MLO Test Ready Flashcards

Question

The purpose of the Homeowners Protection Act is to…

Answer 1

Facilitate the cancellation of private mortgage insurance (PMI). Borrowers can request cancellation when their loan reaches 80% loan-to-value (20% equity), but the law requires automatic termination of PMI at 78% LTV (22% equity).

Answer 2

Amount or percentage of any down payment Number of payments or period of repayment Amount of any payment Amount of any finance charge

Answer 3

Amount and percentage of the down payment Terms of repayment, such as inclusion of a balloon payment Annual percentage rate

Answer 4

HELOCs Reverse mortgages Mortgages secured by a mobile home or dwelling not attached to real property

Answer 5

One or both settlement service providers fail to perform enough work to earn the fee.

Answer 6

An advertising trigger term under Regulation Z. TILA/Regulation Z requires additional information to be provided in an advertisement that contains trigger terms. Most commonly, APR must be provided if the advertisement includes the note rate.

Answer 7

Is the regulation that issues the rules for the Equal Credit Opportunity Act.

Answer 8

Business or agricultural credit Credit in excess of $25,000, unless it is secured by a dwelling/real property Public utility credit Student loans Home fuel budget plans

Answer 9

He/she is permitted to request cancellation of PMI (private mortgage insurance). The Homeowners Protection Act sets the requirements for cancellation of PMI. It is at the lender’s discretion to permit the cancellation at 80% LTV – the borrower must be current on payments.

Answer 10

Financial institutions to verify the identity of a person applying for a loan, maintain a record of the information used for verification, and determine whether a potential borrower appears on known terrorist lists.

Answer 11

Information derived from a credit report or provided with respect to loan application. Examples might include loan balances, account numbers, unlisted phone numbers, etc. Nonpublic personal information is protected by the provisions of the Gramm-Leach-Bliley Act.

Answer 12

Borrower credit – an amount paid to a mortgage loan originator by a lender for locking a loan in at an interest rate above the par rate – must be disclosed on the Loan Estimate and Closing Disclosure. Updated versions of the forms are intended to make disclosure of borrower credit clearer to borrowers.

Answer 13

An aggregate escrow analysis (Annual Escrow Statement) is provided to borrowers annually, pursuant to Section 10 of RESPA. Its purpose is to prevent escrow overages. According to Section 10, the cushion of funds maintained in the escrow account cannot exceed one sixth (two months) of the annual cost of taxes and insurance.

Answer 14

Is the regulation that issues the rules for the Real Estate Settlement Procedures Act.

Answer 15

APR must be initially disclosed within three business days of application.

Answer 16

The transaction can proceed to closing after seven business days have elapsed from issuance of the initial Loan Estimate.

Answer 17

Race Color Religion National origin Sex Marital status Age Receipt of income from a public assistance program Exercise of rights under the Consumer Credit Protection Act, including the Truth-in-Lending Act

Answer 18

The Home Mortgage Disclosure Act is a reporting law that helps the federal government identify discriminatory lending practices. It also ensures that depository institutions are meeting the needs of their communities. HMDA requires mortgage professionals to report information about loan transactions and demographics (race, sex, etc.) of applicants.

Answer 19

Any one of them may exercise the right to terminate the transaction. Under TILA/Regulation Z, an individual has rescission rights when he/she has an ownership interest in the property. The individual does not necessarily have to be a party to the loan transaction.

Answer 20

If a floating rate is locked.

Answer 21

Any day on which the creditor's offices are open to the public for carrying out substantially all business functions.

Answer 22

Required under Section 6 of RESPA, the Servicing Transfer Statement advises a borrower when their loan has been transferred to another servicer. It must be provided 15 days prior to the servicing transfer. The new servicer must also provide notice within 15 days after the transfer and may not assess late fees for a period of 60 days following the transfer.

Answer 23

Within three business days of receiving information prompting the change and at least four business days prior to consummation.

Answer 24

The borrower’s dwelling secures the mortgage debt The homeowner uses the proceeds of the loan for personal, family, or household purposes

Answer 25

Inquiries about protected characteristics Discouraging applicants from applying for a loan Refusing to consider public assistance, alimony/child support, or pension/retirement benefits as income Assumptions, inquiries, or credit decisions based on childbearing or child-rearing plans

Answer 26

Private mortgage insurance is required by conventional lenders when a borrower makes a down payment of less than 20% (or has less than 20% equity). It is governed by the Homeowners Protection Act and must be discontinued when the loan reaches 78% loan-to-value (22% equity), assuming the borrower has met the terms of the agreement to that point.

Answer 27

The USA PATRIOT Act. The Act requires financial institutions to verify the identity of persons involved in financial transactions, as a counter-terrorism measure.

Answer 28

Is the regulation that issues the rules for the Truth-in-Lending Act.

Answer 29

It is a disclosure providing notice of the right to rescind certain lending transactions. It is due at closing for refinances and other types of home equity loans, such as HELOCs. Two copies must be provided to each person with ownership interest in the property.

Answer 30

It is included on the Loan Estimate, which is due within three business days following application. If the loan application is for a reverse mortgage, open end mortgage or for a temporary loan, the disclosure is due within 3 business days following a loan application.

Answer 31

Only one copy is required for multiple borrowers The booklet can be reproduced in any form The booklet can be translated into other languages The booklet can be stamped with a business/mortgage professional’s name The booklet cannot be made part of other, larger documents

Answer 32

The annual percentage rate is the cost of credit expressed as a percentage. It includes the interest on the loan as well as any finance charges. It must be disclosed to a consumer within three business days of loan application, along with the finance charge, and must be accurate within one eighth of 1%.

Answer 33

Loans for: Business, commercial, or agricultural purposes Temporary financing (bridge loans) Vacant land Loan conversions

Answer 34

No later than three business days prior to consummation.

Answer 35

Violators of ECOA can face civil penalties of $5,000 per day. A pattern of misconduct can result in civil penalties of $25,000. Punitive damages can result in fines of up to $10,000 in individual actions or the lesser of $500,000 or 1% of the violator’s net worth.

Answer 36

The Fair Credit Reporting Act (FCRA) is aimed at ensuring the accuracy, fairness, and privacy of consumers’ personal information that is assembled and used by consumer reporting agencies.

Answer 37

At the same time as the Initial Privacy Notice - i.e., when a customer relationship is established. The Gramm-Leach-Bliley Act requires financial institutions (including mortgage brokers) to provide an Opt-Out Notice with a method for customers to opt out of the sharing of their personal information.

