Random Flashcards
What is the minimum credit score for a FHA 203B program?
500
Which loan program offers interest credits?
MCC
Dodd Frank contains 16 Titles. Which title is largely about residential mortgage finance?
TITLE XIV–MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT
Which Federal Law Prohibits Kickbacks and Unearned fees from being collected?
RESPA
Should the lender not be made whole in the foreclosure process, the lender may be able to seek additional relief known as “recourse” through the courts by seeking a [blank].
Deficiency judgment
The uniform Residential Loan Application is also known as the [blank]
1003
What would the debt to income ratio be for a borrower with $4000 per month in income and total debts including PITI of $1600?
$1600/$4000 = .40 or 40% DT
Which entity issues housing bonds?
State Housing Finance Agencies (HFAs)
Cash to close, Monthly Payments, and Foreseeable and unforeseeable homeownership expenses are examples of [blank].
Transaction Costs
2008 Housing and Economic Recovery Act of 2008 (HERA) established this entity
Federal Housing Finance Agency (FHFA)
In Lien Theory states, the real property is pledged to the lending institution which has a lien on the real property as evidence of their interest and evidenced by a [blank].
Evidenced by a Mortgage
What is the maximum financing percentage on a VA loan?
100.00%
The consumer may receive a revised version of the Loan Estimate no later than _______ DAY(S) prior to consummation.
4
Dodd Frank established in the Federal Reserve System, an independent bureau to be known as the [blank], which shall regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws.
Bureau of Consumer Financial Protection
At a minimum, how many underwriting factors must a creditor consider when underwriting a Qualified mortgage?
8
On a higher priced Balloon transaction, what is the qualifying payment based on?
The maximum payment in the payment schedule, including any balloon payment, for a higher-priced covered transaction
Which form(s) did the closing disclosure replace?
HUD-1
The [blank] is a contract in which a title company agrees to issue a policy subject to the conditions, exceptions, and exclusions shown in the commitment.
Preliminary Title Commitment
For Qualified mortgages, the creditor must underwrite the loan using a the highest possible principal and interest payment that may apply during the first [blank] years of the loan.
5
Comparable sales that have closed within the last [blank] months should be used in the appraisal.
12 Months
Which disclosure details costs and expenses at application?
Loan Estimate
Low initial payments based on a fixed introductory rate, that expires after a short period and then adjusts to a variable index rate, plus a margin for the remaining term of the loan can lead a borrower to [blank]
Payment Shock
Which entity administers Section 8?
State Housing Finance Agencies (HFAs)
To give borrowers reasonable time to submit such applications, servicers cannot make the first notice or filing required for the foreclosure process until a mortgage loan account is more than [blank] days delinquent.
120
The [blank] must ensure that the title is generally acceptable and that the mortgage constitutes a lien of the required priority on a fee simple or leasehold estate in the property.
Title Insurance Policy
By allowing the Buying and Selling of first mortgages, the 1934 Housing Act had what effect on the mortgage markets?
It added Liquidity to the Mortgage markets
The SAFE Act states that “ [blank] means any mortgage product other than a 30-year fixed-rate mortgage”
Nontraditional Mortgage Product
What are the qualifying debt ratios for a FHA loan?
31/43
The act or process of developing an opinion of value is known as [blank]
Appraisal
What is the most popular credit scoring model?
FICO
A mortgage, in which a large portion of the borrowed principal is repaid in a single payment, at the end of the loan period prior to full amortization is a:
Balloon Loan
On the Closing Disclosure, under which Loan Cost Category should the appraisal be listed?
Category B, Services the Borrower Did Not Shop For
Inducing a borrower to repeatedly refinance a loan, in order to charge high points and fees, each time the loan is refinanced; is known as:
Loan Flipping
Servicers must generally provide a response to consumer requests, for the payoff balances of their mortgage loans within [blank] business days of receiving a written request.
7
blank] is when a senior lien permits a junior lien to have payoff priority.
Subordination
A monetary Fee that is charged with, the early payoff or pay down of a mortgage would be known as:
Prepayment Penalty
Special payment calculation rules apply for Qualified loans with balloon payments, interest-only payments, or negative amortization (must qualify using maximum possible rate/payment in the first ________ year(s) of the term).
5
On a title Insurance Policy which Schedule defines the Insured, and the real estate covered by the policy?
Schedule A
On a title Insurance Policy which Schedule defines the Standard and General Exceptions for the policy?
Schedule B
On a closed end transaction, which form is required to be provided to a borrower three days before consummation?
Closing Disclosure
Which program is the basic FHA 96.5% LTV program?
203b
Which form(s) did the Loan Estimate replace?
Good Faith Estimate and Truth-in-lending form
What is the standard range of credit scoring base FICO scores?
300-850
If a settlement service provider refers settlement services to another company that they have an ownership interest in, they have a/an [blank].
Affiliated Business Arrangement
Presenting good options and engaging the customer in the solution are part of [blank].
Product selection
[blank] means an individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain.
Mortgage Loan Originator
The receipt, collection, and distribution of information common for the processing or underwriting of a loan in the mortgage industry is commonly known as [blank].
Administrative or Clerical Tasks
In the Sales Comparison Approach, the Appraiser ultimately selects a single comparable of [blank] or more comparables selected in the comparative analysis to drive the opinion of value.
3
Which Federal Law regulates escrows to control creditors from making excessive escrow collections?
RESPA
[blank] occurs judicially, but differs from more common judicial foreclosure action in that the title to the property is granted to the lender, by the court as opposed to the court ordering an auction.
Non Judicial Foreclosure
According to the SAFE Act how many hours of Pre-licensing Education are required for a Mortgage Loan Originator License?
20
All states allow [blank] foreclosure, and in some states this is the only remedy for default.
