NMLS

Question 1

Mortgages that allow for more risk factors than are allowed for conforming loans sold on the secondary market.

Answer 1

Subprime Loan

Question 2

A loan that is a total fabrication property as a non-existent collateral, fictional buyers, or straw buyers.

Answer 2

Air Loan

Question 3

Bankruptcy type with a repayment plan…

Answer 3

Chapter 13 Bankruptcy

Question 4

Bankruptcy type with no repayment plan.

Answer 4

Chapter 7 Bankruptcy

Question 5

Secret agreement or cooperation among people, especially for deceitful or fraudulent purposes.

Answer 5

Collusion

Question 6

Places a credit file “on ice” by preventing the information from being reported to third parties, such as credit grantors and other companies. Lenders are not able to gain access to the credit file unless given permission by the account holder. The credit file can still be disclosed in certain situations, such as for companies (e.g., mortgage, credit card, cell phone) doing business with the account holder for collection agencies working for one of the companies.

Answer 6

Credit Freeze

Question 7

Property transferred with as forges seller’s signature.

Answer 7

Deed Scam

Question 8

A mortgage fraud scheme where the second mortgage is granted, often by a seller, and the buyer has no intention of paying it; often done to induce the lender to approve a higher loan amount. Once the transaction closes, then seller destroys the second mortgage.

Answer 8

Disappearing Second

Question 9

A mortgage fraud scam where a loan may: 1) be sold to a fraudulent company who will supposedly service the loan but really just steals the money, or 2) where the buyer signs multiple copies of the loan documents, which the4 loan originator submits to multiple lenders for the purpose of pocketing the duplicate loan amount.

Answer 9

Double Sold Loan

Question 10

For the purpose of RESPA, a thing of value is any payment, advance, funds, loan, service, or other consideration.

Answer 10

Thing of Value

Question 11

A description of an extension of the existing financing either through the same lender or through a new financial arrangement.

Answer 11

Refinancing

Question 12

When a buyer borrows money from another source in addition to the primary lender to pay for part of the purchase price or closing costs; usually requires a subordination agreement.

Answer 12

Secondary Financing

Question 13

A nonpossessory interest in property, giving a lien holder the right to foreclose if the owner does not pay a debt owed the lienholder; a financial encumbrance on the owner’s title.

Answer 13

Lien

Question 14

A transaction that occurred under the typical conditions in the marketplace where each of the parties were acting in their own interests.

Answer 14

Arm’s Length Transaction

Question 15

Recently sold properties with similar characteristics (size, room count, design, utility, etc.) that are in close proximity to the property being appraised. Also called comps.

Answer 15

Comparables

Question 16

A situation in the housing market when a large number of buyers are looking for housing in an area of limited availability.

Answer 16

Seller’s Market

Question 17

Person designated to receive benefits from a certain act, such as one who benefits from a trust.

Answer 17

Beneficiary

Question 18

Ongoing operating expenses that do not very based on occupancy levels of the property (e.g., taxes, insurance).

Answer 18

Fixed Expenses

Question 19

The government’s constitutional power to take (appropriate or condemn) private property for public use, as long as the owner is paid just compensation. (Government taking of private land is called condemnation.)

Answer 19

Eminent Domain

Question 20

A specific loan claimed by someone who performed work on the property (construction, repairs, or improvements) and has not been paid. This term is often used in a general sense, referring to materialmen’s liens as well as actual mechanic’s liens.

Answer 20

Mechanic’s Lien

Question 21

The difference between money made from an investment and the money actually invested.

Answer 21

Profit

Question 22

A vehicle for a borrower who has substantial equity in a property to convert that accumulated equity-at a cost-to cash and additional debt without selling the property and without making payments to the lender. Which a typical reverse mortgage, the balance o the loan rises as the borrower receives money from the lender and incurs interest to the outstanding loan balance. Also called a reverse equity mortgage or reverse annuity mortgage.

Answer 22

Reverse Mortgage

Question 23

Occurs when a mortgage loan is funded by an advance of loan funds and assignment of the loan to the same entity advancing the funds. Generally undertaken by correspondent lenders.

Answer 23

Table Funding

Question 24

An agreement between two or more parties to do or not do something. Contracts are legally enforceable promises with the law providing remedies for breach.

Answer 24

Contract

Question 25

A situation in the housing market when there are many homes available for sale, but few buyers.

Answer 25

Buyer's Market

Question 26

An easement created by open and notorious, hostile, and adverse use of another person's land for a specific period of time determined by the state law. Prescription use does not have to be exclusive (the owner may be using the property, too), and the user does not acquire title to the property. Also called prescriptive Easement.

