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nmls 275 created on July 21 2013 > NMLS Prep Cards 277 > Flashcards

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

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2
Q

A creditor denied an applicant a loan. Which document must be sent to the applicant?

A

Adverse Action Notice

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3
Q

What is the main purpose of the FCRA?

A

Create procedures to ensure confidentiality and accuracy of consumer credit information.

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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

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5
Q

The Gramm-Leach-Bliley Act is also known as the:

A

Financial Services Modernization Act.

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6
Q

The sharing of non-public confidential information between financial institutions is addressed in the:

A

GLBA.

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7
Q

The Truth in Lending Act is Title 1 of the:

A

Consumer Credit Act of 1968

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8
Q

One of the most important laws protecting consumers’ identities and credit information is the:

A

Fair Credit Reporting Act.

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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

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10
Q

What was the landmark legislation that launched Truth in Lending disclosures in 1968?

A

Consumer Credit Protection Act

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11
Q

TILA is overseen by:

A

FRB - Federal Reserve Board

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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

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13
Q

Which of the following financial information is not reflected on the TIL Statement?

A

Note rate

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14
Q

According to HMDA, what must be forwarded to the regulator by March 1 of each year?

A

Loan/Application Register

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15
Q

ontinuing education MLO survey course covers

A

3 hours Federal law, 2 hours ethics, 2 hours nontraditional mortgages, and 1 hour elective

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16
Q

VA request for an appraisal is secured by form number

A

26-1805

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17
Q

Discharge Papers issued by any US armed service

A

DD 214.

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18
Q

VA Certificate of Eligibility form number is:

A

Form 26-8320

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19
Q

maximum guaranty that the DVA will provide

A

entitlement.

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20
Q

What form is used for the VA Income Verification Form?

A

26-6393

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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.

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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

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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%.

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24
Q

which factor is considered the most important when qualifying a borrower

A

Payment history

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25
Q

Pre payment penalties, when allowed per Dodd/Frank cannot exceed

A

3% of the outstanding loan amount during the first year of the loan

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26
Q

NRSRO

A

Nationally Recognized Statistical Rating Organizations

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27
Q

who is responsible for the implementation and enforcement of the SEC Rules that apply to NRSRO

A

Office of Credit Ratings

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28
Q

Rehabilitation Mortgage Insurance is available for fixed or adjustable programs. The program is entitled:

A

203k

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29
Q

appraisals max amounts of adjustments

A

15% of net comparable, no more than 25% OF GROSS

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30
Q

greater ownership interest in a business is considered self-employed for loan underwriting purposes

A

25% THEN YOUR CONSIDERED SE

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31
Q

What is the funding fee for a National Guard/Reserve loan with 5% down?

A

1.75%

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32
Q

Fannie Mae Appraisal form 1025 is used for

A

mULTI FAMILY

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33
Q

On the GFE, which fee allows a 10% tolerance when compared to the actual charges on the HUD-1

A

Recording charges required by the government

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34
Q

DNR

A

16,000 EACH

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35
Q

ualified Mortgage standards include, but are not limited to

A

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,

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36
Q

underwriter must be able to assess a borrower’s

A

ability/willingness

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37
Q

The Consumer Finance Protection Bureau (CFPB) is charged with combining and simplifying the disclosures required under:

A

TILA/ RESPA.

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38
Q

The estimate of settlement charges on a GFE must be made available for at least _________ business days.

A

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.

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39
Q

Which is a common debt-to-income ratio?
Front 28% / Back 36%
Front 31% / Back 43%
Back 41%

A

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.

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40
Q

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%?

A

60

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41
Q

FORM 1165

A

UNDERWRITERS SEE IT ON PARTNERSHIP TAX RETURNS

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42
Q

A subsequent VA cash out refinance also requires a funding fee of __

A

3.30%

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43
Q

What type of credit score leverages all three credit bureaus and uses an A, B, C, D, and F grade level?

A

VANTAGESCORE

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44
Q

Computation of late fees on monthly residential mortgages is limited to:

A

Correct answer is (b).

Used to be 4 to 6% on residential (1 – 4) property.

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45
Q

National Guard must provide adequate documentation to indicate at least _______years of honorable service;

A

6 YRS OF SERVICE NAT GAURD

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46
Q

Title XLV, subtitle C of the Mortgage Reform and Anti- Predatory Act, addresses high cost mortgages. The acronym is:

A

HOEPA

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47
Q

three Cs of credit

A

capacity, character, and collateral

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48
Q

CHECK VA FUNDING SCHEDULE

A

IT NEEDS TO BE KNOWN

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49
Q

How does an underwriter assess a borrower’s capacity or financial ability to repay a mortgage

A

Utilize debt-to-income ratios

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50
Q

Fannie Mae developed the Desktop Underwriter® system in order to:

A

provide underwriting recommendations.

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51
Q

Which of the following items can be used as an alternate form of documentation to verify deposits?

