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Mortgage 101 > Mortgage Test > Flashcards

Mortgage Test Flashcards

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1
Q

A borrower has a right to ask for a copy of the appraisal under ECOA after denial:

a. within 60 days
b. within 90 days
c. within 120 days
d. within 30 days

A

a. within 60 days

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2
Q

A borrower must receive the disclosure to the right to receive a copy of the appraisal required by ECOA:

a. anytime during the application process
b. within 7 days of the application
c. within 7 days of closing
d. at app or within 3 days thereof

A

a. anytime during the application process

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3
Q

A creditor may ask about an applicant’s marital status.

a. true, as long as the information is used to determine whether credit is extended
b. false, asking such a questions is considered discrimination
c. true, as long as the info is not used to determine whether credit will be extended
d. false, the info does not matter & creditors should not ask

A

c. true, as long as the info is not used to determine whether credit will be extended

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4
Q

A creditor must notify an applicant of it’s intended action on an app within ___ days after app is received

a. 60
b. 120
c. 90
d. 30

A

d. 30

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5
Q

A mortgage broker may inform an applicant that fed law requires the broker to ask about race, sex, martial status & age by putting the info on a web site.

a. false, this info must begiven to the applicant in person
b. true, as long as the applicant consents and can access the information
c. false, the info must be communicated directly through e-mail
d. true, as long as the info remains available for 30 days

A

b. true, as long as the applicant consents and can access the information

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6
Q

According to ECOA, how quickly after a credit decision must the borrower request a free copy of their appraisal report?

a. 3 days
b. 30 days
c. 60 days
d. 90 days

A

d. 90 days

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7
Q

Accord to ECOA, how quickly must the appraisal be delivered to the borrower when they have requested said report within 90 days of a credit decision?

a. 3 days
b. 10 days
c. 30 days
d. 60 days

A

c. 30 days

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8
Q

Accord to ECOA, one must retain proof of compliance for how long?

a. 0 months for business & 25 months for residential
b. 12 months for business & 24 months for residential
c. 12 months for business & 25 months for residential
d. no separate document retention times

A

c. 12 months for business & 25 months for residential

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9
Q

According to ECOA, the appraisal disclosure generally must be delivered to the borrower when?

a. within 3 days of app
b. within 30 days of app
c. prior to closing
d. within 90 days of closing

A

a. within 3 days of app

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10
Q

Any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit is a:

a. buyer
b. creditor
c. lender
d adjunct

A

b. creditor

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11
Q

ECOA protects borrowers based on:

a. credit score
b. geographic area
c. physical characteristics
d. disability

A

c. physical characteristics

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12
Q

Entities making business or commercial loans must maintain records or other data relating to those loans for a period of no less that ___ year(s), in order to

a. 3, keep statistics on the ethnic makeup of their client roster
b. 1, prove compliance with FCRA & TIL
c. 1, prove compliance with the ECOA
d. 3, show evidence of yearly volume

A

c. 1, prove compliance with the ECOA

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13
Q

Entities making residential mortgage loans must maintain records or other data relating to those loans for a period of no less than ___, in order to ____.

a. 2 years, keep statistics on the ethnic makeup of their client roster
b. 25 months, prove compliance with the ECOA
c. 1 year, prove compliance with FCRA & TIL
d. 5 years, show evidence of average yearly volume

A

b. 25 months, prove compliance with the ECOA

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14
Q

How many years does a consumer have to take civil action against a creditor suspected of violating the ECOA?

a. 5
b. 3
c. 2
d. 1

A

c. 2

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15
Q

If a borrower is denied a loan request due to the credit score not meeting lender’s guidelines, what must be done next?

a. the borrower must be verbally informed
b. mail a copy of credit with instructions to dispute scoring
c. initiate an adverse action notice
d. make a counter offer of loan terms

A

c. initiate an adverse action notice

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16
Q

Once a loan app is complete accord to ECOA, a credit decision must be made within:

a. 30 days
b. 60 days
c. 90 days
d. not defined

A

a. 30 days

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17
Q

The term ______ does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is either delinquent or in default or where additional credit would exceed a previously established credit limit.

a. reverse action
b. adverse action
c. delinquency
d. redlining

A

b. adverse action

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18
Q

Under ECOA, how long must one keep mortgage records?

a. 12 months
b. 25 months
c. 36 months
d. 2 years

A

b. 25 months

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19
Q

Under ECOA, what information must be sent to a borrower, in writing, who has been denied?

a. name of CRA & issue with appraisal
b. name & address of lender & federal agencies who ensure compliance
c. name & address of applicant & credit scores
d. name, address or originator, & unique identifier

A

b. name & address of lender & federal agencies who ensure compliance

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20
Q

What agency governs ECOA?

a. federal reserve board of governors
b. HUD
c. FDIC
d. federal housing agnecy

A

a. federal reserve board of governors

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21
Q

What entity provides guidelines & rules for ECOA?

