Safe Exam Flashcards
A borrower has a right to ask for a copy of the appraisal under ECOA after denial:
A: Within 60 days
B: Within 30 days
C: Within 90 days
D: Within 120 Days
A: within 60 days
A borrower must receive the disclosure to the right to receive a copy of the appraisal required by ECOA:
A: anytime during the application process
B: within 7 days of application
C: within 7 days of closing
D: At application or within 3 days thereof
A: Anytime during the process
A creditor may ask about an applicant’s marital status:
A: True, as long as the information is used to determine whether credit is extended
B: False, asking such a question is considered discrimination
C: True, as long as the information is not used to determine whether credit will be extended
D: False, this information does not matter and creditors should not ask
C: True, as long as the information is not used to determine whether credit will be extended
A creditor must notify an applicant of its intended action on an application within __ days after the application is received.
A: 60
B: 120
C: 90
D: 30
D: 30
A mortgage broker may inform an applicant that federal law requires the broker o ask about the race, sex, martial status, and age by putting the information on a web site.
A: False, this information must be given to the applicant in person
B: True, as long as the applicant consents and can access the information
C: False, The information must be communicated directly through e-mail
D: True, as long as the information remains available for 30 days
B: True, as long as the applicant consents and can access the information
According to ECOA, how quickly after a credit decision must the borrower request a free copy of their appraisal report?
A: 3 days
B: 30 days
C: 60 Days
D: 90 days
D: 90 days
According to ECOA, how quickly must the appraisal be delivered to the borrower when they have requested said report within 90 days of a credit decision?
A: 3 days
B: 10 days
C: 30 days
D: 60 Days
C: 30 days
According to ECOA, one must retain proof of compliance for how long?
A: 0 months for business and 25 months for residential
B: 12 months for business and 24 months for residential
C: 12 months for business and 25 months for residential
D: No separate document retention times
C: 12 months for business and 25 months for residential
According to ECOA, the appraisal disclosure generally must be delivered to the borrower when?
A: Within 3 days of application
B: Within 30 days of application
C: Prior to closing
D: within 90 days of closing
A: Within 3 days of application
Any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit is a:
A: buyer
B: Creditor
C: Lender
D: Adjunct
B: Creditor
ECOA protects borrowers based on:
A: Credit score
B: Geographic Area
C: physical characteristics
D: Disability
C: physical characteristics
Entities making business or commercial loans must maintain records or other data relating to those loans for a period of no less than _ year(s), in order to ____.
A. 3, keep statistics on the ethnic makeup of their client roster
B. 1, prove compliance with FCRA and TIL
C. 1, prove compliance with the ECOA
D. 3, show evidence of yearly volume
C. 1, prove compliance with the ECOA
Entitites making residential mortgage loans must maintain records or other data relating to those loans for a period of no less that _)), in order to _____.
A. 2 years, keep statistics on the ethnic makeup of their client roster
B. 25 months, prove compliance with the ECOA
C. 1 year, prove compliance with FCRA & TIL
D.5 years, show evidence of average yearly volume
B. 25 months, prove compliance with the ECOA
How many years does a consumer have to take civil action against a credit suspected of violating the ECOA?
A. 5
B. 3
C. 2
D. 1
C. 2
If a borrower is denied a loan request due to the credit score not meeting lender’s guidelines, what must be done next?
A. The borrower must be verbally informed
B. Mail a copy of credit with instructions to dispute scoring
C. Initiate an Adverse Action Notice
D. Make a counter offer of loan terms
C. Initiate an Adverse Action Notice
Once a loan application is complete according to ECOA, a credit decision must be made within:
A. 30 days
B. 60 days
C. 90 days
D: Not defined
A. 30 days
The term ____ does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is either delinquent or in default or where additional credit would exceed a previously established credit limit.
A. reverse action
B. adverse action
C. delinquency
D. redlining
B. adverse action
Under ECOA, how long must one keep mortgage records?
A. 12 months
B. 25 Months
C. 36 Months
D. 2 Years
26 months
Under ECOA, what information must be sent to a borrower, in writing, who has been denied?
A. Name of CRA and issue with appraisal
B. Name & address of lender & federal agencies who ensure compliance
C. Name & address of applicant & credit scores
D. Name, address of originator, and unique identifier
B. Name & address of lender & federal agencies who ensure compliance
What agency governs ECOA?
A. Federal Reserve Board of Govenors
B. HUD
C. FDIC
D. Federal Housing Admin
A. Federal Reserve Board of Govenors
What entity provides guidelines & rules for ECOA?
A. HUD
B. Federal reserve system
C. Federal bank & loan board
D. Fannie Mae
B. Federal reserve system
What is permissible to ask about for ECOA?
A. The account on the credit report for which another person is liable
B. The applicant’s child bearing intents
C. Marital status
D Religion
C. Marital status
What is the primary purpose of ECOA?
A. The ensure applicants have equal access to credit
B. To ensure creidt information is reported equally
C. To require disclosure of closing costs
D. To require clear disclosure of credit terms
A. The ensure applicants have equal access to credit
When can you ask about religion under ECOA?
