NMLS Prep Cards 277 Flashcards
Learn the National Test Exam for NMLS
1
Q
Which federal agency monitors compliance with the Equal Credit Opportunity Act?
A
Federal Trade Commission
2
Q
A creditor denied an applicant a loan. Which document must be sent to the applicant?
A
Adverse Action Notice
3
Q
What is the main purpose of the FCRA?
A
Create procedures to ensure confidentiality and accuracy of consumer credit information.
4
Q
A person found guilty of giving or accepting kickbacks under RESPA, may be fined up to _______ for each violation.
A
10,000 dollars
5
Q
The Gramm-Leach-Bliley Act is also known as the:
A
Financial Services Modernization Act.
6
Q
The sharing of non-public confidential information between financial institutions is addressed in the:
A
GLBA.
7
Q
The Truth in Lending Act is Title 1 of the:
A
Consumer Credit Act of 1968
8
Q
One of the most important laws protecting consumers’ identities and credit information is the:
A
Fair Credit Reporting Act.
9
Q
Which of the following situations would not apply to the SAFE Act?
A
An attorney who is negotiating the terms of a mortgage loan with a client
10
Q
What was the landmark legislation that launched Truth in Lending disclosures in 1968?
A
Consumer Credit Protection Act
11
Q
TILA is overseen by:
A
FRB - Federal Reserve Board
12
Q
One of the key safeguards of the Federal Fair Credit Reporting Act (FCRA) is:
A
running a consumer credit check without telling the subject violates FCRA and carries substantial civil penalties
13
Q
Which of the following financial information is not reflected on the TIL Statement?
A
Note rate
14
Q
According to HMDA, what must be forwarded to the regulator by March 1 of each year?
A
Loan/Application Register
15
Q
ontinuing education MLO survey course covers
A
3 hours Federal law, 2 hours ethics, 2 hours nontraditional mortgages, and 1 hour elective
16
Q
VA request for an appraisal is secured by form number
A
26-1805
17
Q
Discharge Papers issued by any US armed service
A
DD 214.
18
Q
VA Certificate of Eligibility form number is:
A
Form 26-8320
19
Q
maximum guaranty that the DVA will provide
A
entitlement.
20
Q
What form is used for the VA Income Verification Form?
A
26-6393
21
Q
What is the annual amount of PMI for a loan of $100,000 with a PMI factor of 35%
A
Correct answer is (c).
$100,000/100 x .35 - $350.
22
Q
What does HUD do?
A
HUD administers mortgage loan insurance through the FHA
HUD administers Section 8 rental assistance vouchers for low-income households
HUD enforces fair housing laws
23
Q
If one point raises an effective rate 1/8th% , then a 6 point discount will raise a 4 ¼ % loan to an effective rate of:
A
1 point equals 1/8%, therefore 6 points equals 6/8% or 3/4%. 4 1/4% and 3/4% is 5%.
24
Q
which factor is considered the most important when qualifying a borrower
A
Payment history
25
Pre payment penalties, when allowed per Dodd/Frank cannot exceed
3% of the outstanding loan amount during the first year of the loan
26
NRSRO
Nationally Recognized Statistical Rating Organizations
27
who is responsible for the implementation and enforcement of the SEC Rules that apply to NRSRO
Office of Credit Ratings
28
Rehabilitation Mortgage Insurance is available for fixed or adjustable programs. The program is entitled:
203k
29
appraisals max amounts of adjustments
15% of net comparable, no more than 25% OF GROSS
30
greater ownership interest in a business is considered self-employed for loan underwriting purposes
25% THEN YOUR CONSIDERED SE
31
What is the funding fee for a National Guard/Reserve loan with 5% down?