Answer 38

Indefinitely. Amendments to the Telemarketing Sales Act in 2007 permit consumers to place their telephone numbers on the Registry indefinitely.

Answer 39

At or before consummation.

Answer 40

The new servicer cannot assess late fees for a period of 60 days.

Answer 41

The finance charge is the cost of credit expressed as a dollar amount. Finance charges include interest and other fees paid in conjunction with the loan transaction, such as broker fees and points. It must be disclosed to a consumer within three business days of loan application, along with the APR, and must not be understated by more than $100

Answer 42

Anyone with an ownership interest in the property.

Answer 43

Must be taken by consumers within five years of a violation. An exception exists in that if an Attorney General initiates action, the aggrieved consumer may take action within one year of the initiation of proceedings.

Answer 44

The Fair and Accurate Credit Transactions Act (FACTA) was passed as an amendment to the FCRA. It includes provisions to address identity theft, facilitate consumers’ access to the information retained by CRAs, and improve the accuracy of consumer reports.

Answer 45

Loan Estimate

Answer 46

A change in the APR A change in the loan product Addition of a prepayment penalty

Answer 47

Are prohibited

Answer 48

To promote the availability of credit to all creditworthy applicants, regardless of their race, color, religion, national origin, sex, marital status, or age. It also prohibits discrimination against credit applicants based on receipt of public assistance or participation in credit counseling programs (exercise of rights under the Consumer Credit Protection Act).

Answer 49

Charges to record the mortgage Transfer tax Other charges established by the state or municipality

Answer 50

Under RESPA, “things of value” are any payment, advance, loan, or service, including: money, discounts, commissions, salaries, stock, opportunities to participate in a money-making program, special banking terms, tickets to theatre or sporting events, services at special rates, and trips at another’s expense. Things of value are illegal when they are provided in exchange for referrals.

Answer 51

A violation of RESPA/Regulation X. Referral fees are considered unearned fees under RESPA. Any “thing of value” (money, gifts, discounts, etc.) given in exchange for a business referral is illegal under Section 8 of RESPA.

Answer 52

For refinances and other home equity loans, such as HELOCs. The loan must be secured by the borrower’s principal residence. The right to rescind the loan generally must be exercised within three business days of closing.

Answer 53

Under ECOA, loan applicants must be advised of the status of their application within 30 days of application. If their application is turned down, they must receive a Notice of Adverse Action advising them of the reason for denial as well as a number of other rights.

Answer 54

Yield spread premiums were fees paid by a lender to a mortgage loan originator for originating a loan at a rate higher than the par rate. It was intended to provide a resource for originators to subsidize borrower closing costs. Now referred to as borrower credit, these fees are applied to the costs of closing, to benefit the borrower.

Answer 55

The lender must return any money or property paid by the borrower in connection with the loan. This might include broker fees, application fees, and third-party settlement fees.

Answer 56

Total of payments Finance charge Amount financed APR Total interest percentage Other disclosures (appraisal, contract details, liability after foreclosure, refinance, tax deductions) Questions? box Contact information Confirm receipt box (signature of borrower[s])

Answer 57

Fines of up to $10,000 and one year in prison. Accepting a fee in exchange for a referral is a violation of RESPA/Regulation X.

Answer 58

The Truth-in-Lending Act is a consumer protection law aimed at providing consumers with disclosure of the cost and terms of credit. It also ensures that advertisements are truthful and allows borrowers to rescind (cancel) certain types of transactions.

Answer 59

The Do-Not-Call Implementation Act was passed under the Telemarketing Consumer Fraud and Abuse Prevention Act/Telemarketing Sales Rule. It is a consumer protection law that permits consumers to restrict unwanted sales calls to their homes.

Answer 60

“Your Home Loan Toolkit: A Step-by-Step Guide” provides information on the settlement process, explains consumer rights under RESPA, and warns against the use of false information on the loan application. It applies to purchase transactions only and is due within three business days of application.

Answer 61

The Red Flags Rule was created by the Federal Trade Commission under FACTA. The purpose is to address identity theft by focusing on methods of detecting a security breach.

Answer 62

“Calculating Cash to Close” table Summaries of transactions

Answer 63

The Gramm-Leach-Bliley Act does not include any specific penalties, but authorizes regulating agencies to bring enforcement actions and impose penalties. The FTC can bring action against mortgage brokers under the Federal Trade Commission Act. This Act provides for penalties of up to $10,000.

Answer 64

Loan Costs table Other Costs table Calculating Cash to Close table Adjustable Payment table Adjustable Interest Rate table

Answer 65

The Affiliated Business Arrangement Disclosure. Required by RESPA, it advises loan applicants that an affiliated business arrangement exists and lets them know that they are not required to use the referred entity.

Answer 66

Creditors to create a policy to identify and mitigate the risks of identity theft. The Red Flags Rule was created by the FTC pursuant to FACTA.

Answer 67

TILA does not address penalty amounts for open-end mortgage loans. For closed-end loans secured by a dwelling, the civil penalty is at least $400 and up to $4,000. The criminal penalty includes a fine of up to $5,000, imprisonment for up to one year, or both.

Answer 68

Federally-regulated mortgage loans. This includes first and second liens and is such a broad definition that RESPA applies to virtually all residential mortgages secured by real property.

Answer 69

Title insurance and title examination fees, doc prep fees, notary fees, seller’s points, and appraisal/credit report fees (if they are charged to all applicants as part of loan application).

Answer 70

Under ECOA, loan applicants who have been turned down (adverse action) have the right to receive a copy of their appraisal report. They must be provided with disclosure of this right using the Notice of Right to Receive an Appraisal Report. The notice is due no later than three business days after a creditor receives an application for a loan secured by a first lien on a dwelling.

Answer 71

TILA-RESPA Integrated Disclosure Rule

Answer 72

At the time of the referral. The Affiliated Business Arrangement Disclosure is required only if customers are referred to a settlement service provider that is an affiliated business.

Answer 73

Finance charges include: interest, loan origination fees and points, mortgage broker fees, and credit life insurance fees (when insurance is required). Appraisal and credit report fees are not included if they are part of application fees which are charged to all applicants.

Answer 74

Each party to the transaction is restored to their previous position. The transaction is canceled and funds and property must be returned.

Answer 75

Borrowers who did not receive a notice of the right to rescind or accurate disclosures as required by law.

Answer 76

APR threshold Points and fees threshold Prepayment penalty threshold

Answer 77

Money that a lender earns from a loan. The rate of interest depends on the market rates for the type of loan and the qualifications of the borrower.

