NMLS PART 3 Flashcards
1
Q
- Do Ethics fall under state or federal law?
A
- Ethics (or “ethical issues”) are the basis of both state and federal law, and violating them may have legal consequences.
2
Q
- How many days:
a. A Loan Estimate? ______ business days after receipt of application
b. If a loan estimate is revised? ____ business days from consummation
c. An initial loan estimate before consummation? ____ business days
d. If a customer sends in a qualified written request? _____ business days
e. An appraisal disclosure for an HPML application? _____ business days
f. After application, Your Home Loan Tool Kit? _____ business days
g. After application, a Notice of Action Taken? ____ days
h. A Closing Disclosure before consummation? _____ business days prior
i. Notice of Incomplete Application – Within _______ days of application
j. After submitting a loan application and receiving a loan estimate does a customer have to indicate an intent to proceed? ______ business days
A
- How many days:
a. A Loan Estimate? 3 business days after receipt of application
b. If a loan estimate is revised? (4 business days from consummation)
c. An initial loan estimate before consummation? (7 business days)
d. If a customer sends in a qualified written request? (5 business days)
e. An appraisal disclosure for an HPML application? 3 business days
f. After application, Your Home Loan Tool Kit? 3 business days
g. After application, a Notice of Action Taken? 30 days
h. A Closing Disclosure before consummation? (3 business days prior)
i. After submitting a loan application and receiving a loan estimate does a customer have to indicate an intent to proceed? (10 business days)
j. If application is denied, the adverse action taken must be disclosed to the consumer within? 30 days
3
Q
- What is the most common “look-back period” to help find the index value that will be used to determine the fully-indexed rate?
A
- The most common “look-back period” is 45 days.
4
Q
- If a loan is a conventional loan but is nonconforming, it is a __________ loan.
A
- Jumbo
5
Q
- Homeowner’s Protection Act applies to:
a. ¬¬¬¬¬¬¬__________
b. __________
c. __________
d. But it does NOT apply to ____________
A
- HPA applies to:
a. Lenders
b. Loan Servicers
c. Insurers
d. (NOT appraisers)
6
Q
- Who is a person who regularly refers applicants to creditors, or selects or offers to select creditors to whom requests for credit can be made?
A
- Brokers
7
Q
- How long must a licensed originator maintain a valid license before having to re-take the NMLS exam?
A
- 5 years
8
Q
- Who is responsible for renewing a mortgage originator’s license?
A
- The originator himself! (not the employer/broker)
9
Q
- Under the S.A.F.E. Act, what must a loan originator submit to the NMLS?
A
- Reports of condition.
10
Q
- The S.A.F.E. Act requires that ________ has participation in NMLS, conducting background checks, and writing rules and regulations:
A
- A state licensing agency
11
Q
- In lien theory states, who holds the title to the home securing the mortgage throughout the loan term?
A
- The Borrower
12
Q
- The obligation to serve as the agent or fiduciary of the borrower is imposed by?
A
- State Licensing Laws in Some States
13
Q
- In order to contain a prepayment penalty, a mortgage must have the following 4 things:
a. Term of mortgage must be __________
b. DTI of _____________
c. Points and fees of ______________
d. Must have a ___________
A
- Prepayment penalties require:
a. 30 years or less
b. 43% or less
c. 3% or less
d. Fixed rate
14
Q
- Steering customers toward disadvantageous loans by misrepresenting info on their credit report is a violation of:
A
- FCRA
15
Q
- In ___________ Theory – borrower retains both legal and equitable title; the mortgage serves as a lien; judicial foreclosure needed in case of default
A
- Lien Theory – borrower retains both legal and equitable title; the mortgage serves as a lien; judicial foreclosure needed in case of default
16
Q
- In ___________ Theory – lender holds legal title until the debt is paid; no courts needed in case of default
A
- Title Theory – lender holds legal title until the debt is paid; no courts needed in case of default
17
Q
- The Promissory note includes:
a. _________
b. _________
c. _________
d. _________
e. _________
f. DOES NOT include: _________
A
- Promissory note includes:
a. Borrower’s name
b. Loan amount
c. Interest rate
d. Loan terms
e. Notices done in writing
f. DOES NOT include “legal description of the property”
18
Q
- A loan processor or underwriter is exempt from licensure if:
a.
b.
c.
d. He cannot take loans __________________ a loan originator. To do that, he must be _________. All he can do is ______________ work for licensed or exempt brokers or originators.
A
- Loan Processor is exempt from licensure if:
a. Is employed by a licensed mortgage broker
b. Is employed by an exempt mortgage broker
c. He does not represent to the public that he can perform any of the activities of a loan originator
d. He cannot take loans on BEHALF OF a loan originator. To do that, he must be licensed. All he can do is clerical/support stuff for licensed or exempt brokers or originators.
19
Q
- Failure to report data to HMDA can result in civil or monetary penalties of:
A
- Calculated based on consideration for good faith; previous violations; and financial resources of the entity involved.
20
Q
- HPML’s require all borrowers to receive _____________
A
- Homeownership counseling
21
Q
- Which Act requires a “Notice of Right to Cancel PMI”?
A
- Homeowners Protection Act
22
Q
- “E-Sign Act” stands for:
A
- E-signc ACT (Electronic Safety in Global and National Commerce Act)
23
Q
- An originator’s disciplinary records and any enforcement actions taken against an originator, along with information about an originator’s employment history are:
a. Confidential or non-confidential?
b. Public or non-public?
A
- Not confidential, and a matter of public record
24
Q
- What is the mathematical equation for a periodic rate?
A
- Annual Rate / number of payments in a year
25
Q
- What is needed to waive the waiting period between receipt of the HOEPA disclosures and consummation of the loan? And how long is the required waiting period?
A
- The 3 day waiting period can be waived if they submit in writing a signed request that describes the emergency and consents to the waiver.
26
Q
- Under the S.A.F.E. Act, who would NOT be required to be licensed in order to do the work of a loan originator?
A
- Any employee of a federal, state, or local government agency or housing finance agency who acts a loan originator in the course of their employment.
27
Q
- According to TILA, you must provide a customer with ______ before collecting an ________.
A
- Closing Estimate; origination fee
28
Q
- In the Comparisons table of the Loan Estimate, what is not included?
A
- The cost of PMI before it hits 78%
29
Q
- Under GLB Act, when is a customer relationship established?
A
- Upon receipt of the application
30
Q
- Who does a Loss Payee Clause protect?
A
- The lender in the event the property is damaged by fire or other risks
31
Q
- What is a Completion Notice
A
- A Completion Notice is required of an appraiser, typically to document the completion of new construction prior to closing a loan on the property.
32
Q
- What are three issues that could cloud a title or affect marketability when examining title documents?
a. _________
b. _________
c. _________
A
- 3 issues that could cloud a title:
a. Easements
b. Land Locks
c. Leaseholds
33
Q
- What is the difference between a licensed mortgage originator and a registered loan originator?
A
- A licensed loan originator is licensed by the State and is an employee of a non-depository institution, while a registered loan originator is employed by a depository institution (or Farm Credit Administration).
34
Q
- What are 3 riders or addendums that a deed of trust may contain?
a. _________
b. _________
c. _________
A
- 3 riders on a deed of trust?
a. Balloon rider
b. Prepayment penalty rider
c. Second-home rider
35
Q
- How many hours of ethics are required for continuing education?
A
- Two