A. It is required for HMDA data reporting.
B. When the borrower notes that he does not wish to furnish on 1003
C. When there is business purpose to ask
D. Never, under no circumstances
D. Never, under no circumstances
When can you discriminate against age?
A. When the person is collecting SS
B. When the person is 82 years old and is requesting a 30 year term
C. When the person is too young to sign contracts
D. No age discrimination ever
C. When the person is too young to sign contracts
What is the average origination fee at the time of transaction?
A. 1
B. 2
C. 3
D. 4
B. 2
A loan officer normally makes between $2,000-$5,000 per deal. He does a loan for his cousin and charges a $500 fee, plus receives .50% in YSP for a $500K loan.
A. The loan officer has acted legally and ethically and
shown no preferential treatment
B. the loan officer has acted illegally & unethically & shown no preferential treatment
C. The loan officer has acted legally & unethically & shown no preferential treatment
D. The loan officer has acted illegally unethically & shown preferential treatment
A. The loan officer has acted legally and ethically and shown no preferential treatment
A loan originator is doing the loan for a family member, and his company requires he makes $5,000 on every loan. He charges $5,000 on the front end and ears 1% YSP ($3,000). What is the loan originator is doing for his family is:
A. Legal / ethical
B. Illegal / unethical
C. Illegal / unethical
D. Legal / unethical
D. Legal / unethical
A responsible borker ___ arranges co-signed mortgages.
A. Always
B. Never
C. Sometimes
D. I don’t know
C. sometimes
A self employed borrower says most of his money is ran through his business and asks, “How much money do I need to qualify?” What is the best response?
A. Can your accountant prepare a YTD P&L?
B. What is the greatest amount ever earned?
C. Let’s take a look at your taxes & bank statements to determine your income
D. What is the lowest amount of income reported in the last 3 years?
C. Let’s take a look at your taxes & bank stmts to determine your income
A self-employed borrower is applying for a mortgage loan. During the loan app he asks, “How much income do I need to show in order to qualify for this loan?” What is the most ethical response?
A. As must as possible. What do you claim on your tax returns?
B. You shouldn’t show less than $5,300 per month
C. Let me ask the underwriter for a minimum amount
D. Let’s review your tax returns and bank statements to determine your income
D. Let’s review your tax returns and bank statements to determine your income
A vendor taking advantage of the consumer by charging unjustly high prices through fraud or lack of alternatives is called:
A. Unbundling
B. Price Gouging
C. Padding Recording Fees
D. Balloon Payment
B. Price Gouging
Balloon payment loans are ____ predatory loans.
A. always
B. not always
C. never
D. I don’t know
B. not always
Charging borrowers above the legally set rate for this step in the loan process is:
A. Price Gouging
B. Inflated Appraisal Costs
C. Unbundling
D. Padding Fees
D. Padding Fees
Duplicating costs that should be included under other charges is ___.
A. Unbundling
B. Price Gouging
C. Padding Recording Fees
D. Inflated Appraisal Costs
A. Unbundling
If a child misses payments on a loan co-signed by her parents, whose credit will be affected?
A. Only the child’s
B. The parents only
C. Both
D. No ones
C. Both
Predatory lending increased greatly in the ___.
A. 60s
B. 70s
C. 80s
D. 90’s
D. 90’s
Pushing subprime products upon vulnerable or underserved groups for reasons other than credit quality is___.
A. steering
B. subprime lending
C. reverse redlining
D. contract knavery
A. steering
What is meant by the term “ethics?”
A. an overall system of beliefs or values which help us decide right and wrong, good and bad
B. specific rules that tell us how to behave morally
C. The goal of good behavior
D. the actions we take and the decisions we make that reflect a system of beliefs
D. the actions we take and the decisions we make that reflect a system of beliefs
What is it acceptable to forge a borrower’s signature on loan documents?
A. when it is the best interest of time & ease for borrower
B. never
C. when the borrower says it’s okay
D. when it is office policy
B. never
Which of the following is NOT a sign of predatory lending?
A. full disclosure of the loan terms
B. credit insurance is tacked on w/o explanation
C. Equity will be lost in the home
D. the consumer is encouraged to sign over the deed to his house
A. full disclosure of the loan terms
Who reaps the benefit of ethical behavior in mortgage transactions?
A. the borrower and the broker
B. the mortgage industry
C. just the borrower
D. everyone
D. everyone
Affiliates wishing to use consumer information for marketing purposes may do so if they either inform the consumer of the marketing or the consumer was given a chance to ___.
A. receive a discount
B. opt out
C. close their loan
D. rescind
B. opt out
FACTA amends the _____.
A. patriot act
B. fair credit reporting act
C. bill of rights
D. truth in lending act
B. fair credit reporting act
FACTA was an update and amendment to which of the following?
A. real estate settlement procedures act
B. fair credit reporting act
C. home ownership affordability and stability program
D. USA patriot act
B. fair credit reporting act