Answer 78

Limited to 3%. Limitations for seller financing – or seller concessions – are established by Fannie Mae and Freddie Mac for conforming loans. Limits are based on the down payment or loan-to-value (LTV) ratio.

Answer 79

Prepaid finance charge. Prepaid finance charges are items paid at closing, such as discount points, prepaid interest, etc.

Answer 80

They are insured by the federal government. This provides security for the lender in the event that the borrower defaults on payments.

Answer 81

A document used in place of a mortgage to secure the payment of a promissory note. This method is used in many states.

Answer 82

The Cost of Funds Index. COFI is a common index used to determine rate adjustments on adjustable-rate programs.

Answer 83

Principal and interest Interest-only Minimum payment of the loan amount These flexible payment options made option ARMs popular products, but were often misunderstood by borrowers, leading to negative amortization.

Answer 84

Annual percentage rate. This is the cost of credit expressed as a percentage. The Truth-in-Lending Act requires disclosure of this amount to loan applicants.

Answer 85

Is one that exceeds Fannie Mae and Freddie Mac’s loan limits or underwriting standards.

Answer 86

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

Answer 87

An FHA loan. FHA loans require both upfront MIP (UFMIP), calculated at a rate of 1.75%, and annual MIP.

Answer 88

A type of loan program that provides the borrower with funds based on equity. They do not have to repay the loan as long as they live in the home. Reverse mortgages are only available to borrowers who meet a certain minimum age (generally 62 years of age or older).

Answer 89

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

Answer 90

A reverse mortgage. The Home Equity Conversion Mortgage is specifically a government reverse mortgage program.

Answer 91

A legal document that connects a promissory note with the collateral used to secure the note. In the case of a mortgage, the collateral is the subject property.

Answer 92

Is made up of a series of smaller periodic payments with a larger lump sum due at maturity. Many of these loans include a refinance provision so that the borrower can avoid the larger payment and start a new amortization schedule on the remaining loan amount.

Answer 93

A legal instrument that conveys title to real property.

Answer 94

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

Answer 95

Provide sources of funds for lenders. This is accomplished in the secondary market through securitization.

Answer 96

Insures loans. FHA loans are insured by the federal government against borrower default.

Answer 97

The sale of a property after a borrower has defaulted on payments to the lender. The exact procedure for handling foreclosure varies from state to state.

Answer 98

Negative amortization. This occurs when the borrower makes payments at an introductory rate which are not sufficient to pay the interest on the loan. The unpaid amount is added to the loan balance resulting in negative amortization.

Answer 99

The secondary market. Mortgage-backed securities are an investment vehicle used to generate revenue based on an underlying pool of loans. This revenue provides renewable access to funds for lenders.

Answer 100

A loan program permits a borrower to pay less than the required amount of interest on the loan. The unpaid interest is added to the loan balance and eventually results in a balance greater than the original loan amount.

Answer 101

VA loans. The VA program requires a funding fee for participation in the program. The amount is used to support the guaranty against borrower default. USDA loans charge a similar fee, called a guarantee fee.

Answer 102

The stated interest rate on a mortgage or loan agreement.

Answer 103

Made by Fannie Mae and Freddie Mac. Unlike FHA or VA loans, they are not insured or guaranteed by a government agency.

Answer 104

Subordinate lien. Subordinate liens sit in second (or third, etc.) place behind a first or primary lien. In the event of foreclosure, subordinate liens are satisfied only after the first lien is satisfied.

Answer 105

Be serving a rural or underserved area Hold the loan in its portfolio for at least three years or sell the loan to another small creditor

Answer 106

Limited to 6% between 90% - 75.1%. At 75% or less concessions are up to 9%. Limitations for seller concessions are established by Fannie Mae and Freddie Mac for conforming loans. Limits are based on the down payment or loan-to-value (LTV) ratio.

Answer 107

No rate caps A low introductory rate that expires after a short period Limited documentation for loan approval Prepayment penalties

Answer 108

Effectively makes an extra mortgage payment every year. By making payments every two weeks (26 payments), the borrower technically pays 13 months of mortgage payments in a calendar year.

Answer 109

The amount above the index that an interest rate can adjust for an ARM. The margin is set by the lender and is the amount above the index that the interest rate can adjust. Index plus margin is the formula used to determine a new interest rate on an adjustable-rate mortgage.

Answer 110

Is analyzed to determine the size of the borrower’s existing debt load. It is a primary factor in the lender’s analysis of the borrower’s ability to repay a loan.

Answer 111

Finance properties in amounts that exceed conforming guidelines. Jumbo loans are loans that exceed Fannie Mae/Freddie Mac loan limits; however, there are GSE-eligible loans available.

Answer 112

Determine the interest rate change on an ARM. The index is the basis for future rate changes. The margin is set by the lender and is the amount above the index that the interest rate can adjust at the time of the rate change.

Answer 113

$726,200. This amount is set annually by the Federal Housing Finance Agency – the agency which oversees Fannie Mae and Freddie Mac.

Answer 114

Areas of the country with higher conforming loan limits. High-cost areas exist all over the country, with the exception of the Midwest.

Answer 115

Paystubs for the most recent 30-day period and W-2s for the most recent two-year period.

Answer 116

With an LTV of less than or equal to 90%, for the first 11 years of the loan term or until the end of the loan term, whichever comes first. With an LTV of greater than 90%, for the first 30 years of the loan term or until the end of the loan term, whichever comes first.

Answer 117

A uniform measurement of the cost of a loan, including interest and financed closing costs, expressed as a percentage.

Answer 118

Provide up to two years of tax returns for income qualification.

Answer 119

Rural areas. Loans under the USDA’s Rural Development Housing & Community Facilities Programs are made for the purpose of assisting low-income borrowers to purchase homes in rural areas.

Answer 120

Credit capacity and credit character. These answer the questions of whether the borrower is both willing and able to repay the loan.

Answer 121

Safe harbor qualified mortgages.

Answer 122

A payment made by a lender to a loan originator for originating a loan at a rate higher than the par rate.

Answer 123

The secondary market. The secondary market helps fund the primary market where loans are made to borrowers.

Answer 124

3.5%. FHA loans also require upfront and annual MIP.

Answer 125

Called 203(b). It is used to purchase or refinance one- to four-unit family dwellings.

Answer 126

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.

Answer 127

Guarantees loans. VA loans provide a guaranty to lenders for a certain percentage of the loan amount.

Answer 128

Qualify at the note rate. However, funds placed in an escrow account will allow them to pay a discounted monthly payment based on a lower interest rate for two years - 2% in the first year and 1% the second year.

Answer 129

Certificate of Eligibility. Eligibility is based on length of service. COEs are not issued to veterans who are dishonorably discharged.