a. HUD
b. federal reserve board
c. federal bank & loan board
d. fannie mae

A

b. federal reserve board

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22
Q

What is permissible to ask about for ECOA?

a. the acct on the credit report for which another person is liable
b. the applicant’s child bearing intents
c. marital status
d. religion

A

c. marital status

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23
Q

What is the primary purpose of ECOA?

a. to ensure applicants have equal access to credit
b. to ensure credit information is reported equally
c. to require disclosure of closing costs
d. to require clear disclosure of credit terms

A

a. to ensure applicants have equal access to credit

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24
Q

When can you ask about religion under ECOA?

a. it is required for HMDA date reporting
b. when the borrower notes that he does not wish to furnish a 1003
c. when there is a business purpose to ask
d. never, under no circumstance

A

d. never, under no circumstance

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25
Q

When can you discriminate against age?

a. when the person is collecting social security
b. when the person is 82 years old & is requesting a 30 year mortgage
c. when the person is too young to sign contracts
d. no age disclination ever

A

c. when the person is too young to sign contracts

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26
Q

What is the average origination fee at the time of a transaction?

a. 1
b. 2
c. 3
d. 4

A

a. 1

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27
Q

A loan officer normally makes between $2,000-$5,000 per deal. He does a loan for his cousin & charges a $500 fee, plus receives .50% in YSP for a $500k loan.

a. the loan officer has acted legally & ethically & shown no preferential treatment
b. the loan officer has acted illegally & ethically & shown no preferential treatment
c. the loan officer has acted legally & unethically & shown no preferential treatment
d. the loan officer has acted illegally & unethically & shown preferential treatment

A

a. the loan officer has acted legally & ethically & shown no preferential treatment

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28
Q

A loan originator is doing the loan for a family member, and his company requires he makes $5,000 on every loan. he charges $5,000 on the front end and earns 1$ YSP ($3,000). What the loan originator is doing for his family is:

a. legal/ethical
b. illegal/unethical
c. illegal/unethical
d. legal/unethical

A

d. legal/unethical

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29
Q

A responsible broker _____ arranges co-singed mortgages.

a. always
b. never
c. sometimes
d. who knows

A

c. sometimes

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30
Q

A self employed borrower says most of his money is ran through his business & asks, “How much money do I need to qualify” what is the best response?

a. can your accountant prepare a YTD P&L?
b. what is the greatest amount ever earned?
c. let’s take a look at your taxes & bank stmts to determine your income
d. what is the lowest amount of income reported in the last 3 years

A

c. let’s take a look at your taxes & bank stmts to determine your income

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31
Q

A self-employed borrower is applying for a mortgage loan. During the loan application he asks, “how much income do i need to show in order to qualify for this loan?” what is the most ethical response?

a. as must as possible. what do you claim on tax return?
b. you shouldn’t show less that $5,300 per month.
c. let me ask the underwriter for a minimum amount
d. lets review your tax returns & bank stmts to determine your income

A

d. lets review your tax returns & bank stmts to determine your income

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32
Q

A vendor taking advantage of the consumer by charging unjustly high prices through fraud or loack of alternatives is called:

a. unbundling
b. price gouging
c. padding recording fees
d. balloon payment

A

b. price gouging

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33
Q

Balloon payment laons are ______ predatory loans.

a. always
b. not always
c. never
d. idk

A

b. not always

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34
Q

Charging borrowers above the legally set rate for this step in the loan process is:

a. price gouging
b. inflated appraisal costs
c. unbundling
d. padding fees

A

d. padding fees

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35
Q

Duplicating costs that should be included under other charges is ____.

a. unbundling
b. price gouging
c. padding recording fees
d. inflated appraisal costs

A

a. unbundling

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36
Q

If a child misses payments on a loan co-signed by her parents, whose credit will be affected?

a. only the child
b. the parents only
c. both
d. no ones

A

c. both

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37
Q

Predatory lending increased greatly in the ___.

a. 60s
b. 70s
c. 80s
d. 90s

A

d. 90s

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38
Q

Pushing subprime products upon vulnerable or underserved groups for reasons other than credit quality is ____.

a. steering
b. subprime lending
c. reverse redlining
d. contract knavery

A

a. steering

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39
Q

What is meant by the term “ethics”?

a. an overall system of beliefs or values which help us decide right & wrong, good & bad
b. specific rules that tell us how to behave morally
c. the goal of good behavior
d. the actions we take & the decisions we make that reflect a system of beliefs

A

d. the actions we take & the decisions we make that reflect a system of beliefs

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40
Q

When is it acceptable to forge a borrower’s signature on loan docs?

a. when it is in the best interest of time & ease for the borrower
b. never
c. when the borrower says it’s okay
d. when it is office policy

A

b. never

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41
Q

Which of the following is NOT a sign of predatory lending?