Answer 26

Easement by Prescription

Question 27

An easement that benefits a person to company, rather than benefiting another Parcel of land.

Answer 27

Easement in Gross

Question 28

A physical object intruding onto neighboring property, often due to a mistake regarding the boundary.

Answer 28

Encroachment

Question 29

Any Claim, lien, charge, or liability that affects or limits the fee simple title to real property.

Answer 29

Encumbrance

Question 30

Money offered as an indication of good faith regarding the future performance of a purchase agreement.

Answer 30

Earnest Money

Question 31

As set forth by the SAFE Act, this term is defined as any activity that involves offering or providing real estate brokerage services to the public including: (1) Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of real property; (2) Bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property; (3) Negotiating on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property (other than in connection with providing financing with respect to any such transaction); (4) Engaging in any activity for which a person engaged in the activity is required to be registered as a real estate agent or real estate broker under any applicable law; and (5) Offering to engage in any activity, or act in any capacity, described in paragraphs (1), (2), (3), (4) of this definition.

Answer 31

Real Estate Brokerage Activities

Question 32

As set forth by the SAFE Act, this term is defined as any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling (as defined in section 103(w) of the Truth in Lending act) or residential real estate upon which is constructed or intended to be constructed a dwelling (as so defined).

Answer 32

Residential Mortgage Loan

Question 33

As set forth by the SAFE Act, this term is defined as any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands.

Answer 33

State

Question 34

As set forth by the SAFE Act, this term is defined as any individual who is a loan originator and is not an employee of (i)a depository institution; (ii)a subsidiary that us owned and controlled by a depository institution and regulated by a Federal banking agency; or (iii)an institution regulated by the Farm Credit Administration; and is licensed by a state or by the Director under section 5107 of this title and registered as a loan originator with, and maintains a unique identifier through, the National Mortgage Licensing System and Registry.

Answer 34

State-Licensed Loan Originator

Question 35

As set forth by the SAFE Act, this term is defined as a number or other identifier that (i)permanently identifies a loan originator; (ii)is assigned by protocols established by the NMLSR and the CFPB to facilitate electronic tracking of loan originators and uniform identification of, and public access to, the employment history of and the publicly adjudicated disciplinary and enforcement actions against loan originators; and (iii) shall not be used for purposes other than those set forth under this chapter.

Answer 35

Unique Identifier

Question 36

As set forth by Regulation H, this term is defined as when an individual receives a residential mortgage loan application for the purpose of facilitating a decision whether to extend an offer of a residential mortgage loan terms to a borrower or a prospective borrower (or to accept the terms offered by a borrower or prospective borrower in response to a solicitation), whether the application is received directly or indirectly from the borrower or prospective borrower.

Answer 36

Takes a Residential Mortgage Loan Application

Question 37

Party who originates, sells, and services mortgage loans and usually acts as the originator and servicer of loans on behalf of large investors, such as insurance companies, pension plans, or Fannie Mae. This organization may also be known as a Mortgage Banker.

Answer 37

Mortgage Lender

Question 38

The entity that collects monthly mortgage payments; pays taxes, insurance, and other items as they come due; and notifies the borrower of late payments.

Answer 38

Mortgage Servicer.

Question 39

As defined bye the NMLS, this term is used as a company's indication that the individual will conduct business under a specific license/registration for the company.

Answer 39

Sponsership

Question 40

As set fourth by regulation H, this term is defined as an individual whose manner and means of performance of work are subject to the right of control of, or are controlled by, a person and whose compensation for federal income tax purposes is reported, or required to be reported, on a W-2 form issued by the controlling person.

Answer 40

Employee

Question 41

As set fourth by regulation H, this term is defined as the independent federal agency authorized by the Farm Credit Act of 1971 that examines and regulates the Farm Credit System.

Answer 41

Farm Credit Administration

Question 42

As set fourth by the SAFE Act, this term is defined as the Board of Governors of the Federal Reserve System, the Office of the Comptroller or the Currency, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.

Answer 42

Federal Banking Agency

Question 43

As set forth by the SAFE Act, this term is defined as an individual who performs clerical or support duties at the direction of and subject to the supervision and instruction of a state-licensed loan originator or a registered loan originator.

Answer 43

Loan Processor or Underwriter

Question 44

As set forth by the SAFE Act, this term is defined as an individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain.

Answer 44

Loan Originator

Question 45

As set forth by the SAFE Act, this term is defined as the mortgage licensing system developed and maintained buy the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the state licensing and registration of state-licensed mortgage loan originators and the registration of mortgage loan originators pursuant to 12 U.S.C. 5107.