Answer 130

The type of loan and whether the veteran’s eligibility has been used before. Disabled veterans are generally exempt from paying the funding fee.

Answer 131

Limited to 1%. There are limitations on certain types of charges, and closing costs cannot be financed in purchase transactions.

Answer 132

41%. The VA only looks at the total debt ratio. However, underwriters do look at the veteran’s residual income for qualification purposes.

Answer 133

Discount points are used to adjust the price of a loan. One discount point is equal to 1% of the loan amount.

Answer 134

Entitlement. VA guarantees a loan amount four times greater than the eligibility listed on the veteran’s Certificate of Eligibility.

Answer 135

30 years, offered in a fixed rate only. They do not require a down payment, but lenders must use debt ratios to ensure the borrower can repay the loan.

Answer 136

Used for consumers who do not represent the credit risk of subprime borrowers but who do not meet the underwriting requirements for conforming prime rate loans.

Answer 137

Loans with higher interest rates made to borrowers with blemished credit or other qualification issues. The loans do not conform with Fannie Mae and Freddie Mac underwriting requirements.

Answer 138

Any mortgage product other than a 30-year fixed-rate mortgage loan.

Answer 139

Called 251. It is based on the 203(b) program and offers a number of adjustment options ranging from one to ten year(s).

Answer 140

The interest rate is set at the time of settlement and does not change during the life of the loan. Monthly payments would only change if the loan servicer finds a shortage or surplus in the escrow amount (i.e., taxes and insurance premiums).

Answer 141

The interest rate may change one or more times over the life of the loan. ARMs are often initially made at lower interest rates than fixed rate mortgages.

Answer 142

A limit on the amount that the interest rate can increase during the first adjustment period for an ARM.

Answer 143

A limit on the amount that an interest rate can change during any adjustment period for an ARM, with exception of the initial adjustment, assuming an initial cap is in place on that particular product.

Answer 144

The limit on the amount by which an interest rate can change over the life of an ARM. It is also known as a rate ceiling.

Answer 145

How often an interest rate adjustment can occur on an ARM. The frequency can be annually, every few years, or even monthly.

Answer 146

To the lender at closing to reduce the note rate of the loan.

Answer 147

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

Answer 148

On the early ARM disclosure provided at application and on the promissory note when the loan goes to closing.

Answer 149

The loan agreement contains a conditional refinance provision. This gives the borrower the option to convert the loan to a regular fixed-rate loan at its maturity date.

Answer 150

Closed-end credit. A cash-out refinance is an example of a home equity loan.

Answer 151

Provide up to two years of tax returns for income qualification.

Answer 152

Open-end credit. In a HELOC, a borrower pays off the principal and can then continue to make withdrawals. This is similar to a credit card.

Answer 153

A piggyback loan. In a piggyback loan scenario, a borrower takes a simultaneous second mortgage. In an 80-10-10 loan, the first lien is 80% LTV, the second is 10% LTV and the borrower makes a 10% down payment.

Answer 154

An interim loan used to pay for the construction of a home. They are short-term financing and often handled as interest-only transactions. A construction loan can be considered a type of “bridge loan.”

Answer 155

Pay only the monthly interest due on the loan, which keeps monthly payments low. However, at the end of the term, the borrower still owes the principal amount of the loan.

Answer 156

Loan limits and underwriting standards established by Fannie Mae and Freddie Mac.

Answer 157

Identification of the borrower and the lender The borrower’s promise to repay the loan Amount of the loan Interest rate charged on the unpaid principal Period of the term for repayment of the loan Reference to the real estate used to secure the loan Provisions for the imposition of late charges for overdue payments Signature(s) of borrower(s)

Answer 158

Grossed up by as much as 25% for income qualification purposes. Other non-taxed income, such as disability and public assistance, may be grossed up as well.

Answer 159

Origination fees Property taxes Title insurance Escrow costs Appraisal fees Taxes Fees owed to state and local government

Answer 160

The relationship between a borrower’s monthly debt obligations and his/her gross monthly income. It is expressed as a percentage.

Answer 161

The difference between the fair market value of a property and the current balances of any liens against the property.

Answer 162

Prepayment and bi-weekly payments. Prepayment allocates more funds to the loan principal as time goes by. A bi-weekly plan amounts to an additional mortgage payment every year.

Answer 163

UFMIP (upfront mortgage insurance premiums) and annual MIPs (annual mortgage insurance premiums)

Answer 164

The fully-indexed rate. This requirement applies to all ARM transactions except for open-end home equity loans.

Answer 165

Qualified mortgages, unless the loan is a balloon payment qualified mortgage from a small creditor. Balloon payments are also generally prohibited for loans covered by HOEPA.

Answer 166

Presumption of compliance with ability-to-repay standards and a safe harbor from liability for loan originators making qualified mortgages.

Answer 167

Prime mortgages, not subprime or higher-priced mortgage loans.

Answer 168

Higher-priced mortgage loans.

Answer 169

No negative amortization No deferment of principal (e.g., no interest-only payments) No balloon payment feature (unless a small creditor balloon payment QM) Term does not exceed 30 years Points and fees do not exceed 3% total loan amount APR does not exceed APOR for a comparable transaction by more than 2.25%

Answer 170

No negative amortization Term of at least five years; does not exceed 30 years Compliance with 3% points and fees cap Verification of consumer’s income and assets Determination of consumer’s DTI (43% limit does not apply) Loan has a fixed rate Loan will be held by the creditor for at least three years Creditor is a small creditor in a rural/underserved area

Answer 171

No Ratio No Income, No Assets (NINA) Stated Income, Stated Assets (SISA) No Income, Verified Assets (NIVA) Stated Income, Verified Assets (SIVA) No Doc

Answer 172

Interest-only payments Negative amortization A payment-option feature Balloon payments

Answer 173

Limited to 6% of sales price

Answer 174

25% of the loan amount, for a loan greater than $144,000

Answer 175

The Uniform Residential Loan Application (URLA). 1003 is Fannie Mae’s form number. Freddie Mac refers to the same form as Form 65.

Answer 176

If the appraiser notes that the property is located in a flood zone. Zones A and V require mandatory flood insurance.

Answer 177

Voluntary for loan applicants. If they decline to provide the demographic information requested on the 1003, loan originators should make a best guess based on visual observation and note that they have done so.

Answer 178

A borrower’s ability to meet monthly housing and other fixed debt expenses based on monthly income.

Answer 179

Information available in public records and data reported by creditors (including derogatory information, such as late payments).

