolerance is this?

A

Zero-tolerance fee

cannot change from the LE to the CD

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31
Q

How many months/years is considered a long term debt?

A

12 months

32
Q

Consummation definition

A

The date a consumer becomes contractually obligated to the creditor on the loan (the day they sign the note)

33
Q

When does the title company issue on the subject property at time of closing?

A

Mortgagee Title Policy

34
Q

Business income derived from a sole proprietorship is calculated on what tax form?

A

Schedule C

35
Q

Second job income is always considered what type of income?

A

Variable income

36
Q

What type of bankruptcy liquidates debts?

A

CHAPTER 7

37
Q

What type of fraud occurs when a borrower fails to disclose a liability they have?

A

LIABILITY FRAUD

38
Q

GLBA requires FI’s to provide consumer with a Consumer Privacy Policy how often?

A

ANNUALLY

39
Q

If something changes after consummation, how long does lender have to present a corrected CD?
What about for non-numerical clerical errors and document refunds for tolerance violations?

A

30 DAYS

60 DAYS for non-numerical

40
Q

When can fees be charged?

A

If they are disclosed before they can be collected on the LE. This includes the appraisal fee.

41
Q

What type of appraisal has a value listed with no repairs included?

A

An “AS IS” appraisal

42
Q

How many comparables are required on an appraisal?

A

THREE

43
Q 
SAFE Act requires how many hours of:
federal law
ethics
mortgage products
elective
A

3 federal laws
3 ethics
2 nontraditional mortgage products
remaining are electives

44
Q

How many days does a lender have to notify an applicant of action on request for credit, whether favorable or adverse?

A

30 days, required by ECOA

45
Q

What are the three fee tolerances?

A

ZERO
10% cumulative
no-tolerance

46
Q

FCRA

A

Fair Credit Reporting Act

47
Q

FNMA

A

Fannie Mae

underwrites with desktop underwriter

48
Q

FHLMC

A

Freddie Mac

Underwrites with loan product advisor

49
Q

Form 1004MC

A

Market Conditions Addendum

designed to enhance the transparency of the market trends and conditions conclusions made by the appraiser.

50
Q

Fine for calling National Do Not Call Registry

A

$43,280

51
Q

FHA - when can a borrower repurchase after a foreclosure?

A

3 years

52
Q

Conventional - when can a borrower repurchase after a foreclosure?

A

7 years

53
Q

FHA - when can a borrower repurchase after a short sale?

A

3 years from the date of the short sale, or if the prior mortgage was also an FHA insured loan, from the date that FHA paid the claim on the short sale.

54
Q

Form 1008

A

Uniform Underwriting and Transmittal Summary

it summarizes key data from the loan application package

55
Q

Conventional - when can a borrower repurchase after a Chapter 7 bankruptcy?

A

4 years

56
Q

FACTA

A

requires a dispute on credit to be resolved within 30 days after the dispute was received.

57
Q

VA - when can a borrower repurchase after chapter 7?

What about a chapter 13?

A

2 years from discharge date

1 year for chapter 13

58
Q

When must the final LE be received?

A

no later than four days before closing.

59
Q

SAFE acronym

A

Secure and Fair Enforcement for Mortgage Licensing Act

60
Q

FHA - when can a borrower repurchase after a chapter 13?

A

1 year

61
Q

FORM 4506-T

A

sent to IRS to confirm the numbers on the tax returns are the same

62
Q

What % of the loan amount do discount points generally cost?

A

1%

63
Q

YSPs are paid to the broker for what?

A

Giving a borrower a higher interest rate on a loan in exchange for lower up-front costs generally paid in origination fees, broker fees or discount points.

64
Q

How long is the LE good for if the consumer does not expressly provide their Intent to Proceed?

A

10 business days

65
Q

How many days is the “cooling off” period under HOEPA

A

3 days prior to closing

66
Q

Conventional - when can a borrower repurchase after a short sale?

A

4 years

67
Q

What is not a finance charge in a residential mortgage loan?

A

An appraisal fee

68
Q

Loan >$50,000 fails HOEPA APR test if APR is what % for 1st lien?

A

6.5%

69
Q

What is down payment for FHA?

A

3.5%

70
Q

Bankruptcy 7 vs 13?

A

7 - liquidates debtor’s debts

13 - allows debtor to pay back lenders through court payment program

71
Q

How do you calculate fully indexed rate for ARMs?

A

Index + margin

72
Q

QM, acronym and 4 requirements

A

Quality Mortgage

1 general
2 temporary
3 small lender
4 balloon

73
Q

What is the only fee ok to collect prior to LE?

A

credit report fee

74
Q

HOEPA late fees can’t exceed what %?

A

4%

75
Q

What act requires Equal Housing Opportunity logo on ads?

A

Fair Housing Act

76
Q

Escrow. Servicer can charge borrowers _ monthly sum of escrow payments, servicer can cushion no more than _ of total annual payment.

A

1/2, 1/6

Mortgage Loan Originator (1 decks)

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