Ohio NMLS Flashcards
Under the Consumer Sales Practices Act, Ohio law prohibits the financing of any (4)
prohibits the financing of any credit, life, disability, or unemployement insurance or debt collection agreement.
The mortgage broker act includes the following requirements for all principle and branch offices: (4)
- the office must consist of at least one enclosed room or building of stationary construction in which negotiations for mortgage loan transactions can be conducted privately
- The office must be in compliance with local zoning ordinances
- The office cannot be in an area zoned for residential use
- The office must post its license in a conspicuous place.
The time period within which an applicant cannot have pled nolo contendere to a misdemeanor that involved financial services?
10 years
What can the operations manager use to prove its experience? How many years do they need?
- proof of employment with a W 2, tax return, etc.
- 3 years
is defined as refinancing an existing loan when the new loan doesn’t have a reasonable, tangible net benefit to the consumer.
Loan Flipping
Ohio law requires disclosure of property tax escrow information:
no less that 24 hours prior to settlement
The surety bond amount is calculated based on (%) of the origination volume in the preceding calendar year:
.50%
When considering whether a refinance provides a tangible net benefit, which of the following is a mortgage professional required to consider? (3)
- Terms of both the new and refinanced loans
- Cost of the new loan
- The borrowers financial circumstances
When must a mortgage broker provide a copy of the credit report to a borrower?
Immediately upon receipt of the credit report
Mortgage professionals must provide an additional disclosure concerning the fact that a refinance might be difficult for?
Loan transactions where the loan to value is more that 90%
A revised Mortgage Loan Origination Disclosure Statement is due:
within 24 hours after a change has occurred.
Pursuant to annual reporting requirements, a broker that operates multiple branch offices:
May submit a composite report covering all office locations.
A prohibition against call provisions means?
A lender cannot include terms which allow for acceleration of debt at the lenders discretion.
Who is responsible for overseeing individuals and entities involved in banking and financial activities?
The Division of Financial Institutions (DFI)
Who regulates non-depository consumer finance companies? The Division’s regulatory authority covers mortgage brokers, loan officers and registrants under the Mortgage Loan Act.
The Consumer Finance Section of the Division of Financial Institutions
The department can issue a cease and desist order that is effective immediately as long as it schedules a hearing within how many days of issuing the order?
14 days
In a hearing initiated by a borrower, the department can order licensees to?
Pay damages for any harm resulting from violations of the law
A method of allocating payments made on a mortgage loan where the payment is first applied to the accumulated interest, and then the remainder is applied to the unpaid principle balance.
Actuarial Method
A residential mortgage loan transaction in which the mortgage broker does not use the mortgage brokers own funds to fund the transaction, and, at settlement, the mortgage is simultaneously assigned to another person.
Table-Funding
A residential mortgage loan transaction in which the mortgage broker uses the mortgage brokers own funds to fund the transaction, and the mortgage is sold or assigned before the mortgage broker receives a payment on the mortgage loan.
Warehouse-lending
Brokers must disclose the following on their application for a license: If at any time they have been charged, or have plead guilty to?
In the last how many years pleaded guilty to a financial misdemeanor?
- plead guilty to a felony at any time.
2. In the last 10 years for a financial misdemeanor.
A broker must disclose if any of the following has occurred in the last 10 years: (3)
- Denied license
- Revoked license
- Suspended license
A clients ability to repay a loan must be assessed by considering the following: (7)
- Current and expected income
- Current and expected cash flow
- Financial obligations
- Taxes and insurance on the property
- Employment status
- Credit history
- Debt to income ratios
what is the certificate of registration fee under Ohio Mortgage Broker act (OMBA)
(Broker)
(Branches)
- $600 including the $100 NMLS fee
2. $520 for branches, including the $20 NMLS fee
Certificate of registration fee for loan originators under both OMBA and OMLA
$219 for loan originator applications
what is the Mortgage Broker Act Mortgage Banker Exemption (for all exeptions) ($) for branches as well.