Answer 180

Fair, Isaac and Company - now the Fair Isaac Corporation (FICO). Credit scores are often known as FICO scores.

Answer 181

Based on loan amount, loan term, and loan-to-value. The mortgage insurance premium required on all FHA loans is collected as an upfront premium (UFMIP) and on a monthly basis (annual MIP, divided into 12 equal parts).

Answer 182

An appraisal method which compares the subject property to recently-sold comparable properties in close proximity. It is also called the “market approach.”

Answer 183

The ratio of the principal loan balance to the appraised value of the property. Loan-to-value is used in borrower qualification to assess risk.

Answer 184

Recently opened accounts Misspellings and errors Uncharacteristic use or sudden increase in use of credit Large number of recent inquiries Credit history that does not match what the originator knows about the applicant

Answer 185

The back-end ratio. The back-end ratio looks at the percentage of a borrower’s housing debt plus other consumer debts compared to his/her monthly gross income.

Answer 186

50%. The back-end ratio (or total debt ratio) is a comparison of all monthly debts (including housing) to the applicant’s monthly income.

Answer 187

1% of the loan amount. Discount points are often used to buy down the interest rate on a loan.

Answer 188

The ability to meet the financial demands of loan repayment. Existing debt and its ratio to a borrower’s income – also known as the debt-to-income ratio – is a primary factor in a lender’s analysis of a borrower’s ability to repay a loan.

Answer 189

43%. The back-end ratio (or total debt ratio) is a comparison of all monthly debts (including housing) to the applicant’s monthly income.

Answer 190

States that a loan has payment or loan terms that can change. When a borrower obtains an ARM which is secured by their principal dwelling and has a term of more than one year, creditors must provide the special disclosures for variable-/adjustable-rate mortgages.

Answer 191

For new home purchases. It explains the settlement process and the borrower’s rights under RESPA.

Answer 192

41%. The back-end ratio (or total debt ratio) is a comparison of all monthly debts (including housing) to the applicant’s monthly income. VA programs only use the back-end ratio – they do not consider the front-end ratio.

Answer 193

Determining loan approval based on lender guidelines and borrower qualifications. The underwriter is responsible for making sure a loan applicant and subject property meet the requirements for a specific loan program.

Answer 194

Uniform Residential Appraisal Report (URAR). It is the standard form appraisers use to document the findings from an appraisal.

Answer 195

Capture information from the applicant in order to complete the loan application. It may take place in person, over the phone, or online.

Answer 196

A loan-to-value ratio used when dealing with second liens. CLTV is calculated by combining the cost of all mortgages on a home and comparing the combined cost to the value of the home securing the loans.

Answer 197

“Borrower Information.” It is used to collect basic identifying information about the potential borrower and the type of credit they are seeking.

Answer 198

The applicant will be asked to provide supporting documentation. The documentation supports information disclosed on the application and may include employment verification, tax and income documents, etc.

Answer 199

A verification of employment. It is one form of loan application documentation used for applicants who are not self-employed.

Answer 200

Must be consistently received for a period of two years in order to be used for income qualification. The employer must verify that the additional income is likely to continue.

Answer 201

Loan programs are diligently matched to the current financial circumstances of each customer. Some states have passed laws making loan suitability a regulated standard.

Answer 202

Considers the replacement value of the property. It is often used for new properties and analyzes what it would cost to build a substitute residence, plus the value of the land.

Answer 203

Tangible net benefit.

Answer 204

Cash reserves Gift funds Stocks and bonds IRA/401K Accounts Other real estate Cash surrender value of life insurance Value of automobiles

Answer 205

Automated underwriting systems (AUSs). Fannie Mae’s system is called Desktop Underwriter, and Freddie Mac’s system is known as Loan Product Advisor. FHA and VA also have their own proprietary systems.

Answer 206

Only considers the housing debt. Debt ratios look at the percentage of debt to monthly income. The front-end or housing ratio only takes the mortgage payment (or rental payment) into consideration.

Answer 207

Sales comparison approach.

Answer 208

Determine the value of the property. The appraisal is also used to establish any deficiencies that affect the marketability of the property.

Answer 209

An important consideration for most loan programs. In the past, nontraditional programs did not always verify income. However, today, lenders take a close look at a borrower’s ability to repay a loan.

Answer 210

Paystubs for the last 30-day period and W-2s for the last two-year period.

Answer 211

An example of a voluntary lien is…

Answer 212

Promissory notes payable to financial institutions and other creditors/lenders Credit accounts with outstanding balances Unpaid income taxes and interest Child support and alimony Previous bankruptcies

Answer 213

25%. This type of income typically includes Social Security, public assistance, and disability. Loan applicants must still provide comprehensive documentation for these types of income.

Answer 214

3.5%. This amount is based on the sales price or appraised value of the property and can be the borrower’s own funds, gift funds, or a grant.

Answer 215

75%. Investment properties generating rental income are just one type of special income that cannot be used at 100% for qualification purposes.

Answer 216

Obtain a transcript of a loan applicant’s tax returns. Lenders use this to perform an independent verification of tax documentation. Form 8821 is also used to authorize release of other tax information.

Answer 217

{base rate} x {hours} = {weekly income} {weekly income} × {weeks worked} = {annual income} {annual income} ÷ 12 = {monthly income}

Answer 218

Is called “Current Employment/Self-Employment and Income.” It is used to collect information about the applicant's employment status and accompanying details. It is followed by Section 1c and 1d, which collect the same information if the consumer has more than one source.

Answer 219

{bi-weekly salary} × 26 = {annual income} {annual income} ÷ 12 = {monthly income}

Answer 220

Usually averaged over a two-year period. Self-employed income would come from the tax return; commissioned income may be taken from W-2s or tax returns.

Answer 221

Ten years. This is longer than standard credit account information, which is purged after seven years.

Answer 222

Evaluating the capacity of the borrowers’ ability to repay a loan. This is because these forms of income are often less stable than traditional salaried employees

Answer 223

“Financial Information - Assets and Liabilities.” It is used to capture information about the potential borrower's financial circumstances, including their assets, accounts, and existing debts.

Answer 224

Gathered and sold by consumer reporting agencies. The credit report (or consumer report) is the method for obtaining credit information.

Answer 225

Using a statistically-validated system. This is required by consumer protection laws such as ECOA and FCRA.

Answer 226

Generally reported for a period of seven years. There are some exceptions for information that may be reported for a longer period.

Answer 227

“Financial Information - Real Estate.” It is used to capture information about any properties that the applicant currently owns, if any, and what they owe on them. For potential borrowers who do not currently own any real estate, this section would not apply.