A

Most recent 3 months’ depository institution statements

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52
Q

A veteran applying for VA financing can expect to obtain a maximum guaranty of __________ of the single-family conforming loan amount.

A

25% OF

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53
Q

he Section 251 program allows specific interest rate adjustments and caps.

A

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.

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54
Q

Property taxes are paid in:

A

ARREARS

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55
Q

There are funding fees required for VA IRRRLS, the fee is:

A

½% of the loan amount.

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56
Q

The Homeowners Bill of Rights prevents lenders from:

A

The Homeowners Bill of Rights prevents lenders from dual track foreclosures.

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57
Q

Seller concessions on a VA Loan may not exceed ________% of established reasonable value.

A

4%

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58
Q

What is the acronym for Home Equity Loan?

A

HEL

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59
Q

What is the Fannie Mae reserve requirement for a mortgage secured by an investment property?

A

6 MONTHS

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60
Q

Regarding prepayment penalties, Title XIV of the Dodd Frank Act:

A

limited any pre-payment penaltieS

61
Q

An extended coverage policy of title insurance exceeds the protection afforded by a standard policy in guarding against:

A

relocation of property lines as a result of a formal survey.

62
Q

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%?

A

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
Q

If a borrower selects a settlement provider that is on the written list provided by the loan originator, then the:

A

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
Q

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%?

A

Correct answer is (b).

Base Loan $300,000 x 0.01.25/12 = $312.50.

65
Q

Loans covered under Title XIV of the Dodd/Frank act are defined as “Residential Mortgage Loans”. They are defined as:

A

transactions secured by a mortgage or a deed of trust.

66
Q

The standard policy of title insurance represents the result of three successive processes. What would NOT be considered one of the processes?

A

The title company does not do a survey or check boundary lines when preparing a standard title insurance policy.

67
Q

What form is used for the Interest Rate Reduction Refinancing VA Loan Worksheet?

A

26-8923

68
Q

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?

A

2.15%

68
Q

Evidence of a debt

A

Promissory note

69
Q

Depreciation is always added back into income

A

Self employed

Or property depreciation

70
Q

What type of credit sore uses

A b c d f

A

VantageScore

71
Q

Va
Max guarantee
25% of single family conforming loan amt

A

Va

72
Q

Va
After a bk
Wait for

A

24 months

73
Q

Minimum hazard insurance coverage by Fannie Mae

Look it up

A

I’m not sure

74
Q

FHA

Solar powered loans are called

A

Energy efficient loans

75
Q

Dual track foreclosures are not allowed in the

A

Homeowners Bill of Right

76
Q

Fanniemae determined desktop underwriter reasonableness of sales price

A

Form 1004 is used

77
Q

National guard you need this many years if service, adequately documented

A

6

78
Q

Va
Va income verification form
26-6393

A

Learn these forms put in one area

79
Q

Secondary market sells

A

Mortgage backed securities

80
Q

MDIA

A

Mortgage disclosure I act

81
Q

Freddie Mac 1970
Ginnie Mae 1968
Fanniemae 1938

A

Chk

82
Q

According to Fannie Mae

Adjustments on comparable sales shod not exceed

A

25%

83
Q

Bavk end include

A

Minimum rev credit
Monthly fixed debt
Divided by gross mo in

84
Q

Estimate of settlement charges must be available for

A

Ten business days!!!!!!!

85
Q

HOEPA passed in 1994
Include purchase money, open home equity lines n refi

But not

A

Reverse mortgages!!!!!!!

86
Q

Dodd Frank
IX title
NRSROs
SEC rules to enforce Is the office if credit rating!!!!!!!!!

A

Nrsro
Nationally recognized statistical rating orgainzation
Credit rating agency
Part if Dodd Frank

87
Q

Dodd Frank max percent of prepay

A

Three percent

88
Q

Dodd Frank max percent of prepay
Three percent
During the first yr

A

Learn it

Your doing great

89
Q

Current conforming limit

A

$417,000

90
Q

Hel
Home equity Loan

HELOC
Home equity line of credit

A

Know it

91
Q

Dodd Frank
XIV title
Transactions secured by deed of trust
Or mortgage

A

Learn it

92
Q

The three Cs

A

Capacity
Collateral
Character

93
Q

Transfer a loan service

A

Must let Brwr know fifteen days before the effective date

94
Q

Va

Interest rate reduction refi va loan worksheet

A

26-8923

95
Q 
Continuing education
Three hr fed law
Two hr ethics
Two he non tradition mortgage
One hr elective
A

Learn it

96
Q

Title
XLV
Hopea
Antipreditory

A

Learn it

97
Q

As of April 9 2012

Fannie Mae is 1.75 upfront insurance premium

A

That’s it

98
Q

Safe act

Secure and fair enforcement mortgage licensing act

A

Learn it it :)

99
Q

An OPINION OF TITLE

is a written statement by attorney

A

:)

100
Q

Property taxes are paid in arrears

A

;)

101
Q

Va
Cert of eligibility
26-8320

A

;)

102
Q

Trade off table is on

A

GFE

103
Q

Covered by title insurance
Loss due to a missing signature
Unpaid property tax not shown
Easement shown n policy

A

Zoning ordinance n regulations not covered

104
Q

CFPB
Regulates covered persons
Offering consumer financial services or products

Chk cashing chk collection chk guarantee

A

Chk n go

105
Q

Form on tax
1165
Is PARTNERSHIP!!!!

