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NMLS > NMLS TEST 1 > Flashcards

NMLS TEST 1 Flashcards

1
Q

Which of the following is intended to ensure that consumers are provided with information on the nature and costs of the settlement process?

A

RESPA

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2
Q

Which of the following best describes a loan with a principal balance exceeding Fannie Mae or Freddie Mac guidelines?

A

Jumbo

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3
Q

A borrower receives $1,000 per month in rental income. How much of the income may be used to qualify the borrower for a loan?

A

$750

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4
Q

Assume a borrower completes an online loan application, including all six required elements, but never hits “submit.” Which of the following is true regarding the lender’s obligation to issue a Loan Estimate?

A

The lender is not required to issue a Loan Estimate

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5
Q

Under which of the following circumstances would the lender on a conventional loan be required to drop the mortgage insurance?

A

The loan reaches 78% LTV based on the original purchase price

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6
Q

What is Freddie Mac’s automated underwriting system called?

A

Loan Product Advisor

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7
Q

Which of the following would NOT be required if a mortgage company wishes to utilize electronic signatures on required disclosures?

A

The company must record the IP address from which the documents were accessed

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8
Q

A loan originator is discussing the features of a home equity consolidation loan with an applicant. In doing so, he relays to the applicant that the interest on the loan is tax deductible. This is:

A

Not permissible, as the loan originator is not qualified to provide tax advice

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9
Q

Under the S.A.F.E. Act, a licensed loan originator’s responsibilities with regard to recordkeeping include all of the following, except:

A

Making all of the licensee’s records available to borrowers upon demand

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10
Q

Which of the following pieces of information is NOT found on the 1003?

A

Underwriter’s name

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11
Q

According to the standard deed of trust, how soon must a borrower on an owner-occupied loan occupy the property?

A

Within 60 days of closing

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12
Q

In a mortgage transaction subject to RESPA that is secured by the consumer’s dwelling, a Loan Estimate must be delivered or mailed within three business days after receipt of a written application and no later than:

A

The seventh business day before the transaction is consummated

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13
Q

What is the tolerance allowed for variances in the APR disclosure required by the Truth-in-Lending Act in a regular transaction?

A

0.125%

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14
Q

Which of the following would convey a property?

A

Warranty deed

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15
Q

A lender originally discloses an APR of 6.08%. When the lender begins to prepare closing documents, they realize the actual APR is 6.135%. Which of the following is true?

A

The lender has no obligation to re-disclose. he APR is considered accurate if it is not more than one eighth of one percentage point (.125%) above or below the APR determined in accordance with legal requirements, or if it is not more than one quarter of one percentage point (.25%) above or below the APR for an irregular transaction.

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16
Q

Combining stated income with a nontraditional mortgage product is an example of:

A

Risk layering refers to combining, or layering, high-risk loan features, which might include an interest-only or other non-conventional loan, reduced documentation, and a simultaneous second-lien loan.

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17
Q

Ethics:

A

provides a guideline for answering questions when a choice of actions is available.

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18
Q

Under the S.A.F.E. Act, a loan originator:

A

Is an individual who takes residential mortgage loan applications

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19
Q

Unlike other parties to a mortgage transaction, in general, _____ have no long-term financial interest in the performance of the loan.

A

The mortgage broker and mortgage loan originator

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20
Q

The acronym LIBOR represents a:

A

Possible ARM index

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21
Q

The NMLS may best be described as a:

A

Licensing system utilized by all U.S. states and territories

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22
Q

Which of the following is not a required element of a company’s safeguard policy, as required by the GLB Act?

A

contract with a federally-insured company to destroy documents

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23
Q

A mortgage which has a fixed interest rate for the first three to five years, and then a rate that adjusts at intervals based on an index and margin, is known as a(n):

A

Hybrid ARM

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24
Q

Under Regulation X, the term “loan originator” applies to a:

A

Mortgage broker or lender

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25
Q

Under the Gramm-Leach-Bliley Act, the Safeguards Rule and Financial Privacy Rule apply to which of the following?

A

Financial institutions

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26
Q

A disclosure advising the borrower of their right to receive a copy of the appraisal must be delivered:

A

Within three business days of the application

27
Q

Which of the following terms would apply when calculating the maximum loan amount available to a VA borrower?

A

Entitlement

28
Q

Which of the following entities was formed by the federal government in order to facilitate home ownership, but is a publicly held corporation now separate from the federal government?

A

Fannie Mae

29
Q

When would business tax returns be required as documentation of income for a borrower?

A

If the borrower owns more than 25% of a company

30
Q

Which of the following is a government-owned entity which facilitates home ownership in the United States?

A

Ginnie Mae

31
Q

According to ECOA, when could a lender ask a borrower about their race?

