Mortgage Loan Origination Activities

Question 1

Give three examples of advertisement.

Answer 1

Newspapers and magazine ads
Leaflets and flyers
Catalogs

Question 2

Loan pre-qualification does include

Answer 2

an analysis of the borrower’s credit report and an in depth look at the borrower’s income ability to purchase a home.

Question 3

If a creditor advertises directly to a borrower, they are required to:

Answer 3

• advertise only terms that are the specific terms that the lender will offer in credit plans.
• the ad must state the finance charge rate using the term Annual Percentage Rate or APR.
• if the APR might increase after consummation of the loan, the ad must be specific on this detail; and
• a simple annual or periodic rate applied to an unpaid balance may be advertised in conjunction with the APR, but not more conspicuous than the APR.

Question 4

A trigger term is

Answer 4

a phrase that represents the attractive features of the credit plan within the advertisement.

Question 5

Give four examples of trigger terms

Answer 5

• 10 percent down payment
• $1000 down
• 80 percent financing
• trade in with $5,000 appraised value

Question 6

If anything like the above appears in an advertisement the ad must also disclose:

Answer 6

• the price of the home
• the amount of the down payment required or that none is required.
• the number of payments necessary to repay the loan
• the amount of the monthly payment for the entire term of the loan.
• due dates or period of payments scheduled to repay; and
• the APR

Question 7

Give four examples of non-trigger terms.

Answer 7

• Easy monthly payments
• Low down payments
• pay bi-weekly
• terms to fit any budget

Question 8

if a creditor is advertising an adjustable rate credit plan there are additional requirements for their advertising. The advertisement must say

Answer 8

that the APR may increase or is subject to change.

Question 9

The Map Rule was created in

Answer 9

2011 to prohibitive misrepresentation in a commercial communication about any term(s) of a mortgage credit product

Question 10

There are three important terms to remember when discussing the MAP Rule:

Answer 10

• term
• mortgage credit product
• commercial communication

Question 11

Term means

Answer 11

any of the fees, costs, obligations, or characteristics of or associated with the product. It also includes any of the conditions on or related to the availability of the product.

Question 12

Mortgage credit product means

Answer 12

any form of credit that is secured by real property or a dwelling and that is offered or extended to a consumer primarily for personal, family or household purposes.