A

.

106
Q

Va
Funding fee on All va programs

Xcept

Surviving spouse of vet who died in active service or service connect disability

A

Va

107
Q

Appraisal
Which method
Market val of prop by calculating
Present worth of future benefit

A

Income approach

108
Q

Dodd Frank

Title XIV

A

Limited prepayment penalty a

109
Q

Va
Funding fee
VA IRRRLS

A

One half if a percent!!!!!!!!!!!

110
Q

Normal FHA finance
3.5 percent down

Program is called 203b

Program 203k is rehab

A

Learn it

:)

111
Q

Fed reserve board consumer hand book

On adjustable a says

A 
Start rate
Pymts
Int rate caps
Adjustment period
Payment cap
Margin
Index
112
Q

Patriot act

Two forms of I’d

A

State driver lic

Ss card

113
Q

Purpose of title Insurance is

A

Funding fee
National guard
Five percent down

114
Q

Funding fee
National guard
Five percent down
1.50% of loan. Amt

A

;)

115
Q

National Guard Reserve
Funding fee
1.75

NOT 1.50!!!!!!!!!!!!!!!!

A

.

116
Q 
Va 
When using income from non military employment
Only verifiable inc can b used
In 
TOTAL EFFECTIVE INC

THE FOLLOWING WORK/TIME VERIFICATIONIS REQUIRED

A

Two years overtime n partime

117
Q

Va
Verify inc form
26-6393

A

Know it

118
Q

MDIA

MORTGAGE DISCLOSURE IMPROVEMENT ACT

A

:)

119
Q

Late fees

Residential mortgages

A

Four percent

120
Q

Va
Dva
Bk
24 months

A

;)

121
Q

Fannie Mae
Insurable value
100,000
80%of property Insurable value

A

Know it

122
Q

Std title
Protects
Off record hazard aka forgery
Exp incurred to defend title

A

;)

123
Q

Va
Cash out refi
Funding fee

A

3.3 percent
A SUBSEQUENT va cash out refi

Has a 3.3% funding fee

124
Q

GFE fees

Determined by

A

Lo estimates normal for transaction type

125
Q

Regular mitary veteran

Wants guarantee loan/finance

A

2.15 is funding fee

126
Q

1025 appraisal form

A

For multi family

127
Q

Title

Extended coverage

A

Projects against
Relocated property lines
Of a formal survey

128
Q

Abstract of title is

A

Summary of facts regarding title

129
Q

Qualified mortgage standard

A

Four points

So a total if four points in total charges

130
Q

As of July 21 2011
Administering n enforcement of safe act is from CFPB
CONSUMER FINANCIAL PROTECTION BUREAU
TITLE X OF DODD FRANK ACT

A

This was the ruling on 6/16/2014

131
Q

Govt fees are allowed a ten percent plus or minus on actual charge when entered in GFE

A

If Brwr picks from list

Charges on GFE must be within ten percent

132
Q

Taxes are always

A

Prorated

133
Q

Va appraisal request form

26-1805

A

;)

134
Q

28/36 conform
31/43 FHA
41 va

A

Ratios

135
Q

Appraiser calls for work to be done

He goes out and then fills out form 442

A

442

136
Q

If a Brwr is charged $50 for a credit report when it cost $20

Section 8 B of respa is violated

A

Section 8 B

137
Q

Lenders like to impound if ltv is above eighty percent

A

.

138
Q

Dd214
Mike got it

When he was discharged

A

.

139
Q

Adjustments to comparable sales must be made without regard to the percentage or dollar adjustments

A

.

140
Q

Which appraisal method determined property value of a property by substituting one similar property for another n comparing sales prices

A

SALES COMPARISON APPROACH!!!

141
Q

15% is the max
Fannie says
15% of sales price for any adjustment

A

.

142
Q

203 b. FHA

203 k. Rehab

A

.

143
Q

Va
2.15 funding fee
On
Purchase for regular n reservist

A

Current fee for active duty 100 percent loan

2.15

144
Q

.

A

Do not call

$16,000 violation

145
Q

.

A

Appraiser use

1004

Sfr

146
Q

Appraisal method
Determines value of property by using replacement cost

Is called cost approach

A

Yep

147
Q

2.15 funding fee
National guard
100.% Liam guarantee

A

Google it

nmls 275 created on July 21 2013 (1 decks)

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