A

If they ask for monitoring purposes

32
Q

Which of the following best describes the federal limitation on the shortest adjustment period allowed on an ARM?

A

No limit

33
Q

A mortgage broker originates and closes a mortgage loan, but it is funded by the lender who is purchasing the loan from the originating broker. This is an example of:

A

Table funding

34
Q

Which of the following borrowers would be considered self-employed for underwriting purposes?

A

A borrower who is a salesperson for a company, of which she is a 30% owner.A self-employed borrower is one who owns 25% or more of a business.

35
Q

A 180 / 360 loan is considered a(n) ___________________ mortgage.

A

Balloon

36
Q

Arabella Ash works for and is supervised by loan originator Jerry Jenkins, collecting and analyzing data related to residential mortgage loans. She communicates with borrowers, but does not offer or negotiate loan rates or terms or advise consumers about residential mortgage loan rates or terms. Under S.A.F.E. Act definitions, Arabella is:

A

A loan processor

37
Q

For an FHA loan, how much may the seller contribute toward the borrower’s closing costs?

A

6% of the sales price

38
Q

A disclosure that allows a consumer to more easily compare loan options is required under which regulation?

A

Regulation Z

39
Q

Under HOEPA, a high-cost loan may have a balloon payment under all of the following circumstances, EXCEPT:

A

The borrower signs a waiver consenting to the balloon payment

40
Q

When would ARM disclosures be required?

A

For all ARMs

41
Q

In order to meet the annual continuing education requirement, a state-licensed loan originator must complete at least _____ hours of NMLS-reviewed and -approved coursework.

A

Eight

42
Q

On the Loan Estimate, fees related to third-party service providers chosen from the provider list and not affiliated with the creditor are grouped with the recording fees and subject to a:

A

10% tolerance

43
Q

Which of the following is least likely to be considered a proxy for a loan term or condition under the Loan Originator Compensation Rule?

A

The state in which the property is located

44
Q

Which of these replaces the HUD-1 Settlement Statement and the final TIL Disclosure?

A

The Closing Disclosure

45
Q

Which of the following is NOT true about the financial responsibility of a mortgage loan originator?

A

A mortgage loan originator must always have his or her own surety bond in an amount that reflects the dollar value of loans originated in the previous year

46
Q

Under which of the following circumstances could a borrower be charged a fee for the preparation of a settlement statement?

A

A borrower may not be charged a fee for the preparation of a settlement statement

47
Q

Once the Closing Disclosure is delivered, which of the following would require a new Closing Disclosure to be delivered to the borrower and a new waiting period before closing?

A

An increase in the APR by more than .125%

48
Q

Which of the following would not be considered an established business relationship under the Do-Not-Call rules?

A

A consumer inquiry into the purchase of an item six months ago

49
Q

The NMLS was established by:

A

The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators

50
Q

Which of the following statements most accurately describes the term “predominant value”?

A

The most common sales price for the neighborhood

51
Q

Which of the following is true regarding a creditor’s duty to give a copy of an appraisal to a borrower?

A

The lender is required to provide a copy of the appraisal promptly upon completion or three business days prior to consummation for closed-end credit, whichever is earlier

52
Q

A change in the value of a comparable property, made when comparing the features of the comparable property to the subject property, is known as a(n):

A

Adjustment

53
Q

Redlining is addressed in which federal law?

A

ECOA

54
Q

A mortgage which is amortized for a longer period than the actual term of the loan can best be described as what type of mortgage?

A

Balloon mortgage

55
Q

In the Closing Disclosure, which of the following questions is the loan originator required to answer about each of the items in the Loan Terms table?

A

“Can this amount increase after closing?”

56
Q

Inquiring as to whether income is derived from alimony, child support, or separate maintenance is prohibited by which of the following?

A

Regulation B

57
Q

Which of the following best describes the order in which payments will be applied according to the standard deed of trust?

A

Interest, principal, escrow

58
Q

The penal sum of a loan originator’s required surety bond must be maintained:

A

In an amount that reflects the dollar amount of loans originated

59
Q

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

A

Material

60
Q

The APR factors in the effects of all of the following expenses, except:

A

Hazard insurance premium

61
Q

Homes for All considers itself a nonprofit organization. In order for its employees to be exempt from the licensing requirements of the S.A.F.E. Act, each of the following must be true about Homes, except:

A

It may engage in both nonprofit and for-profit activities

62
Q

Under Fannie Mae guidelines, the amount of hazard insurance must be equal to:

A

The lower of the replacement cost or the unpaid loan amount

63
Q

Mortgage interest rates are influenced by all of the following, except:

A

Regional property tax rates

NMLS (1 decks)

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