Practice

Question 1

Which of the following determines whether flood insurance is required for a property?

The lender
Title company
Appraiser
FEMA

Answer 1

Lender

Question 2

Which document advises the borrower not to provide false information in relation to his application?

The LE
The CD
The ECOA adverse action notice
The HUD special information booklet

Answer 2

The HUD special information booklet

Question 3

The primary purpose of TILA is:

Answer 3

To ensure that consumers are given disclosure of credit terms

Question 4

TILA provides that a lender refinancing a residential property must give the borrower:

A copy of the TIL disclosure for the original loan

Nothing - the law doesn’t apply to refi’s

A new LE if requested

A new LE

Answer 4

A new LE

Question 5

Within how many days of receiving an application must the LO provide the applicant with a special info booklet?

Answer 5

Three days

Question 6

RESPA does not require a lender disclosures of closing costs and procedures for which of the following home loans?

FHA loans

Home purchase loans from a lender

Temporary construction loans

Home equity loans

Answer 6

Temporary construction loans. RESPA applies to basically every loan secured by a mortgage.

Question 7

Employment and income documentation is generally valid for no more than how many months prior to the date of the mortgage note?

2
4
3
1

Answer 7

Four?

Question 8

Under the rules for the do not call registry, a mortgage broker may make an unsolicited call to a client or customer with whom he has established a business relationship for up to how many months after his last transaction?

Answer 8

18

Question 9

In a loan transaction involving a mortgage broker, which of the following is true?

A. The mortgage broker is responsible for ascertaining whether the loan estimate has been provided

B. The loan estimate must be provided by the lender

C. The loan estimate must be provided by the mortgage broker

D. The lender is responsible for ascertaining whether the loan estimate has been provided

Answer 9

D

Either can deliver it, but it’s the lender’s responsibility to ensure that it has been provided.

Question 10

A loan originator who provides a revised loan estimate must retain documentation for the reason he had to provide a new loan estimate for at least:

Answer 10

Three years after settlement

Question 11

The statement “you are not required to complete disagreement merely because you have received these disclosures are signed the loan application,” is required by:

A. RESPA for all residential mortgage loans

B. ECOA on every loan app

C. Regulation Z on HOEPA loans

D. Regulation Z on conventional mortgage loans

Answer 11

C

Question 12

The minimum number of comparables Fannie Mae requires for a residential mortgage appraisal is

Answer 12

3

Question 13

In regard to money laundering, the process of separating the criminal proceeds from their criminal origins using financial transactions in one or more accounts is called:

Answer 13

Layering

Question 14

In regard to find transfers all of the following would be considered red flags indicating possible illegal activity except:

Transfers to a financial secrecy haven like the Cayman Islands

Transfer activity to a bank in a different US state

Repetitive transfer activities

Transfers in odd amounts

Answer 14

Transfer activity to a bank in a different US state

Question 15

Under the bank secrecy act, each institution must develop what kind of written compliance program, which must be approved by the institution’s Board of Directors?

Answer 15

Anti-money-laundering compliance program

Question 16

In order to discourage appraisal fried caused by loan originator pressure, the FHA discourages flipping by determining that the property is not eligible for FHA financing if it is re-sold within how many days from the last sale?

Answer 16

90 days

Question 17

Which regulation allows a borrower to challenge the value on an appraisal?

Answer 17

ECOA

Question 18

How long must all commercial communications and transcripts be kept?

Answer 18

2 years

Question 19

Foreclosure is initiated on a consumer’s principal dwelling that secures a credit application. At this time, the finance charge and other disclosures affected by the finance charge are considered accurate if they are above the amount required to be disclosed or if they are understated by no more than:

Answer 19

$35

Question 20

TILA requires disclosure of which of the following:

interest rates offered to other borrowers

interest rates offered by other lenders

discount points to be paid to the lender

his credit score

Answer 20

Discount points to be paid to the lender

Question 21

Which of the most common types of fraud typically relates to loan documentation?

Occupancy
Income
Employment
All of the above

Answer 21

All of the above?

Question 22

A secured by vacant or unimproved property is covered under RESPA only if:

any construction is financed separately

none of these

The proceeds will be used to construct a home within two years

The loan proceeds are to be used to purchase only the land

Answer 22

C?!

Question 23

TILA does not include which of the following as finance charges in a residential loan transaction?

A. PMI
B. Settlement/closing fees
C. Mortgage broker fees
D. Appraisal fees

Answer 23

D?