Answer 45

Nationwide Mortgage Licensing System and Registry

Question 46

As set forth by Regulation H, this term is defined as all residential mortgage loan-related activities from the taking of a residential mortgage loan application through the completion of all required loan closing documents and funding off the residential mortgage loan.

Answer 46

Origination of a Residential Mortgage Loan

Question 47

The ongoing relationship between a borrower and the entity that accepts the borrower's payments, pays taxes and insurance (if escrowed), and is the entity that the borrower works with in the event of loan default.

Answer 47

Mortgage Servicing

Question 48

A key element of the Housing and Economic Recovery Act of 2008 (HERA) designed to enhance consumer protection and reduce fraud by requiring states to establish minimum standards for the licensing and registration of mortgage loan originators.

Answer 48

Secure and Fair Enforcement for Mortgage License (SAFE) Act

Question 49

Course hours, approved by the NMLS, that must be completed prior to submitting an initial application for a mortgage loan originator license through the NMLS.

Answer 49

Pre-licensing Education

Question 50

As set forth by state model language for implementation of the SAFE Act, this term is defined as any real property located in (state), upon which is construction or intended to be constructed a dwelling.

Answer 50

Residential Real Estate

Question 51

As defined by the NMLS, this business activity is defined as providing the service of bringing borrowers and lenders together and assisting in negotiating a mortgage loan that gives the mortgagee a security right over all other mortgages of the mortgaged property.

Answer 51

First Mortgage Brokering

Question 52

As defined by the NMLS, this business activity is defined as acting as a lender or creditor by offering to provide funds to a borrower for a mortgage loan that gives the mortgagee a security right over all other mortgages of the mortgaged property.

Answer 52

First Mortgage Lending

Question 53

As defined by the NMLS, this business activity is defined as purchasing closed mortgages (that are not currently in default) with the intent to service or resell to others.

Answer 53

Mortgage Loan Purchasing

Question 54

As defined by the NMLS, this business activity is defined as acting as a lender for a loan secured by a lien on residential real estate in which the homeowner is not required to make payments on the loan until a specific event occurs (e.g. homeowner ceases to reside in the property).

Answer 54

Reverse Mortgage Lending

Question 55

As defined by the NMLS, this business activity is defined as providing the service of bringing borrowers and lenders together and assisting in negotiating a mortgage loan that has subordinate rights to a first mortgage.

Answer 55

Second Mortgage Brokering

Question 56

As defined by the NMLS, this business activity is defined as acting as a lender or creditor by offering to provide funds to a borrower for a mortgage loan that has subordinate rights to a first mortgage.

Answer 56

Second Mortgage Lending

Question 57

As defined by the NMLS, this business activity is defined as completing the mortgage loan application and supporting documentation for underwriting for an application your company did not take from the borrower.

Answer 57

Third Party Mortgage Loan Processing

Question 58

As defined by the NMLS, this business activity is defined as underwriting a mortgage loan application and supporting documentation for an application your company did not take from the borrower nor are funding.

Answer 58

Third Party Mortgager Loan Underwriting

Question 59

As defined by the NMLS, this term is typically used to signify the individual the represents a company and may be required to meet specific requirements. States may also refer to this individual as the "Qualified Person in Charge (QPIC)" or "Managing Principal."

Answer 59

Qualified Individual

Question 60

Party who, for a fee, originates loans on behalf of lenders but does not service such loans.

Answer 60

Mortgage Broker

Question 61

The Equal Credit Opportunity Act (ECOA)(15 USC S1691 et seq.) is a federal law passed in 1974 that ensures that all consumers are given an equal chance to obtain and maintain credit. ECOA is implemented through Regulation B (12 CFR S 1002) and enforced by the Consumer Financial Protection Bureau.

Answer 61

Equal Credit Opportunity Act

Question 62

The Federal Housing Administration (FHA) is a federal agency established in 1943 to increase home ownership by providing an insurance program to safeguard the lender against the risk of non-payment. The FHA is currently part of the Department of Housing and Urban Development (HUD).

Answer 62

Federal Housing Administration

Question 63

The federal Home Mortgage Disclosure Act (HMDA) of 1975(12 U.SC. 2801 et seq.) requires many depository and non-depository lenders to collect and publicly disclose information about housing-related loans and applications for such loans, including several applicant/borrower demographic characteristics. The HMDA is implemented by the Consumer Financial Protection Bureau's Regulation C (12 CFR Part 1003).