a. full disclosure of the loan terms
b. credit insurance is tacked on w/o explanation
c. equity will be lost in the home
d. the consumer is encouraged to sign over the deed to his house

A

a. full disclosure of the loan terms

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42
Q

Who reaps the benefits of ethical behavior in mortgage transaction?

a. the borrower & the broker
b. the mortgage industry
c. just the borrower
d. everyone

A

d. everyone

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43
Q

Affiliates wishing to use consumer information for meeting purposes may do so if they either inform the consumer of the marketing or the consumer was given a chance to:

a. receive a discount
b. opt out
c. close their loan
d. rescind

A

b. opt out

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44
Q

FACTA amends the:

a. patriot act
b. fair credit report act
c. bill of rights
d. truth in lending act

A

b. fair credit report act

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45
Q

FACTA was an update & amendment to which of the following?

a. real estate settlement procedures act
b. fair credit reporting act
c. home ownership affordability & stability program
d. USA patriot act

A

b. fair credit reporting act

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46
Q

Which of the following need NOT be included on the credit score disclosure?

a. alternative consumer reporting agencies that may be used
b. the range of possible credit scores under the model used
c. the date the credit score was created
d. the consumer’s current credit score

A

a. alternative consumer reporting agencies that may be used

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47
Q

Which of the following was NOT covered in FACTA?

a. risk-based pricing notices
b. disclosure of credit scores
c. customer dispute resolution
d. telemarketing/do not call

A

d. telemarketing/do not call

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48
Q

An adverse action would contain all of the following except:

a. credit reporting agencies
b. credit scores
c. reason for denial
d. loan request information

A

b. credit scores

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49
Q

How many days does a lender have to disclose the reason for denial if requested by the borrower?

a. 30
b. 60
c. 90
d. 120

A

a. 30

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50
Q

If a wholesale lender has denied your client & a notice of adverse action letter has been faxed to the broker; what is the broker’s responsibility?

a. forward it to the borrower immediately
b. shred it to protect the client’s confidentiality
c. place it in the client’s file
d. idk

A

a. forward it to the borrower immediately

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51
Q

What does FCRA stand for?

a. fair credit regulation admin
b. the republican party
c. it is a credit score abbreviation
d. fair credit reporting act

A

d. fair credit reporting act

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52
Q

What is the primary purpose of FCRA?

a. to require credit reporting agencies to purge old data
b. to ensure equal access to credit
c. to ensure accuracy & fairness of credit reporting
d. to require clear disclosure of credit terms

A

c. to ensure accuracy & fairness of credit reporting

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53
Q

Who oversees credit card issuers?

a. FHA
b. FRB
c. HUD
d. FCCTC

A

b. FRB

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54
Q

A condition that would make fraud more likely to occur in a mortgage company includes:

a. weak oversight from management
b. a thriving market
c. strong auditing
d. trustworthy colleagues

A

a. weak oversight from management

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55
Q

If an unethical broker has a borrower sign a blank loan app, he is possibly trying to pull what scams?

a. steering
b. reverse redlining
c. falsified loan app, unverified income
d. incapacitated borrower scheme

A

c. falsified loan app, unverified income

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56
Q

A copy of the HUD-1 settlement statement can be used to verify the net proceeds from the sale of real estate. Which of the following could be a warning sign of a potential problem?

a. a reference is made to secondary financing
b. there is cash given to the borrower in the amt of $300 or less
c. the date of settlement is delayed
d. the sales price differs from the sales contract

A

d. the sales price differs from the sales contract

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57
Q

If a mortgage originator assist a borrower or an appraiser in fraudulent activity, that originator:

a. could be indicted as a conspirator
b. would be viewed as a victim would be in NO trouble as it is
c. appraiser that is bound to behave ethically
d. idk

A

a. could be indicted as a conspirator

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58
Q

If the sn on the credit report is invalid or differs from the loan app, the borrower may be ____.

a. an illegal alien
b. deceased
c. using a false identity
d. an undercover police officer

A

c. using a false identity

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59
Q

The practice of sneaking a burdensome provision into the loan contract without the borrower’s knowledge is known as what?

a. equity stripping
b. steering
c. contract knavery
d. price gouging

A

c. contract knavery

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60
Q

What is a “straw buyer”?

a. a buyer who is a victim of identity theft
b. a buyer who intends to purchase property but does not intend to occupy it
c. a buyer who accepts a fee for the use of his / her ssn & other personal info on a mortgage app
d. a buyer that travels extraordinary distances on foot in search of a brain

A

c. a buyer who accepts a fee for the use of his / her ssn & other personal info on a mortgage app

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61
Q

What won’t happen if fraud is found in a loan?

a. the interest rate will increase on the loan
b. the loan will be forgiven
c. the note is called due
the originator’s company will have to repurchase the loan

A

b. the loan will be forgiven

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62
Q

When you are working a deal with a real estate agent, you inquire about a carry back. The real estate agent tells you to just call the title company & have them draw up something that looks good. What should the next step of the originator be?