$450
$370 for branches
A mortgage proffessional can obtain a surety bond by a certified :
a certified insurance company
Corporate Surety Bond ( brokers and lenders)
Min:
Max:
plus:(branch)
min = $50,000
max =$150,000
plus= $10,000 for each branch office
employer must post surety bond for loan originators behalf in an amount of ($) to ($)
from $50,000 to $100,000
Brokers and applicants for broker licenses dont need a surety bond if they can prove that they do not and will not accept -
advance fees
if action is brought against a surety bond by borrower, the licensee is required to provide a notice to the superintendent within how many days of the action?
within 10 days of the action
If a licensee wishes to cancel a surety bond how many days prior notice must be given to the superintendent
30 days prior notice
Pre licensing under OMBA, including each operations manager, are required to complete how many hours of education including but not limited to:
24 hours
all same 3 3 2 but difference is there are 4 hours of state law including CSPA
If an originators employment is terminated lender must return originators license to superintendent within how many days of termination?
within 5 days of termination
if operations manager changes, the registrant is required to designate another operations manager within ?
90 days
Renewal fee for mortgage loan act OMLA (lender) is
$300
renewal for OMBA (broker)
$500
renewal for originator renewal fee is
$150 and is the responsibility of the originator
If not paid by the Dec 31st the licensee must cease activity unless the renewal fee and the ($) late fee are paid by (date)
late fee of $100 are paid by Jan. 31st
If the fees are not paid by Jan 31st then the license is considered?
Expired
a licensee has to maintain records, including copies of all mort. loan orig. disclosure statements, for how long under OMBA. and how long under OMLA?
OMBA - 4 years
OMLA - 2 years
The law requires the Department to conduct investigations at least ()
at least 1nce a year
When must the broker deliver a copy to the borrower of a credit score and report obtained for a loan app.
Immediatly upon receipt
Prepayment penalties are prohibited if these conditions exist: (3)
- loan is made by a broker, originator, or non bank lender
- a loan that is a first mortgage
- The mortgage is less than $83,894
As result of the CPI increasing by 3.9% effective January 1, 2012, no penalties may be imposed on prepayment or refinancing of a residential mortgage loan of less that ($)
of less than $83,894
the employee or owner designated by the registrant or applicant to be the individual who the division of financial institutions can contact regarding compliance or licensing matters relating to the registrant’s or applicant’s business or lending activities secured by an interest in real estate
primary point of contact
The OMLA registrant must also submit, for each type of loan the registrant may make (excluding first residential mortgage loans) samples of the following loan documents:
Promissory notes
Truth-in-Lending statements
Types of interest calculations (indicating the section of the Ohio Revised Code used to calculate each different type of interest calculation)
Ledger record and payment histories if servicing loans
The Mortgage Broker Act includes the following requirements for all principal and branch offices:
The office must consist of at least one enclosed room or building of stationary construction in which negotiations for mortgage loan transactions can be conducted privately
The office must be in compliance with local zoning ordinances
The office cannot be in an area zoned for residential use
The office must post its license in a conspicuous place
Mortgage Loan Act, the Superintendent of the Division of Financial Institutions has authority to conduct examinations of a registrant at least once every…
18 months and the retention period is 2 years
Who is required to reasonably supervise all loan originators and other persons affiliated with the broker. Also, they are required to establish policies and procedures which are aimed at avoiding violations of the Mortgage Broker Act, related rules and other applicable state and federal laws/rules.
The operations management
For interest-bearing loans, each interest payment must be applied in the following order:
To unpaid charges; then
To interest; then
To the unpaid principal balance
A registrant is allowed to contract for and receive interest at a rate not exceeding ___ per year on the unpaid principal balance of a loan. Loans may be interest-bearing or pre-computed.
21%
The borrower has the right to cancel the insurance for a period of ________ after the loan is made by giving the registrant written notice and returning all the policies or certificates of insurance to the registrant.
25 days
The following fees may be included in the principal amount of the loan or collected at any time after the loan is made:
Authorized fees to record, file, or release security interests and mortgages on loans
Bona fide and reasonable closing costs paid to third parties, such as title insurance, surveys, and inspections (for loans secured by an interest in real estate)
Credit investigation fees not exceeding $10
Fees for mortgage preparation, settlement statements, notarizing documents, appraisals, and federally mandated inspections of home improvement work financed by a second mortgage loan (for fees not paid to the registrant, registrant’s employees, or registrant’s affiliates)
The following fees are allowed to be collected by a registrant:
Costs in connection with a suit to collect a loan
Reasonable attorney fees incurred in a suit to collect on a security interest or mortgage after default
The registrant and borrower may contract for an alternative interest rate for either the regular or open-end loan agreement. However, the rate cannot exceed ___ per year.
25%
The 90% LTV statement is in what type?
16-point bold face type
The “nature of relationship” disclosure must be in what type?
