NMLS EXAM PART 4

Question 1

86. HOEPA is federal legislation enacted by Congress through amendments to:

Answer 1

86. TILA – amended in 1994 and found in section 32 of regulation Z

Question 2

87. What types of income are not taxed, and may be grossed-up? What IS taxed (and NOT grossed-up?
    ___________________________________

Answer 2

87. Social Security, public assistance, and disability; ALIMONY is taxed, and therefore cannot be grossed-up!

Question 3

88. RESPA applies to:___________________________________

Answer 3

88. Federally related mortgage loans

Question 4

89. When does a VA loan require two appraisals?

Answer 4

89. Never- servicemembers are exempt from this requirement.

Question 5

90. If a seller is offering a max concession to the buyer, and the buyer is putting more than 10% down, does the 6% come from the sale price or the loan amount?

Answer 5

90. The sale amount

Question 6

91. Who is responsible to pay for my surety bond? Me or AMC?

Answer 6

91. Either

Question 7

92. If a third-party affiliate charges $500 for a service, but the originator charges the client $800 and keeps the difference for himself,
    a. is this legal?
    b. Is it a violation?
    c. Of what rule?

Answer 7

92. This is a unilateral markup, which is legal, but may be a violation of RESPA and its fee-splitting rules.

Question 8

93. If an ad states a simple annual rate of interest and more than one simple annual rate of interest will apply over the term of the loan, the ad must:
    a. __________________________
    b. __________________________
    c. __________________________

Answer 8

93. If an ad states a simple annual rate of interest and more than one simple annual rate of interest will apply over the term of the loan, the ad must:
    a. clearly and conspicuously disclose each applicable simple annual interest rate,
    b. the period of time during which each rate will apply, and
    c. the annual percentage rate for the loan.

Question 9

94. RESPA applies to what kind of reverse loan?:

Answer 9

94. Single purpose reverse mortgage

Question 10

95. A type of reverse mortgage offered to low-income borrowers for a designated purpose, such as to pay taxes or to complete a home repair, is known as a:

Answer 10

95. Single purpose reverse mortgage

Question 11

96. Entities that have obligations under the Fair Credit Reporting Act include:

Answer 11

96. Entities that have obligations under the Fair Credit Reporting Act include:
    a. Credit Reporting Agencies;
    b. Furnishers of information to the Credit Reporting Agencies; and
    c. Users of Consumer Reports

Question 12

97. When would a license be suspended without a hearing?

Answer 12

97. If a licensee fails to request a hearing with the state regulator.

Question 13

98. If a buyer allows assumption of their VA loan, they may only use their VA privilege again after:

Answer 13

98. The original VA loan is satisfied

Question 14

99. Which section of the URLA contains questions which, depending on the applicant’s answer, could result in immediate rejection of the application?

Answer 14

99. The Declarations Section, which contains questions that have to do with other judgments, lawsuits, other financial obligations, alimony or child support, etc.

Question 15

100. The cheapest kind of reverse mortgage is called:

Answer 15

100. “Single Purpose” Reverse Mortgage (for low-income families to pay taxes, etc.)

Question 16

101. Notice of Adverse Action taken on a URLA that has been submitted is a disclosure of

Answer 16

101. ECOA, not RESPA

Question 17

102. Can a state licensing agency close down someone’s business while they look into possible problems with some loans the person originated?

Answer 17

102. No

Question 18

103. The Dodd-Frank Act listed the creation of financial education programs as one of the primary functions of:

Answer 18

103. The CFPB

Question 19

104. If a consumer files a complaint about an originator to a state licensing agency, how many days does the lender have to respond before the complaint is made public?

Answer 19

104. 15 days

Question 20

105. Under ECOA, what does an underwriter do if they see that child support payments have only been made sporadically?

Answer 20

105. Refuse to consider them as part of the income being considered for repayment ability.

Question 21

106. A Loan Estimate is required for:

Answer 21

106. All closed-end, federally related mortgage loans.

Question 22

107. Federal Agency that implements and enforces rules related to the origination of FHA loans:

Answer 22

107. HUD

Question 23

108. Loan origination fees, PMI premium, and commitment fees are all examples of:

Answer 23

108. Prepaid finance charges

Question 24

109. Homeowners Protection Act requires a disclosure for high-risk loans that essentially says:

Answer 24

109. Termination of PMI is automatic at the midpoint of the amortization schedule as long as the borrower is current on their payments

Question 25

110. What is the difference between state-licensed and registered loan originators?

Answer 25

110. Unlike state-licensed loan originators, registered loan originators are exempt from licensing requirements

Question 26

111. Which regulation specifies current disclosure requirements under TRID?

Answer 26

111. Regulation Z – TILA

Question 27

112. Do FHA loans have a due-on-sale clause?

Answer 27

112. No, because FHA loans are assumable.

Question 28

113. Which finance charge would NOT be calculated when determining the APR?

Answer 28

113. Title Insurance

Question 29

114. A lender’s Prime Rate is determined by whom?

Answer 29

114. The lender himself

Question 30

115. What document would CONVEY a property?

Answer 30

115. Warranty Deed

Question 31

116. What tax documents should be used to verify a self-employed person’s income?

Answer 31

116. Two years’ worth of 1040’s

Question 32

117. Under Regulation X, the term “loan originator” can be used to describe:

Answer 32

117. It can be either the originator or the mortgage broker

Question 33

118. Paying compensation for referrals is ______________,and a violation of __________ Law.

Answer 33

118. Unethical; federal

Question 34

119. When calculating the maximum loan amount available to a VA borrower, _________ is the term that would apply.

Answer 34

119. Entitlement

Question 35

120. The term “predominant value” on an appraisal refers to:

Answer 35

120. The most common sales price for the neighborhood

Question 36

121. In the Closing Disclosure, what question is required for each of the items in the Loan Terms table?

Answer 36

121. “Can this amount increase after closing?”

Question 37

122. A misleading representation, omission, act, or practice is considered deceptive when, among other conditions, it is:

Answer 37

122. Material