a. notify the authorities
b. create the terms you think the parties would accept & inform title company
c. tell the real estate agent to draft the second mortgage
d. double your fee

A

a. notify the authorities

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63
Q

Which of the following could be a red flag for a borrower that is using a property as an investment instead of their primary residence?

a. live in a different state
b. live in the same neighborhood
c. new residence is significantly smaller than previous residence
d. new residence is significantly larger

A

b. live in the same neighborhood

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64
Q

Which of the following is NOT an example of fraud?

a. shotgunning
b. use of a straw buyer
c. stated income loans
d. silent seconds

A

c. stated income loans

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65
Q

If a mortgage originator assists a borrower or an appraiser in fraudulent activity, that originator:

a. could be indicted as a conspirator
b. would be viewed as a victim
c. would be in no trouble as it is the appraiser that is bound to behave ethically
d. idk

A

a. could be indicted as a conspirator

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66
Q

$125K sales price, $80K 1st mortgage, $24,500 2nd morggage, & $137K appraised value. What is the LTV & CLTV?

a. 64/84
b. 58/79
c. 58/84
d. 64/79

A

a. 64/84

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67
Q

$237K sales pirce, $10,000 deposit, & 20% down payment. How much more does the borrower need to bring to closing for the down payment in addition to the deposit?

a. $47,400
b. $37,400
c. $57,400
d. $13,700

A

b. $37,400

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68
Q

30/15 and 180/360 represent what type of loan?

a. balloon mortgage; 30 year amortization with 15 year balloon
b. balloon mortgage; 15 year amortization with 30 year balloon
c. FHA loan
d. Conventional loan

A

a. balloon mortgage; 30 year amortization with 15 year balloon

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69
Q

A 3/1 is a(n):

a. traditional mortgage product
b. ARM
c. pay option arm
d. fixed rate after 3 year buy-down period

A

b. ARM

70
Q

A borrower elects to have a 2/1 buydown on an FHA loan at 6.5% fixed interest rate. The loan will have an interest rate that is permanent at?

a. 4.5%
b. 5.5%
c. 6.5%
d 8.5%

A

c. 6.5%

71
Q

A borrower has 40% DTI ration, $500 in monthly debts, & $5k in monthly income. What is the highest PITI the borrower can qualify for?

a. $1,000
b. $1,500
c. $2,000
d. idk

A

b. $1,500

72
Q

For a vet who qualifies for a VA loan, the amt the VA will guarantee is called:

a. entitlement
b. sponsorship
c. dd214
d. certificate of reasonable value

A

a. entitlement

73
Q

For which fo the following reasons would it be permissible to refuse to take an app from a potential borrower?

a. you don’t click with the applicant & would rather not do business with him/her
b. the lender doesn’t accept apps from the area where the borrower lives
c. the borrower has alluded to the fact that he/she is submitted false docs in order to qualify for a larger loan
d. the applicant has poor credit & you dnt feel there is any way he/she swill meet the lender guidelines

A

c. the borrower has alluded to the fact that he/she is submitted false docs in order to qualify for a larger loan

74
Q

How many days does a seller have to wait to sell a home for profit if the new homebuyer is using a FNMA loan product?

a. 1 day
b. 3 days
c. 10 days
d. 0 days

A

d. 0 days

75
Q

How many days do you have to send out the appraisal disclosure notice?

a. 7 days
b. 10 days
c. 30 days
d. by time of closing

A

c. 30 days

76
Q

How much can the APR change on a loan prior to closing without having to redisclose the APR?

a. .05%
b. .125%
c. .25%
d. APR does not need to be redisclosed until closing

A

b. .125%

77
Q

How much is 7 months of interest for a $200k loan at 5% interest?

a. $5,833
b. $11,666
c. $2,917
d. $583

A

a. $5,833

78
Q

How often must a lender update his Do Not Call Registry database?

a. every 30 days
b. every 60 days
c. every 31 days
d. every 90 days

A

c. every 31 days

79
Q

How soon must a borrower occupy the home on a primary residence?

a. 30 days
b. at time of closing
c. 60 days
d. 90 days

A

c. 60 days

80
Q

If a borrower is purchasing a home with a FHA loan & the home requires Flood Insurance, how long is teh rescission period after closing?

a. 3 days
b. 5 days
c. 0 days
d. 10 days

A

c. 0 days

81
Q

If a borrower received $1,200 in rent each month on a duplex that is being purchase as an investment property, what percentage is the vacancy factor?

a. 75%
b. 25%
c. 10%
d. known as occupancy factor

A

b. 25%

82
Q

If a borrower takes a 2/1 buy down with a start rate of 4.5, what is his note rate?

a. 3.5%
b. 4.5%
c. 6.5%
d. 5.5%

A

c. 6.5%

83
Q

If a borrower takes a 2/1 buy down with a start rate of 4.5, what is his rate during the 2nd year?