10-point underlined New Roman type
Changes in fees payable to the mortgage broker or lender must also be disclosed if the change is an increase of ___ or ____, whichever is greater.
10% or $100
The Acknowledgement of Receipt document is in what type?
printed in at least 14-point type
Ohio law requires a mortgage broker or loan originator to disclose the following in any advertisement (including a website) related to its services:
The broker or loan originator’s name
The broker or loan originator’s street address
The broker or loan originator’s number that is designated on his/her Certificate of Registration or license
What defined as a consumer credit mortgage loan transaction, including an open-end credit plan, that involves property located within Ohio and that is secured by the consumer’s principal dwelling?
Covered loan
Furthermore, the covered loan must meet either of the following criteria:
The annual percentage rate exceeds by more than 10 percentage points the yield on Treasury securities
For loans that are $25,000 or more, the total points and fees payable by the consumer exceed 5% of the total loan amount; for loans that are less than $25,000, the total points and fees exceed 8% of the total loan amount
Any changes to the terms of the extension of credit require new disclosures. These new disclosures may be made by telephone if:
The change is initiated by the consumer, and
At the consummation of the loan transaction, the creditor provided the new disclosures to the consumer in writing, and
Both parties certified in writing that the new disclosures were disclosed by telephone no later than three days prior to the date of the transaction’s consummation
For any HEPA violations, the Superintendent may apply to a court for:
An injunction
A restraining order
Other appropriate relief
The Superintendent may also: (HEPA)
Issue a cease and desist order
Suspend, revoke, or deny renewal of a license or registration
Impose a fine not exceeding $2,500 per violation
Impose a fine not exceeding $5,000 per violation for two or more subsequent violations
Double a fine amount if the injured consumer is 65 years old or older
“Willfully and knowingly” failing to comply with disclosure requirements or committing prohibited acts or practices is a _____ _____ felony.
fifth degree felony
What does a fifth degree felony conviction possibly carry?
possible jail term of 6-12 months and a fine of up to $2,500.
Administrative Penalties Under the OMBA: The Superintendent, in addition to revoking, suspending, or refusing to renew a certificate or license, may do the following:
- Impose a monetary fine not exceeding $1,000 per day of violation
- Apply to the court for injunctive relief or a restraining order
- Seek from the court the imposition of civil penalties for unlicensed or unregistered activity not exceeding $5,000 per violation
- Issue a cease and desist order
Paying or receiving a referral fee or kickback of any kind in connection with a bona fide third party
Fourth degree felony
A fourth degree felony conviction carries a possible…
jail term of 6-18 months and a fine of up to $25,000.
Doing any of the following is considered what type of crime:
Acting as a loan originator without first obtaining a license Failing to register with and maintain a unique identifier through the NMLS Using another individual’s unique identifier
- First Degree Misdemeanor
- This misdemeanor conviction carries a penalty of a fine up to $500 and a possible jail term of 30-180 days.
The CSPA authorizes who to bring an action for the commitment of unconscionable acts or practices in lending transactions?
- Ohio’s Attorney General
- The Attorney General can seek injunctive relief to restrain an unconscionable act or practice and can request that an Ohio court impose penalties of $25,000 per violation.
The Superintendent, in addition to revoking, suspending, or refusing to renew a certificate or license, may do the following:
Impose a monetary fine not exceeding $25,000
Apply to the court for injunctive relief or a restraining order
Seek from the court the imposition of civil penalties not exceeding $5,000 per violation
Issue a cease and desist order
A Minor Misdemeanor conviction carries a…
a penalty of a fine up to $500 and a possible jail term of 30-180 days.
Minor Misdemeanor (§1321.99(D))
Failing to properly compute interest and fees
Failing to properly compute open-end loan interest and fees
Permitting a borrower to be indebted for a loan while the borrower is also indebted to an affiliate or agent of the registrant for the purpose or with the result of obtaining greater charges than would otherwise be permitted
Inducing or permitting a person to become obligated to the registrant, directly or contingently, or both, under more than one loan contract at the same time for the purpose or with the result of obtaining greater charges than would otherwise be permitted
Refusing to provide information regarding the amount required to pay in full when requested by the borrower or by another person designated in writing by the borrower
Paying or receiving, directly or indirectly, fees or any other type of compensation for services of a mortgage broker that, in the aggregate, exceed the lesser of one thousand dollars or one per cent of the principal amount of the loan
Failing to comply with the Fair Debt Collection Practices Act
Using false, misleading, or deceptive advertising