Answer 228

May be used for income qualification if they are court-ordered. The loan applicant must be able to show a stable history of receiving the payments.

Answer 229

“Loan and Property Information.” It is used to find out more about the purpose of the loan that the applicant is seeking and the property that will secure it. Section 4b also collects information about other loans secured by the same property (for example, a piggyback loan to finance a down payment).

Answer 230

The company name Date the account was opened Date any information for the account was reported Months reviewed/date of last activity Credit limit (“high credit”) Balance and past due amounts Timeliness of payments

Answer 231

Equifax, Experian, and TransUnion. Not all creditors report to all three agencies.

Answer 232

Payments for items such as rent and utilities. First-time homebuyers or consumers with little credit history may sometimes use nontraditional credit to establish creditworthiness.

Answer 233

“Declarations.” It is used to ask the applicant specific questions about the property they wish to buy or refinance, the funding they are using, and their financial history.

Answer 234

28%. The front-end ratio (or housing ratio) is the comparison of housing debt to the applicant’s monthly income.

Answer 235

“Acknowledgments and Agreements.” In this section, the consumer is informed of the legal obligations they take on by signing the application, and they are prompted to give their signature. Primarily, this prompts the consumer to affirm that the information they provided was truthful and to acknowledge their understanding that lying on the application can have criminal consequences.

Answer 236

31%. The front-end ratio (or housing ratio) is the comparison of housing debt to the applicant’s monthly income.

Answer 237

“Military Service of Borrower.” This section contains questions about the applicant's military service, if they are serving or have served. Some loan products (e.g., VA loans) are meant for and only available to servicemembers, and the URLA can be used to apply for these loans. If this section is not applicable to the applicant, it is not required.

Answer 238

“Demographic Information.” Here, consumers are prompted to self-identify demographic data. This data is collected for reporting purposes in compliance with HMDA, to ensure fair lending practices. Consumers may choose not to self-identify, in which case the loan originator must use broad categories to attempt identification based on visual observation and surname only, and must indicate that they did this.

Answer 239

Dividing the amount of the mortgage by the appraised value or purchase price of the home, whichever is less. Loan-to-value ratio determines the loan program an applicant may qualify for.

Answer 240

Contractually hold the interest rate and points for a loan. They are usually made in writing and the lender is bound to honor the rate at closing.

Answer 241

“Loan Originator Information.” Here, the loan originator gives the name of their employer, its address, and its NMLS unique identifier and state license ID. The loan originator must also add their own individual name, unique identifier, state license ID, and signature, as well as the date.

Answer 242

A borrower’s attitude toward credit obligations and a prediction of his/her future actions. Creditors/lenders assume that if an individual has met his/her obligations in the past, he/she will continue to do so in the future.

Answer 243

W-2s and 1040s. Substantial income increases and decreases must be addressed.

Answer 244

The underwriter will review: The appraisal report The preliminary title report Any inspections requested by the borrower or required by the lender

Answer 245

In case the borrower defaults and the lender is required to foreclose.

Answer 246

They are looking for an explanation of the derogatory credit. Without an explanation or documentation that makes sense, the derogatory information can be used as the basis for loan denial.

Answer 247

Current and reasonably-expected income or assets Employment Credit history Current debt obligations Mortgage-related obligations Payments on any simultaneous loans

Answer 248

Ensure that the value of the property is adequate to serve as security – or collateral – for the loan. For this reason, a licensed appraiser must conduct the appraisal.

Answer 249

For investment properties. It would generally not be used for a single-family home being used as a borrower’s primary residence.

Answer 250

Provides protection for the borrower for potential title liabilities. These include mechanic’s liens, unreleased mortgages, and other third-party rights. Obtaining this type of policy is voluntary on the part of the homeowner.

Answer 251

Protects the lender from title defects or undisclosed liens that should have been cleared up prior to closing. Lenders typically make this type of policy mandatory; the borrower is required to cover the cost of obtaining it.

Answer 252

Land and anything that is permanently affixed to it. Personal property includes items that can be moved.

Answer 253

Monetary claims that provide a creditor with the right to foreclose. A mortgage is an example of a lien.

Answer 254

Tax liens Mechanic's liens Judgments Attachments

Answer 255

The chronological order in which liens are filed against a property. The order establishes the priority of the liens in the event the property is foreclosed. Lenders want first priority for the mortgage on a property.

Answer 256

Provide security to the lender in the event of default. PMI also allows the borrower to make a smaller down payment.

Answer 257

All FHA loans.

Answer 258

The desired form of holding ownership to property because it has the fewest restrictions. Almost all residential mortgage loan transactions involve an estate held in fee simple.

Answer 259

The owner is entitled to the entire property and has “unconditional power of disposition” during his/her lifetime, and the property will descend to his/her heirs upon death.

Answer 260

Any borrower accepting a high-cost home loan First-time borrowers accepting a negative amortization loan Any borrower seeking a reverse mortgage loan from the FHA Counseling is encouraged for any borrowers choosing an ARM instead of a fixed-rate loan

Answer 261

In January 2014

Answer 262

Reasonably-reliable third-party documents, such as tax returns, W-2 forms, payroll statements, bank statements, etc.

Answer 263

Open-end credit plans Timeshare plans Reverse mortgage loans Temporary/bridge loans with terms of 12 months or less Construction phase of 12 months or less in a construction-to-permanent loan Designated extensions of credit from certain entities/agencies

Answer 264

Current/reasonably-expected income/assets (not including equity) Current employment status Monthly mortgage payments Monthly payments on any simultaneous loans secured by the property Monthly payments for property taxes/insurance, other property-related obligations Debts/alimony/child support Monthly DTI or residual income Credit history

Answer 265

The borrower gives legal title to the lender, but retains equitable title. The lender “owns” the property via a deed of trust. The lender has a right to possession of the property in the event of default. Legal title is returned to the borrower upon repayment and satisfaction of the debt.

Answer 266

The borrower retains legal and equitable title to the property. The mortgage is a lien against the property. In the event of default, the lender must institute a foreclosure proceeding to obtain legal title.

Answer 267

A process in which a broker originates and closes a loan in his/her own name, then transfers the loan to a lender at closing. The lender provides funds for disbursement.

Answer 268

Parties meet to execute documents, but funds are not disbursed and property is not conveyed until certain specified conditions are met.

Answer 269

Parties meet to execute documents and funds are subsequently disbursed. Lenders involved in purchase transactions are required to ensure that the closing agent has adequate funds to close.