a. 3.5%
b. 4.0%
c. 5.0%
d. 5.5%

A

d. 5.5%

84
Q

If a lender agrees to subordinate a loan, what has occurred?

a. the borrower has obtained a second mortgage/lien
b. the borrower has a late payment reflected on his credit report
c. a loan has been paid in full
d. a loan has been approved

A

a. the borrower has obtained a second mortgage/lien

85
Q

If a mortgage is placed on a property that already has a first lien, that second mortgage is considered to be which of the following?

a. junior
b. senior
c. unsecured
d. unencumbered

A

a. junior

86
Q

If a servicer receives a “qualified written request” from a borrower for info about an account, the services must research the borrower’s inquiry & come to a decision as to whether there is indeed an error within how may business days after receiving the request?

a. 20 business days
b. 30 business days
c. 60 business days
d. 90 business days

A

c. 60 business days

87
Q

If the borrower has less than a __ down payment, MI is required. Usually the lenders will submit the loan package to a Mortgage guaranty insurer t the same time the lender is underwriting the loan.

a. 10%
b. 15%
c. 20%
d. 25%

A

c. 20%

88
Q

In a bi-weekly mortgage payment plan, how may extra mortgage payments are made every year?

a. 1
b. 2
c. 1.5
d. 3

A

a. 1

89
Q

In order for a mortgage to be valid & enforceable, it…

a. is signed by both the mortgagee & mortgagor
b. gives the borrower rights to occupy the property
c. gives the creditor property use rights
d. describes the borrowers loan terms

A

a. is signed by both the mortgagee & mortgagor

90
Q

Instead of mortgage insurance, every VA loan includes what type of fee?

a. funding fee
b consulting fee
c. app fee

A

a. funding fee

91
Q

Mortgage backed securities are a product of which of the following?

a. secondary market
b. primary market
c. jumbo market
d. stock market

A

a. secondary market

92
Q

On the 1003, what info is asked for government monitoring purposes?

a. race & sex
b. marriage, age & DOB
c. country of origin
d. if there have been any federal judgments

A

a. race & sex

93
Q

Once a loan is closed, the borrower must occupy within:

a. 15 days
b. 30 days
c. 45 days
d. 60 days

A

d. 60 days

94
Q

Out of the loans below, which has mandatory MIP?

a. all loans with less than 20% down payment
b. FHA loans
c. HELOC
d. VA

A

b. FHA loans

95
Q

Sales price is $292k, buyer is putting down 20% and seller is paying 4% for the buyer’s closing costs. How much is the seller paying for the buyer’s costs?

a. $4,667
b. $9,344
c. $11,680
d. $58,400

A

c. $11,680

96
Q

SRP is:

a. paid to a broker for originating a loan at above par interest rate
b. paid to a lender & represents the value of the servicing
c. illegal, unless disclosed on the GFE
d. standard retail pricing

A

b. paid to a lender & represents the value of the servicing

97
Q

the 4 Cs: character, Capacity, Credit & Collateral. What is capacity?

a. the probability of future repayment based on past history
b. the value of the real property pledged as security
c. the ability to make the payment (income & assets)
d. the general values of the applicant demonstrated by payment history

A

c. the ability to make the payment (income & assets)

98
Q

The acronym PFC stands for:

a. paid from closing
b. prepayment penalty
c. prequalification of credit
d. prepaid finance charge

A

d. prepaid finance charge

99
Q

The below loan has an assumable clause:

a. jumbo loans
b. conforming loans
c. FHA loans for low income families
d. VA loans

A

d. VA loans

100
Q

The Cost of Funds Index is traditionally used to determine interest rates on waht type of loans?

a. 360 month mortgage-Fixed rates
b. rate adjustments on adjustable rate programs
c. reverse mortgage
d. HELOC

A

b. rate adjustments on adjustable rate programs

101
Q

The definition of a conventional mortgage is:

a. a loan that is not an FHA, VA or RHS mortgage
b. a loan that is an FHA, VA, or RHS mortgage
c. the loan meets Fannie or Feddie guidelines
d. the loan fails to meet FNMA guidelines

A

a. a loan that is not an FHA, VA or RHS mortgage

102
Q

The term “30 basis points” expressed as percentatge is?

a. .03%
b. .30%
c. 3.00%
d. 30.00%

A

b. .30%

103
Q

There are 3 usual approaches to determining the fair market value of a property: Which one does not belong?

a. income
b. market
c. cost
d. sales

A

b. market

104
Q

This loan product is typically for borrowers over 62 years old who have built substantial equity or have paid their home in full & wish to cash out the equity in their home.

a. graduated payment mortgage
b. reverse annuity mortgage
c. home equity line of credit
d. new construction loan

A

b. reverse annuity mortgage

105
Q

USDA loans are primarily for properties located in:

a. urban areas
b. metro areas
c. suburban areas
d. rural areas

A

d. rural areas

106
Q

USDA, FHA & VA are all purchased by which of the following?

a. freddie mac
b. ginnie mae
c. FTC
d. federal reserve

A

b. ginnie mae

107
Q

VA loans require which of the following?

a. VA value cert
b. flood insurance
c. pest inspection
d. VA funding fee

A

d. VA funding fee

108
Q

Waht are teh differences between freddie, fannie & GNMA?

a. Freddie & Fannie are FSEs & GNMA is not
b. Fannie is GSE, while freddie & GNMA are not
c. Freddie is GSE, while Fannie & GNMA are not
d. What the heck is GSE?