1.75%
32
Fannie Mae Appraisal form 1025 is used for
mULTI FAMILY
33
On the GFE, which fee allows a 10% tolerance when compared to the actual charges on the HUD-1
Recording charges required by the government
34
DNR
16,000 EACH
35
ualified Mortgage standards include, but are not limited to
The Dodd-Frank Act sets loan generally cannot be a qualified mortgage if the points and fees paid by the consumer exceed 3% of the total loan amount,
36
underwriter must be able to assess a borrower's
ability/willingness
37
The Consumer Finance Protection Bureau (CFPB) is charged with combining and simplifying the disclosures required under:
TILA/ RESPA.
38
The estimate of settlement charges on a GFE must be made available for at least _________ business days.
While there are no restrictions on the amount of time an interest rate must remain available, the estimate for all other settlement charges must be available for at least 10 business days.
39
Which is a common debt-to-income ratio?
Front 28% / Back 36%
Front 31% / Back 43%
Back 41%
Common DTI Ratios include: conforming loans - 28% front ratio and 36% back ratio (28/36), FHA - 31% front ratio and 43% back ratio (31/43), and VA only uses back ratio of 41% as a guideline.
40
Annual PMI is calculated by dividing the loan by 100 and then multiplying it by the PMI factor. What is the monthly premium for a $240,000 loan with a factor of 30%?
60
41
FORM 1165
UNDERWRITERS SEE IT ON PARTNERSHIP TAX RETURNS
42
A subsequent VA cash out refinance also requires a funding fee of __
3.30%
43
What type of credit score leverages all three credit bureaus and uses an A, B, C, D, and F grade level?
VANTAGESCORE
44
Computation of late fees on monthly residential mortgages is limited to:
Correct answer is (b).
| Used to be 4 to 6% on residential (1 – 4) property.
45
National Guard must provide adequate documentation to indicate at least _______years of honorable service;
6 YRS OF SERVICE NAT GAURD
46
Title XLV, subtitle C of the Mortgage Reform and Anti- Predatory Act, addresses high cost mortgages. The acronym is:
HOEPA
47
three Cs of credit
capacity, character, and collateral
48
CHECK VA FUNDING SCHEDULE
IT NEEDS TO BE KNOWN
49
How does an underwriter assess a borrower's capacity or financial ability to repay a mortgage
Utilize debt-to-income ratios
50
Fannie Mae developed the Desktop Underwriter® system in order to:
provide underwriting recommendations.
51
Which of the following items can be used as an alternate form of documentation to verify deposits?
Most recent 3 months' depository institution statements
52
A veteran applying for VA financing can expect to obtain a maximum guaranty of __________ of the single-family conforming loan amount.
25% OF
53
he Section 251 program allows specific interest rate adjustments and caps.
The 7 and 10 year ARMs allow a 2% annual interest rate adjustment after the initial fixed interest rate period, and a 6-percentage point interest rate cap over the life of the loan.
54
Property taxes are paid in:
ARREARS
55
There are funding fees required for VA IRRRLS, the fee is:
½% of the loan amount.
56
The Homeowners Bill of Rights prevents lenders from:
The Homeowners Bill of Rights prevents lenders from dual track foreclosures.
57
Seller concessions on a VA Loan may not exceed ________% of established reasonable value.
4%
58
What is the acronym for Home Equity Loan?
HEL
59
What is the Fannie Mae reserve requirement for a mortgage secured by an investment property?
6 MONTHS
60
Regarding prepayment penalties, Title XIV of the Dodd Frank Act:
limited any pre-payment penaltieS
61
An extended coverage policy of title insurance exceeds the protection afforded by a standard policy in guarding against:
relocation of property lines as a result of a formal survey.
62
If the principal and interest payment is $1,347.13 on a 30-year fixed $300,000 loan, what portion of this payment will go toward the principal on the second payment if the interest rate is 3.5%?
Correct answer is (d).
$300,000 x .035/12 = $875 first months interest. The new balance is (1,347.13 – 875 = 472.13). $300,000 loan less $472.13 (principal) = $299,527.87 x .035/12 = 873.62. $1347.13 (P & I) less $873.62 = $473.51.