Answer 270

May face a five-year jail term

Answer 271

Deposit or “earnest money” held in escrow Cash Checking/savings accounts, with account numbers Stocks and bonds Cash value of life insurance policies

Answer 272

Real estate Retirement accounts Net worth of businesses Automobiles

Answer 273

At least three business days before closing, any time the APR varies by more than one eighth of 1% (0.125%).

Answer 274

No later than three business days after receiving an application for credit secured by a first lien on a dwelling.

Answer 275

A property is bought and resold within a very short period of time. The resale usually involves the use of an inflated appraisal of the property’s value. The HPML Rule works to curb property flipping by creating second appraisal requirements for certain transactions.

Answer 276

Fees lenders can earn when selling loans in the secondary market. They are often cited in the controversy over yield spread premiums earned by mortgage loan originators before the establishment of borrower credit requirements.

Answer 277

Unilaterally increasing the charges of another settlement service provider and retaining the difference. HUD considers mark-ups a form of illegal fee-splitting and a violation of RESPA.

Answer 278

A person who accepts a fee for the use of his/her Social Security Number and other personal information on a mortgage application. Straw buyers are often unaware that they are liable for fraud and for making false statements to the government.

Answer 279

Financial institutions to provide customers with a privacy notice as well as an opt-out notice. This is aimed at protecting their nonpublic personal information.

Answer 280

A creditor makes an unfavorable decision. An example would be a lender rejecting a loan application. ECOA requires notice of adverse action within 30 days of application

Answer 281

In person, via U.S. mail, or via facsimile. Email and secure document handling are also becoming acceptable means. Providing the information verbally or via a public posting are not acceptable methods for most disclosures.

Answer 282

Be on the lookout for and report anything that could indicate fraudulent behavior.

Answer 283

An appraiser places a much higher value on a property than can be justified. This practice has been commonly used in conjunction with other forms of mortgage fraud.

Answer 284

An individual who accepts a fee to falsely claim ownership to a property. Straw sellers are sometimes used in conjunction with straw buyers in elaborate mortgage fraud schemes.

Answer 285

Violates the Federal Reserve’s Staff Commentary on Regulation Z revisions. This example is considered a misleading claim of debt elimination.

Answer 286

Providing fair housing throughout the United States Prohibiting discrimination in the sale and renting of housing Prohibiting discrimination in mortgage lending transactions

Answer 287

Falsified applications. Generally, they are trying to obtain a loan they do not qualify for, but for the most part do intend to repay the loan.

Answer 288

Factual data. Loan programs such as stated income loans (also called liar’s loans) led to an increase in loan applicant fraud. This has been blamed for increased foreclosures.

Answer 289

The purchase price being higher than the list price. This could be a sign that a legitimate buyer is not involved in the transaction.

Answer 290

Using another person’s name, Social Security Number, and other personal information to secure credit or make purchases. It often figures into elaborate mortgage fraud schemes.

Answer 291

Compensation based on transaction terms Dual compensation Steering

Answer 292

Any material misrepresentation, express or implied, in any commercial communication regarding any term of a mortgage credit product.

Answer 293

If a loan features a prepayment penalty in force for more than 36 months or exceeding 2% of the amount prepaid, the loan is subject to HOEPA and the penalty is prohibited.

Answer 294

Closed-end loans, open-end loans, and purchase money mortgages secured by the borrower’s principal dwelling.

Answer 295

The practice of targeting neighborhoods that are primarily occupied by members of vulnerable and/or protected classes and offering expensive, risky loan products.

Answer 296

Government-owned, not stockholder-owned Primarily intended to guarantee securities backed by FHA, VA, RHS loans (does not buy loans) Not involved in guaranteeing or dealing with conventional mortgages

Answer 297

Agent for the borrower and owes them fiduciary duties, including loyalty, good faith, and an obligation to put the borrower’s interests ahead of the broker’s.

Answer 298

Regulations G and H

Answer 299

Increase uniformity Reduce regulatory burden Enhance consumer protection Reduce fraud

Answer 300

Participating in the NMLS Writing rules and regulations or adopting procedures Conducting background checks Setting and accepting licensing fees Setting or resetting renewal or reporting dates Approving or denying loan originator applications and renewals Implementing laws for amending or surrendering licenses Bringing enforcement actions

Answer 301

- Establishing a process to verify licensure - Examining books, papers, records, or other data - Summoning persons to appear and produce records - Administering oaths and affirmations - Examining, taking, and preserving testimony - Reporting violations of law

Answer 302

- Providing procedures for challenging information - Requiring loans to be included in reports of condition - Entering cease and desist orders - Suspending, terminating, and refusing renewal of licenses - Ordering the removal and ban of individuals from employment - Imposing civil penalties

Answer 303

- Any licensed loan originator - Any individual required to have a loan originator license

Answer 304

Withhold, abstract, remove, mutilate, destroy, or secrete books, records, or other information

Answer 305

Initial licensing or license renewal License suspension, conditioning, revocation, or termination Determining compliance with the law

Answer 306

- Criminal, civil, and administrative history information - Personal history and experience information - Any other documents or evidence relevant to an investigation

Answer 307

- Account compilations - Information lists - Data concerning loan transactions

Answer 308

- Administer oaths - Subpoena witnesses - Require the production of relevant documents - Control access to records of person under investigation

Answer 309

Remove the records without a court order or the regulatory agency's consent

Answer 310

Access them in order to conduct regular business affairs

Answer 311

- Retain attorneys, accountants, or other professionals to assist with examination - Enter into agreements with other government officials to reduce regulatory burden - Use, hire, contract, or employ analytical systems, methods, or software - Accept or rely on reports from other government officials or audit reports by independent CPA

Answer 312

Shared with other state and federal officials involved with mortgage industry oversight without the loss of privilege and confidentiality protections provided by law

Answer 313

- Disclosure under federal or state law allowing for disclosure to the public of information held by a government officer or agency - Subpoena, discovery, or admission into evidence in civil action or administrative process

Answer 314

- Employment history - Disciplinary and enforcement actions

Answer 315

Nationwide Multistate Licensing System

Answer 316

Any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands

Answer 317

A natural person

Answer 318

A natural person, corporation, company, limited liability company, partnership, or association

Answer 319

- Take a residential mortgage loan application, or - Offer or negotiate the terms of a residential mortgage loan

Answer 320

Request for an offer of residential mortgage loan terms and the information about the borrower that is necessary in a decision on whether to make such an offer.

Answer 321

Any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other security interest on a dwelling or residential real estate upon which is constructed or intended to be constructed a dwelling

Answer 322

Contains one to four units, whether or not the structure is attached to real property

Answer 323

Any real property located in a state upon which is constructed or intended to be constructed a dwelling.