A

a. Freddie & Fannie are FSEs & GNMA is not

109
Q

What are the words behind the acronym APR?

a. average Perion’s rate
b. another person’s rate
c. annual percentage rate
d. annual precipitation rate

A

c. annual percentage rate

110
Q

What best describes discount points paid on a mortgage loan?

a. fee pad by borrower for broker to place loan
b. permanently buys down rate
c. temporary rate buy down (typically 2 years)
d. points paid by seller to buy down rate

A

b. permanently buys down rate

111
Q

What best describes the COFI index?

a. cost of funds index
b. interbank offered rate
c. most common HELOC index
d. combined with COFI margin forms GNMA fully indexed rate

A

a. cost of funds index

112
Q

What does POC mean?

a. previously occupied condominium
b. paid outside of closing
c. paid off creditor
d. previously offered credit

A

b. paid outside of closing

113
Q

What does the acronym USDA represent?

a. unite state dept of architecture
b. united state dept of america
c. united state dept of agriculture
d. unite state dept of archeolgy

A

c. united state dept of agriculture

114
Q

What does the FHA do?

a. guarantee mortgages
b. insures mortgages
c. underwrites
d. fund

A

b. insures mortgages

115
Q

What does the VA do for a loan?

a. insure
b. guarantee
c. fund
d. approve

A

b. guarantee

116
Q

What does title insurance cover or protect against?

a. any unpaid liens prior to the borrower purchasing the property
b. any unpaid liens on the new owner
c. any unpaid taxes on title
d. covers the cost of improvements

A

a. any unpaid liens prior to the borrower purchasing the property

117
Q

What entity insures FHA loans?

a. fair housing authority
b. federal housing admin
c. first-time homeowner’s act
d. none of the above

A

b. federal housing admin

118
Q

What factor do lenders analyze in order to determine if a borrower will be financially able to meet the demands of a loan repayment?

a. amount of the loan request
b. existing debt
c. LTV
d. length of loan terms

A

b. existing debt

119
Q

What is a conventional loan?

a. FHA
b. any loan not insured by the government
c. VA
d. USDA

A

b. any loan not insured by the government

120
Q

What is a JUMBO loan?

a. a loan that exceeds the max loan limits backed by FNMA & FHLMC (loans in excess of $417,000)
b. a loan that exceeds the max loan limits backed by FNMA & FHLMC (loans in excess of $317,000)
c. a loan that exceeds the minimum loan limits backed by FNMA & FHLMC (Loans in excess of $317,000)
d. a loan that exceeds the minimum loan limits backed by FNMA & FHLMC (loans in excess of $417,000)

A

a. a loan that exceeds the max loan limits backed by FNMA & FHLMC (loans in excess of $417,000)

121
Q

What is a short sale?

a. when the lender agrees to an increase payoff of a loan when the subject property is sold
b. when the lender agrees to a reduced payoff on a loan when the subject property is sold
c. the borrower agrees to a reduced payoff on a loan when the subject property is sold

A

b. when the lender agrees to a reduced payoff on a loan when the subject property is sold

122
Q

What is FNMA’s primary purpose in the secondary market?

a. fund loans once they are processed & closed
b. underwrite a loan
c. originate loans
d. provide a source of funds for lenders

A

d. provide a source of funds for lenders

123
Q

What is one of the many roles of the Federal Housing Admin?

a. approves loans
b. guarantees loans
c. insures loans
d. services loans

A

c. insures loans

124
Q

what is required for a FNMA 4-Plex investment property?

a. 5% down payment
b. rents need to be equal or greater than the payment
c. 6 months reserves
d. 33% MI coverage

A

c. 6 months reserves

125
Q

What is the 2009 conforming loan limit for a one-family property?

a. $317,000 (this goes up to $625,500 for high cost areas)
b. $417,000 (this goes up to $625,500 for high cost areas)
c. $417,000 (this goes up to $525,500 for high cost areas)
d. $517,000 (this goes up to $625,500 for high cost areas)

A

b. $417,000 (this goes up to $625,500 for high cost areas)

126
Q

What is the definition of a “business day”?