Judicial
What is the standard UFMIP for FHA loans?
1.75%
Dodd Frank is a very big law, what is one of the more significant consumer protections derived from the passage of Dodd Frank?
To protect consumers from abusive financial services practices
What is the Loan to Value on a loan where the sales price/appraised value is $350,000 and the loan amount is $280,000?
80.00%
The length of the National Test Component with Uniform State Content has ____ questions.
125
[blank] is the generally recognized ethical and performance standard for the appraisal profession.
USPAP
Amendments to Regulation Z implement statutory changes made by the Dodd-Frank Act, that extend the time required to maintain a mandatory escrow account established for a Higher-Priced mortgage loan to [blank] years from [blank] year.
Five Years / One Year
What is the per diem interest on a loan amount of $100,000 and interest rate of 5.5% based on a 365 day year? (Round up to nearest cent)
$15.07
What form must be provided to consumers no later than the third business day after they submit a loan application?
Loan Estimate
If an individual fails three consecutive Loan originator pre-licensing tests, the individual must wait at least [blank] months before taking the test again.
six
[blank] is the process of determining from the public record just what rights in real property are and who owns them.
Title Search
Which determination must an underwriter make when considering a borrowers income?
Ability to repay
The CFPB was created by Title X of Dodd Frank. The CFPB is an Executive agency within what part of the US government?
The Federal Reserve System
What is the Passing percentage for the national MLO licensing test?
75%
The [blank] approach to value, assumes that a potential purchaser will consider building a substitute residence, that has the same use as the property being appraised.
Cost Approach
The LE/CD disclosures are for use with:
Federally Related Closed End Fixed rate Mortgages Secured to Real Property
A limit on how much the payment amount, or the interest rate may increase is known as [blank]
Payment or Rate caps
Usually for mortgages, the [blank] establishes priority for payment.
The chronological order of recording
An individual would be eligible for a loan originator license if they have never been convicted of, pled guilty or nolo contendere to a felony in any court in the [blank] year period preceding the date of the application for licensing.
7
What are the qualifying debt ratios for a USDA loan?
29/41
A lender, who wants the title insurer to be responsible for the agent’s acts in connection with closing must separately contract with the title insurer for such additional protection.
This creditor protection is evidenced by which of the following?
The Closing Protection Letter
Title insurance, The origination of a federally related mortgage loan, and The underwriting and funding of loans are examples of [blank] as defined by RESPA.
Settlement Services
What are the qualifying debt ratios for a VA loan?
41
In Title Theory states, the buyer of the property actually grants a power of sale right to a trustee and generally conveys legal title to this trustee at consummation or closing and evidenced by a [blank].
Evidenced by a Deed of Trust
Loans to borrowers should be made on [blank] rather than [blank].
Ability to Repay / Foreclosure Value
From an investor’s standpoint, one very significant aspect of mortgage financing is the relative security of the investor’s investment. Which of the following instruments establishes the investor’s security?
The Deed of Trust
Which Federal Law is Intended to protect consumers from excessive or unreasonable pricing of services from settlement providers?
RESPA
For adjustable-rate Qualified mortgages, the monthly payment must be calculated using the [blank] or an [blank] rate, whichever is higher.
Fully Indexed / Introductory
The primary mission of FinCEN is:
FinCEN’s mission is to safeguard the financial system from illicit use
This type of foreclosure, also known as statutory foreclosure, is allowed by many states if the mortgage includes a power of sale clause.
Non-Judicial
What is the number one obstacle to Homeownership?
Cash to Close
In regards to Mortgage Loan Origination Licensing [blank] determine if licensure is required, not [blank].
Activities / Job Title
What law established the 3-day right of rescission rule?
TILA
TILA requires lenders to disclose the ______ _______ ______ ______ to consumer applicants.
Complete cost of credit
If an application for credit is DENIED based on the appraisal under ECOA (Reg B) says the borrower has _____ days to request a copy/ lender has _____ days to deliver.
90 days to request
30 days to deliver
ECOA requires the regulators to _____ _____ when extending credit.
Be Equal “Regulation B”
HMDA allows regulators to “C” where possible discrimination is taking place.
Regulation C
HMDA information is located where?
Section X (TEN)
of the 1003 loan application
(ethnicity, gender)
HPA stands for
Homeowners protection Act
Does HPA deal with PMI or MIP?
PMI
MIP is for FHA loans
What kind of loans have PMI
Conventional loans NOT government loans.
Does PMI protect the borrower or the lender?
the lender
SAFE act stands for
Secure and Fair Enforcement Act
HERA stands for
Housing and Economic Recovery Act
What law created the SAFE Act?
HERA
FACT Act stands for
Fair and Accurate Credit Transactions Act
FACT Act deals with
Identity Theft
FACT Act rules:
Section 114 Rules
“Red Flag Rules”
What 3 policies are under GLBA?
SPF
Safeguarding
Pretexting
Financial Privacy
What is a Safeguarding policy?
GLBA
a policy on how businesses will keep our credit card information safe.
What is Pretexting policy?
GLBA
A policy to keep others from gaining your information under false pretenses (pretending to be you).
“pretenders”
example: security questions
What is a Financial Privacy policy?
GLBA
governs the collection of non-public information and how it is shared with affiliates.
(opt-in, opt-out)
HOEPA Section 32
High Cost Loans (Part of TILA)
HOEPA Section 35
Higher Priced Loans (Part of TILA)
AfBA/ ABA
Affiliated Business Arrangements (1%)
If you have 1% interest in the other business you have to disclose this immediately (at the time of referral.)
Civil Rights Act of 1866 is about _______
RACE
Escrow Account is also known as a
impound account or a reserve account
Escrow accounts create a budget mortgage (PITI)