63
If a borrower selects a settlement provider that is on the written list provided by the loan originator, then the:
nder RESPA, if the lender charges more than the allowable tolerances at settlement, the borrower can file a complaint with HUD's Office of RESPA. When the originator selects and identifies the provider of services, these charges may only increase 10% in the aggregate. If the borrower selects a provider that is not on the written list provided by the loan originator, the lender is not subject to any tolerance restrictions for that service.
64
If an FHA base loan amount is $300,000., what will be the monthly MMI if the upfront mortgage insurance is 1.75% of the loan amount and the monthly insurance premium is 1.25%?
Correct answer is (b).
| Base Loan $300,000 x 0.01.25/12 = $312.50.
65
Loans covered under Title XIV of the Dodd/Frank act are defined as “Residential Mortgage Loans”. They are defined as:
transactions secured by a mortgage or a deed of trust.
66
The standard policy of title insurance represents the result of three successive processes. What would NOT be considered one of the processes?
The title company does not do a survey or check boundary lines when preparing a standard title insurance policy.
67
What form is used for the Interest Rate Reduction Refinancing VA Loan Worksheet?
26-8923
68
VA has a purchase-funding fee for regular and reserves. What is the current fee for a 100% loan, for active duty personnel for the first time?
2.15%
68
Evidence of a debt
Promissory note
69
Depreciation is always added back into income
Self employed
| Or property depreciation
70
What type of credit sore uses
| A b c d f
VantageScore
71
Va
Max guarantee
25% of single family conforming loan amt
Va
72
Va
After a bk
Wait for
24 months
73
Minimum hazard insurance coverage by Fannie Mae
| Look it up
I'm not sure
74
FHA
| Solar powered loans are called
Energy efficient loans
75
Dual track foreclosures are not allowed in the
Homeowners Bill of Right
76
Fanniemae determined desktop underwriter reasonableness of sales price
Form 1004 is used
77
National guard you need this many years if service, adequately documented
6
78
Va
Va income verification form
26-6393
Learn these forms put in one area
79
Secondary market sells
Mortgage backed securities
80
MDIA
Mortgage disclosure I act
81
Freddie Mac 1970
Ginnie Mae 1968
Fanniemae 1938
Chk
82
According to Fannie Mae
| Adjustments on comparable sales shod not exceed
25%
83
Bavk end include
Minimum rev credit
Monthly fixed debt
Divided by gross mo in
84
Estimate of settlement charges must be available for
Ten business days!!!!!!!
85
HOEPA passed in 1994
Include purchase money, open home equity lines n refi
But not
Reverse mortgages!!!!!!!
86
Dodd Frank
IX title
NRSROs
SEC rules to enforce Is the office if credit rating!!!!!!!!!
Nrsro
Nationally recognized statistical rating orgainzation
Credit rating agency
Part if Dodd Frank
87
Dodd Frank max percent of prepay
Three percent
88
Dodd Frank max percent of prepay
Three percent
During the first yr
Learn it
| Your doing great
89
Current conforming limit
$417,000
90
Hel
Home equity Loan
HELOC
Home equity line of credit
Know it
91
Dodd Frank
XIV title
Transactions secured by deed of trust
Or mortgage
Learn it
92
The three Cs
Capacity
Collateral
Character
93
Transfer a loan service
Must let Brwr know fifteen days before the effective date
94
Va
| Interest rate reduction refi va loan worksheet
26-8923
95
```
Continuing education
Three hr fed law
Two hr ethics
Two he non tradition mortgage
One hr elective
```
Learn it
96
Title
XLV
Hopea
Antipreditory
Learn it
97
As of April 9 2012
| Fannie Mae is 1.75 upfront insurance premium
That's it
98
Safe act
| Secure and fair enforcement mortgage licensing act
Learn it it :)
99
An OPINION OF TITLE
| is a written statement by attorney
:)
100
Property taxes are paid in arrears
;)
101
Va
Cert of eligibility
26-8320
;)
102
Trade off table is on
GFE
103
Covered by title insurance
Loss due to a missing signature
Unpaid property tax not shown
Easement shown n policy
Zoning ordinance n regulations not covered
104
CFPB
Regulates covered persons
Offering consumer financial services or products
Chk cashing chk collection chk guarantee
Chk n go
105
Form on tax
1165
Is PARTNERSHIP!!!!