a. all days that substantially creditor’s functions are open for business
b. all days that substantially creditor’s function are open for business, excluding federal holidays
c. Monday through Saturday, excluding federal holidays
d. when most creditor’s functions are open for RESPA, & Monday - Saturday, excluding federal holidays under TILA

A

d. when most creditor’s functions are open for RESPA, & Monday - Saturday, excluding federal holidays under TILA

127
Q

What is the funding fee on a USDA loan?

a. 2%
b. 1.5%
c. 3%
d. 1%

A

a. 2%

128
Q

What is the maximum entitlement amount for a veteran?

a. $34,500
b. 33,000
c. $42,000
d. $36,000

A

d. $36,000

129
Q

What is the max gross adjustment on the appraisal?

a. 10% for lot value
b. 10% for each line
c. 15%
d. 25%

A

d. 25%

130
Q

What is the max LTV for FHA loans?

a. 97%
b. 90%
c. 90%
d. 96.5%

A

d. 96.5%

131
Q

What is the only term for a USDA loan?

a. 30
b. 27
c. 20
d. 15

A

a. 30

132
Q

What is the primary purpose of Fannie Mae?

a. manage interest rates for the Federal Reserve board
b. manage interest rates for treasury
c. provide mortgage market liquidity
d. deliver FHA loans in MBSs

A

c. provide mortgage market liquidity

133
Q

What is the term for when a title changes owners?

a. foreclosure
b. forbearance
c. conveyance
d. reconveyance

A

c. conveyance

134
Q

What is used to determine the interest rate change on an ARM?

a. index only
b. YSP
c. SRP
d. index & margin

A

d. index & margin`

135
Q

What is used to determine the value of a home when doing a VA loan?

a. AVM
b. certificate of reasonable value
c. certificate of market value
d. drive-by appraisal

A

b. certificate of reasonable value

136
Q

What score do you need to pass the SAFE test?

a. 85%
b. 75%
c. 80%
d. 70%

A

b. 75%

137
Q

What 3 items best describes what a lender/underwriter should consider when making a credit decision?

a. credit, income, & age
b. income, credit & term
c. credit, capacity, & collateral
d. debt, dependents, & income

A

c. credit, capacity, & collateral

138
Q

What transfers or changes ownership interest in real property from one person to another person?

a. reconveyance
b. convey
c. transmittal
d. HUD-1

A

b. convey

139
Q

What type of loan would not have to be repurchased?

a. non-recourse loan
b. no bid loan
c. recourse loan
d. commercial loan

A

b. no bid loan

140
Q

When a borrower reaches 62 yo & he has significant equity in his home, which of the following mortgage programs would best assist that person if he is in need of additional living expenses, access to funds for home repair or other needs?

a. HELOC
b. HECM
c. swing-loan
d. ARM

A

b. HECM

141
Q

When a loan app is denied how many days does a borrower have to request a copy of the appraisal report?

a. 7
b. 30
c. 60
d. 90

A

d. 90

142
Q

Where would the reset period for an ARM be shown?

a. note, TIL & DOT
b. mortgage only
c. HUD-1 & GFE only
d. HUD-1 & ARM rider

A

a. note, TIL & DOT

143
Q

Which appraisal approach is most commonly used for an owner occupied property?

a. sales comparison approach
b. cost approach
c. income approach
d. inflated value approach

A

a. sales comparison approach

144
Q

Which best describes an FHA loan?

a. a loan that is funded by the FHA
b. a loan that is made on an investment property
c. a loan that is backed by the federal government
d. a loan that requires no down payment

A

c. a loan that is backed by the federal government

145
Q

Which FNMA for number is known as the transmittal summary?

a. 1003
b. 506t
c. 1099
d. 1008

A

d. 1008

146
Q

Which form number represents the Request for a Copy of Tax Transcripts?

a. 4605T
b. 4065T
c. 4506T
d. 4650T

A

c. 4506T

147
Q

Which loan is assumable?

a. conventional ARM
b. FHA loan
c. VA loan
d. both b & c

A

d. both b & c

148
Q

Which of hte following best defines a loan that doesn’t meet the loan limits of FNMA & FHLMC?

a. non conforming
b. conventional loans
c. subprime loans
d. FHA & VA

A

a. non conforming

149
Q

Which of the following fees affect the APR?

a. discount point paid by the seller
b. appraisal fee
c. processing fee
d. credit report fee

A

c. processing fee

150
Q

Which of the following is another term for jr lien?

a. first mortgage
b. subordinate lien
c. HELOC
d. reverse mortgage

A

b. subordinate lien

151
Q

Which of the following is defined as the cost of credit expressed as $ amount?

a. APR
b. finance charge
c. DTI
d. escrow impounds

A

b. finance charge

152
Q

Which of the following is not considered a draw back in a bi-weekly payment mortgage?

a. greater risk of late payments
b. each payment has an administrative service fee
c. bi-weekly programs offer lesser interest rates
d. borrower makes an extra payment each year

