Practice Exam 2

Question 1

A $100,000 loan has a $1,000 monthly payment and a payment cap of 7.5%, what’s the maximum payment after the next adjustment?

Answer 1

$1,075

Question 2

If a provider offers both reduced and full documentation loan programs, consumers should be alerted:

A. To the undesirability of putting jam on a magnet

B. To the right to opt for the full documentation option

C. To any pricing premium attached of the produce documentation option

D. To the necessity of putting your granny in a bag

Answer 2

C

Question 3

An FHA loan is a loan that is:

A. Subsidized by a federal agency

B. Made by the federal housing administration

C. Restricted to first time homebuyers

D. Insured by a federal agency

Answer 3

D

Question 4

A mortgage promissory note contains:

A. The effective date of the lien

B. The interest rate

C. All encumbrances on the title

D. The APR

Answer 4

B

Question 5

When a bar where her offices property as security for that but does not give equitable title or position to the lender, this is called:

Answer 5

Hypothecation

Question 6

Which IRS form authorizes the lender to obtain and contact information?

Answer 6

4506-T

Question 7

The guidelines for the professional conduct of appraisers are set in

Answer 7

The USPAP

Question 8

Existing liens and mortgages are recorded in _______ of the title commitment

Answer 8

Schedule B

Question 9

Which of the following is true regarding the service release premium?

A. It is disclosed in the CD
B. It’s paid when the i rate is < the par rate
C. It’s a flat fee
D. It’s not paid to the originating mortgage broker

Answer 9

D

Question 10

In regard to higher-priced mortgage loans, the creditor or service or may cancel an escrow account only upon the earlier of: termination of the underlying debt obligation, or ___ years after the loan was consummated, at the request of the consumer.

Answer 10

5

Question 11

How may a borrower rescind a loan under the TILA?

Answer 11

By written notice to the lender

Question 12

The notice of TILA’s right to rescind includes disclosure of all of the following except:

A. The effects of rescission
B. The date the rescission period begins
C. Instructions on how to rescind
D. The date the rescission period expires

Answer 12

B?

Question 13

Which of the following is true about the interest rate for an ARM?

A. Disclosures about the rate must be made after the origination fee is paid

B. The rate tied to the index will never change during the term of the loan

C. The interest rate is tied to the Consumer Rate Index

D. The margin is included in setting the interest rate to cover the creditor’s expenses and profit

Answer 13

D

Question 14

The Federal Financial institution regulatory agencies include all of the following except:

A. The national credit union administration
B. Comptroller of the currency
C. The board of governors of the Federal Reserve system
D. The American Association of residential mortgage regulators

Answer 14

?

Question 15

TILA restrictions for higher-priced mortgage loans require an escrow account:

A. Only for taxes
B. Only if the loan is a first lien on the borrower’s principal dwelling
C. For a first or second lien on the borrower’s principal residence
D. For any higher-priced mortgage loan

Answer 15

B

Question 16

In regard to a closed-end transaction involving a first-time buyer, a creditor may not extend credit with terms that may result in negative amortization:

A. Under any circumstances
B. Unless the bar were signs a waiver in which he expresses his understanding of and consent to this condition
C. Without receiving documentation that the consumer has obtained homeownership counseling from HUD-approved counselor
D. Without first providing all appropriate disclosures

Answer 16

D

Question 17

Which of the following is true about the right of rescission granted under the truth in lending act?

A. It applies to first and second mortgages
B. It applies only to a loan secured by the borrower’s principal residence
C. It applies only to a residential mortgage transaction involving a loan to purchase a property
D. If there are multiple borrowers, only one can be designated as having the right to rescind

Answer 17

B

Question 18

Interest, service charges, transaction charges, buyers points, loan fees and mortgage insurance or examples of what is included in the dollar amount called:

Answer 18

The finance charge

Question 19

Which of the following documents provides the borrower with information about prepayment penalties?

A. Both the LE and CD
B. The 1003
C. The CD
D. The LE

Answer 19

A?

Question 20

The Federal Financial Institution Regulatory Agencies includes all of the following except:

A. The national credit union administration
B. The comptroller of the currency
C. The board of governors of the Federal Reserve system
D. The American Association of residential mortgage regulators

Answer 20

A?

Question 21

The annual mortgage insurance premium is

A. Based on whether the property is in a low-cost or a high-cost area
B. The same for all FHA loans
C. Based on the loan term in the loan-to-value ratio
D. Based on the borrower’s credit rating

Answer 21

C

Question 22

TILA restrictions for higher-priced mortgage loans require an escrow account

A. Only for taxes
B. Only if the loan is a first lien on the borrower’s principal dwelling
C. For a first or second lien on the borrower’s principal residence
D. For any higher-priced mortgage loan

Answer 22

B

Question 23

The CFPB special information booklet:

A. Cannot be stamped with the mortgage broker company’s name
B. Can be reproduced in any form
C. Can be part of other larger documents
D. Cannot be translated into other languages

Answer 23

D?