.
106
Va
Funding fee on All va programs
Xcept
Surviving spouse of vet who died in active service or service connect disability
Va
107
Appraisal
Which method
Market val of prop by calculating
Present worth of future benefit
Income approach
108
Dodd Frank
| Title XIV
Limited prepayment penalty a
109
Va
Funding fee
VA IRRRLS
One half if a percent!!!!!!!!!!!
110
Normal FHA finance
3.5 percent down
Program is called 203b
Program 203k is rehab
Learn it
:)
111
Fed reserve board consumer hand book
On adjustable a says
```
Start rate
Pymts
Int rate caps
Adjustment period
Payment cap
Margin
Index
```
112
Patriot act
| Two forms of I'd
State driver lic
| Ss card
113
Purpose of title Insurance is
Funding fee
National guard
Five percent down
114
Funding fee
National guard
Five percent down
1.50% of loan. Amt
;)
115
National Guard Reserve
Funding fee
1.75
NOT 1.50!!!!!!!!!!!!!!!!
.
116
```
Va
When using income from non military employment
Only verifiable inc can b used
In
TOTAL EFFECTIVE INC
```
THE FOLLOWING WORK/TIME VERIFICATIONIS REQUIRED
Two years overtime n partime
117
Va
Verify inc form
26-6393
Know it
118
MDIA
MORTGAGE DISCLOSURE IMPROVEMENT ACT
:)
119
Late fees
| Residential mortgages
Four percent
120
Va
Dva
Bk
24 months
;)
121
Fannie Mae
Insurable value
100,000
80%of property Insurable value
Know it
122
Std title
Protects
Off record hazard aka forgery
Exp incurred to defend title
;)
123
Va
Cash out refi
Funding fee
3.3 percent
A SUBSEQUENT va cash out refi
Has a 3.3% funding fee
124
GFE fees
| Determined by
Lo estimates normal for transaction type
125
Regular mitary veteran
Wants guarantee loan/finance
2.15 is funding fee
126
1025 appraisal form
For multi family
127
Title
| Extended coverage
Projects against
Relocated property lines
Of a formal survey
128
Abstract of title is
Summary of facts regarding title
129
Qualified mortgage standard
Four points
| So a total if four points in total charges
130
As of July 21 2011
Administering n enforcement of safe act is from CFPB
CONSUMER FINANCIAL PROTECTION BUREAU
TITLE X OF DODD FRANK ACT
This was the ruling on 6/16/2014
131
Govt fees are allowed a ten percent plus or minus on actual charge when entered in GFE
If Brwr picks from list
| Charges on GFE must be within ten percent
132
Taxes are always
Prorated
133
Va appraisal request form
26-1805
;)
134
28/36 conform
31/43 FHA
41 va
Ratios
135
Appraiser calls for work to be done
He goes out and then fills out form 442
442
136
If a Brwr is charged $50 for a credit report when it cost $20
Section 8 B of respa is violated
Section 8 B
137
Lenders like to impound if ltv is above eighty percent
.
138
Dd214
Mike got it
When he was discharged
.
139
Adjustments to comparable sales must be made without regard to the percentage or dollar adjustments
.
140
Which appraisal method determined property value of a property by substituting one similar property for another n comparing sales prices
SALES COMPARISON APPROACH!!!
141
15% is the max
Fannie says
15% of sales price for any adjustment
.
142
203 b. FHA
203 k. Rehab
.
143
Va
2.15 funding fee
On
Purchase for regular n reservist
Current fee for active duty 100 percent loan
2.15
144
.
Do not call
| $16,000 violation
145
.
Appraiser use
1004
Sfr
146
Appraisal method
Determines value of property by using replacement cost
Is called cost approach
Yep
147
2.15 funding fee
National guard
100.% Liam guarantee
Google it