Answer 324

- Advising on loan terms - Preparing loan packages - Collecting information on behalf of the consumer

Answer 325

- Individuals engaged solely as loan processors/underwriters performing clerical tasks - Persons or entities only performing real estate brokerage activities, unless compensated by a mortgage professional - Persons or entities solely involved in extensions of credit relating to timeshare plans

Answer 326

- Acting as a real estate agent/broker for a buyer, seller, lessor, or lessee of real property - Bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property - Negotiating any portion of a contract relating to the sale, purchase, leaser, rental, or exchange of real property - Engaging in any activity for which a person engaged in the activity is required to be licensed as a real estate agent/broker

Answer 327

Individual who performs clerical or support duties at the direction of and subject to the supervision of a licensed loan originator.

Answer 328

- The receipt, collection, distribution, and analysis of information used for the processing and underwriting of a loan - Communicating with a consumer to obtain information necessary for the processing and underwriting of a loan

Answer 329

- Offer or negotiate loan rates or terms - Counsel consumers about loan rates or terms - Represent to the public that they can perform the activities of a loan originator

Answer 330

All residential mortgage loan-related activities from the taking of a loan application through the completion of all loan closing documents and funding of the loan.

Answer 331

- Meets the definition of a loan originator - Is an employee of a depository institution or an institution regulated by the Farm Credit Administration - Is registered with, and maintains a unique identifier through, the NMLS

Answer 332

- Manner and means of performance of work are subject to the right of control of a person - Compensation for federal income tax purposes is reported on a W-2 form issued by the controlling person

Answer 333

- Board of Governors of the Federal Reserve System - Comptroller of the Currency - National Credit Union Administration - Federal Deposit Insurance Corporation

Answer 334

- A loan originator - Not an employee of a depository institution, a subsidiary owned and controlled by a depository institution and regulated by a federal banking agency, or an institution regulated by the Farm Credit Administration - Licensed by a state or by the CFPB and maintains a unique identifier

Answer 335

- Permanently identifies a loan originator - Is assigned by the NMLS to track and identify loan originators

Answer 336

- Residential mortgage loan application forms - Solicitations or advertisements, including business cards and websites - Other documents established by rule or order of the licensing agenc

Answer 337

- Taking a residential mortgage loan application - Offering or negotiating the terms of a residential mortgage loan for compensation or gain - Representing to the public that he/she can or will perform these activities

Answer 338

Receiving an application for the purpose of facilitating a decision whether to extend an offer of residential mortgage loan terms to a borrower.

Answer 339

- Presenting for consideration particular loan terms - Communicating with a borrower or prospective borrower to reach a mutual understanding of loan terms - Recommending, referring, or steering a borrower or prospective borrower to a particular lender or loan terms - Receiving payment of any thing of value in connection with these activities

Answer 340

Engage in residential mortgage loan activities as a loan processor/underwriter unless a state-licensed loan originator

Answer 341

- Loan processor/underwriter - Registered loan originator employee of a bank/credit union - Only real estate brokerage activities - Only extensions of credit related to timeshare plans - For an immediate family member - For a dwelling that served as the individual's residence - Licensed attorney negotiating on behalf of a client - Employee of a government agency or housing finance agency - Employee of a nonprofit organization

Answer 342

- Spouse - Child - Sibling - Parent - Grandparent and grandchild - Stepparent, stepchild, and stepsibling - Adoptive relationship

Answer 343

- Chartered by a state to help meet affordable housing needs of residents - Supervised by the state government - Subject to audit and review by the state - Whose activities make it eligible to be a member of the National - Council of State Housing Agencies (NCSHA)

Answer 344

- Periodically examine its books and activities - Revoke its status if it doesn't continue to meet criteria

Answer 345

- Fingerprints - Personal history and experience

Answer 346

- Three hours of federal law and regulation - Three hours of ethics - Two hours of nontraditional mortgage products

Answer 347

- Ethics - Federal and state law and regulation relating to mortgage origination - Fraud, consumer protection, nontraditional mortgages, and fair lending

Answer 348

He/she may retake twice with at least 30 days between each attempt

Answer 349

Wait at least six months before re-testing

Answer 350

A surety bond

Answer 351

The dollar amount of loans originated

Answer 352

Net worth in an amount that reflects the dollar amount of loans originated

Answer 353

Claims resulting from violations of state or federal laws and regulations

Answer 354

- No prior license revocation - No felony conviction or guilty/nolo contendere plea during the seven-year period preceding application date, or at any time if the felony involved fraud, dishonesty, a breach of trust, or money laundering - Completion of pre-licensing education - Passage of the written test - Satisfaction of the surety bond/net worth/state fund requirements - Demonstration of financial responsibility, character, and general fitness

Answer 355

- Current outstanding judgments - Current outstanding tax liens - Foreclosures or pattern of seriously delinquent accounts in past three years

Answer 356

Eight hours

Answer 357

- Three hours of federal law and regulation - Two hours of ethics - Two hours of nontraditional mortgage products

Answer 358

- Only receive credit for a course in the year which the course was taken - Not take the same approved course in the same or successive years

Answer 359

Two hours for every one hour taught

Answer 360

- Continue to meet minimum standards for initial licensure - Satisfy annual continuing education requirement - Pay required fees

Answer 361

An expired license

Answer 362

Mortgage Call Reports

Answer 363

- Depository institutions - Subsidiaries controlled by depository institutions - Institutions regulated by the Farm Credit Administration

Answer 364

- Requirements for individuals to obtain a license before engaging in loan origination activities - Authority for the CFPB to determine whether a state licensing program for loan originators meets the standards established in the S.A.F.E. Act

Answer 365

- Defraud or mislead borrowers or lenders - Engage in unfair or deceptive practices - Obtain property by fraud or misrepresentation - Enter into a contract providing for fees earned through "best efforts" - Enter into a contract for specific loan terms that are not actually available - Conduct business without a valid license - Fail to make required disclosures

Answer 366

- Fail to comply with state or federal laws - Make false or deceptive statements or representations - Knowingly make omission of material fact - Make payment, threat, or promise for the purpose of influencing a person's independent judgment - Collect or charge prohibited fees - Require excessive property insurance coverage - Fail to truthfully account for fund

Answer 367

- Deny, suspend, revoke, condition, or decline to renew a license - Order a restitution - Impose fines - Issue orders or directives

Answer 368

Separate and distinct violation

Answer 369

The CFPB to follow if it determines that a state has not adopted laws satisfying the S.A.F.E. Act's licensing requirements