Answer 63

Home Mortgage Disclosure Act

Question 64

The Federal Reserve System (FRS) is a federal agency that oversees and regulates monetary policy, which in turn affects interest rates and the availability of credit. All federally chartered commercial banks must be members.

Answer 64

Federal Reserve System

Question 65

Regulation Z (12 CFR Part 1026) implements the Truth in Lending Act to protect people when they use consumer credit. Regulation Z covers topics such as annual percentage rates, credit disclosures, periodic statements, mortgage loan servicing requirements, and mortgage loan appraisal requirements.

Answer 65

Regulation Z

Question 66

State-charted banks, located mostly in the northeastern U.S., owned by depositors and operated for their benefit. Usually, a large portion of their assets are mortgages.

Answer 66

Mutual Savings Banks

Question 67

Take back or withdraw an offer or contract.

Answer 67

Rescind

Question 68

The compensation paid to someone in lieu of, or in addition to, regular salary. Commissions may be a flat or percentage of sale price, but can only be counted as income if they are consistent with an established 2-year history.

Answer 68

Commissions

Question 69

As defined by Regulation X, which implements RESPA, settlement means the process of executing legally binding documents regarding a lien on property that is subject to a federally related mortgage loan. This process may also be called "closing" or "escrow" in different jurisdictions.

Answer 69

Settlement

Question 70

The Fair and Accurate Credit Transactions Act of 2003, sometimes referred to as either the FACT Act or simply FACTA, amended the federal Fair Credit Reporting Act and is intended primarily to help consumers fight the growing crime of identity theft. The FACTA contains seven major titles: Identity Theft Prevention and Credit History Restoration; Improvements in Use of and Consumer Access to Credit Information; Enhancing the Accuracy of Consumer Report Information; Limiting the Use and Sharing of Medical Information in the Financial System; Financial Literacy and Education Improvement; Protecting Employee Misconduct Investigations, and Relation to State Laws.

Answer 70

Fair and Accurate Credit Transaction Act

Question 71

Federal National Mortgage Association (FNMA) is commonly known as Fannie Mae. This government-sponsored entity regulated by the Federal Housing Finance Agency is the largest buyer of existing mortgages in the secondary mortgage market.

Answer 71

Federal National Mortgage Association

Question 72

The Federal Home Loan Mortgage Corporation (FHLMC) is commonly known as Freddie Mac. It is a government-sponsored entity regulated by the Federal Housing Finance Agency that operates in the secondary mortgage market to purchase mortgage loans from lenders.

Answer 72

Federal Home Loan Mortgage Corporation

Question 73

This is a major federal law designed to assist with the revitalisation of the U.S. housing market that includes provisions related to foreclosure prevention and consumer protections, as well as establishing minimum standards for licensing and registration of mortgage loan originators.

Answer 73

Housing and Economic Recovery Act of 2008

Question 74

The Homeowners Protection Act of 1998 (HPA or PMI Cancellations Act) was signed into law on July 29, 1998, became effective on July 29, 1999, and was later amended on Dec. 27, 2000. This act establishes provisions for cancelling and terminating PMI, sets disclosure and notifications requirements, and requires the return of unearned premiums. The Dodd-Frank Act granted authority to the Consumer Financial Protection Bureau (CFPB) to supervise for and enforce compliance with the Homeowners Protection Act with respect to entities within its jurisdiction.

Answer 74

Homeowners Protection Act

Question 75

The government entity that regulates savings and Loans in the same manner the Federal Reserve regulates commercial banks.

Answer 75

Office of Thrift Supervision

Question 76

The federal Real Estate Settlement Procedures Act of 1974 (RESPA)(12 U.S.C. S2601 et seq.) became effective June 20, 1975. The U.S. Department of Housing and Urban Development (HUD) promulgated Regulation X (12 CFR Part 1024), which is now enforced and interpreted by the Consumer Financial Protection Bureau. The purpose of RESPA is to help consumers become better shoppers for settlement services and to eliminate unnecessary increases in the costs of certain settlement service due to kickbacks and referral fees.; RESPA also promotes transparency in the servicing of mortgage loans.

Answer 76

Real Estate Settlement Procedures Act

Question 77

This is a body of law that governs transactions involving personal property and sets requirements for negotiable instruments.

Answer 77

Uniform Commercial Code

Question 78

The federal Financial Services Modernisation Act of 1999, also known as the Gramm-Leach-Bliley Act (GLB Act), includes provisions in Title V to protect and regulate the disclosure of consumers' personal financial information. There are three principal parts to the Title V privacy requirements: Safeguards Rule, Pretexting Provisions, and Financial Privacy Rule.

Answer 78

Gramm-Leach-Bliley Act