A

d. borrower makes an extra payment each year

153
Q

Which of the following loan programs does not require credit or income documentation and doesn’t require repayment?

a. reverse mortgage
b. stated income mortgage
c. HELOC mortgage
d. ARM mortgage

A

a. reverse mortgage

154
Q

Which of the following loan types is best described as a loan with a payment schedule made up of a series of small periodic payments & a larger lump sum due upon maturity?

a. balloon mortgage
b. reverse mortgage
c. ARM
d. due-on-sale clause

A

a. balloon mortgage

155
Q

Which of the following loans does not require annual or monthly mortgage insurance?

a. 15 year conforming loan at 90% LTV
b. 30 year FHA loan at 75% LTV
c. 15 year FHA loan at 85% LTV
d. 30 year conforming loan at 100% LTV

A

c. 15 year FHA loan at 85% LTV

156
Q

Which of the following loans might be used to finance a loan amount that is in excess of GSE’s loan limits?

a. subprime loans
b. jumbo loans
c. balloon loans
d. reverse mortgages

A

b. jumbo loans

157
Q

Which of the following real estate appraisal approaches considers the replacement value of the property?

a. sales approach
b. inflated value approach
c. cost approach
d. income approach

A

b. inflated value approach

158
Q

Which of the following terms defines the method in which a lien is removed from property when payment is made in full?

a. cure of default
b. acceleration
c. reconveyance
d. transmittal

A

c. reconveyance

159
Q

Which of the following terms specifically refers to a loan that is not obtained through a program of the federal government?

a. USDA loans
b. conforming loans
c. GNMA loans
d. VA & FHA loans

A

b. conforming loans

160
Q

Which of the following would address the principal & interest payments due on a loan?

a. margin
b. index
c. amortization schedule
d. life of the loan caps

A

c. amortization schedule

161
Q

Which of the following would best help an appraiser determine a home value?

a. pulling active listings within 3 miles of the subject
b. reviewing tax assessor records
c. closed sales similar to, and in close proximity to, the subject
d. finding out how much the subject sold for previously

A

c. closed sales similar to, and in close proximity to, the subject

162
Q

Which of the following would not be found on a credit report?

a. information available in public records
b. derogatory credit information
c. payments made to creditors who do not send data to a repository
d. credit balances relative to available credit

A

c. payments made to creditors who do not send data to a repository

163
Q

Which type of disclosure must have a statement that payment or loan terms can change?

a. good faith estimate
b. hud-1
c. adjustable rate mortgage disclosure
d. loan servicing disclosure

A

c. adjustable rate mortgage disclosure

164
Q

Which would be associated with an impound/escrow account?

a. reserves
b. mortgage insurance
c. escrow waiver fee
d. HD-1 statement

A

b. mortgage insurance

165
Q

Who gets a right to rescind notice when 2 borrowers are on the loan and both will owner-occupy the property?

a. all previous spouses or complete affidavit of divorce
b. both borrowers: each get 2 copies of the right to rescind & 1 disclosure
c. only one borrower gets the right to rescind but all borrowers get the disclosure
d. one notice & disclosure per borrower

A

b. both borrowers: each get 2 copies of the right to rescind & 1 disclosure

166
Q

Why are FHA loans beneficial to lenders?

a. they are insured by the federal government
b. no escrow is required
c. FHA loans are for low income families
d. they finance 100% of the sales price

A

a. they are insured by the federal government

167
Q

____ are mortgages that do not fully amortize due to the repayment terms of the loan.

a. reverse annuity mortgages
b. balloon mortgages
c. graduated payment mortgages
d. home equity line of credit

A

b. balloon mortgages

168
Q

Any non-public, personal information a customer offers to a financial institution (paper, electronic, or otherwise) that the institution or its affiliates handles or maintains is considered to be:

a. confidential information
b. safeguarded information
c. GLB information
d. customer information

A

d. customer information

169
Q

Under GLB, mortgage lenders & brokers, check cashers, pay day lenders & credit counselors are all examples of what?

a. depository institutions
b. financial institutions
c. regulatory agencies
d. banks

A

b. financial institutions

170
Q

Under GLB, mortgage lenders and brokers, check cashers, pay day lenders & credit counselors are all examples of:

a. depository institutions
b. financial institutions
c. regulatory agencies
d. banks

A

b. financial institutions

171
Q

After reviewing the trade off table, the borrower decides to accept the loan with the lower rate & higher settlement costs. What is the next step for this loan?

a. borrower must circle and initial the loan program in the tradeoff table.
b. the good faith estimate must be officially “withdrawn”
c. a new good faith estimate must be provided
d. all of the above

A

c. a new good faith estimate must be provided

172
Q

HUD estimates that the new disclosures will reduce settlement costs by ___ per transaction.

a. $250
b. $500
c. $700
d. $1,000

A

c. $700

Mortgage 101 (2 decks)

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