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SAFE 20 MLO 260 > SAFE Mortgage Loan Originator > Flashcards

SAFE Mortgage Loan Originator Flashcards

Pass National Originator Test

1
Q

The Real Estate Settlement Procedures Act (RESPA is implemented as:

a. Regulation B
b. Regulation X
c. Regulation A
d. Regulation Z

A

b. Regulation X

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2
Q

Which government agency enforces the RESPA regulations?

a. CFPB
b. FCC
c. FHA
d. FTC

A

a. CFPB; Consumer Financial Protection Bureau

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3
Q

RESPA is concerned with:

a. Kickbacks
b. Credit reports
c. Triggering terms in ads
d. U.S. security

A

a. Kickbacks

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4
Q

Good Faith Estimate/Loan Estimate must be sent to the borrower within how many business days of receiving a loan application?

a. 1
b. 3
c. 5
d. 10

A

b. 3 days

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5
Q

The special Information Booklet must be sen to to the borrower within how many business days of receiving a loan application?

a. 1
b. 3
c. 5
d. 10

A

b. 3 days

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6
Q

The mortgage Servicing Disclosure Statement must e sent to the borrower within how many business days of receiving a loan application?

a. 1
b. 3
c. 5
d. 10

A

b. 3 days

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7
Q

How often must a summary of escrow activity statement be sent to a borrower?

a. Once a month
b. Once every 3 months
c. Once every 6 months
d. Once every year

A

Once every year

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8
Q

RESPA requires which of the following to be given to the borrower when the loan servicer changes?

a. Servicing Transfer 
    Statement
b. Good Faith Estimate
c. Truth in Lending Disclosure
d. Initial Escrow Statement
A

a. Servicing Transfer Statement

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9
Q

When must a referring party give the affiliated Business Arrangement Disclosure to the consumer?

a. Within 3 days of loan 
    application
b. Within 15 days of the loan 
    application
c. At or prior to the time of 
    referral
d. At closing
A

c. At or prior to the time of

referral

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10
Q

A borrower is entitled to request an obtain a copy of the HUD-1 Settlement Statement how many days before closing?

a. 1
b. 3
c. 5
d. 7

A

a. 1 day

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11
Q

After an escrow account analysis, money must be refuded if the over-paid amout equals or exceeds:

a. $50
b. $100
c. $250
d. $500

A

a. $50

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12
Q

The servicer has how many days to notify the borrower if the servicing rights have been sold and are being transferred to another company?

a. 3
b. 5
c. 10
d. 15

A

d. 15 days

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13
Q

A borrower who makes a timely payment to the old servicer after a loan transfer, can be penalized after how many days if he still is not sending the payment to the correct servicer.

a. 30
b. 60
c. 90
d. 120

A

b. 60 Days

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14
Q

What is the maximum criminal penalty for a kickback violation?

a. $500 and 6 months in 
     prison
b. $1000 and 6 months in 
    prison
c. $10,000 and a year in 
     prison
d. $25,000 and a year in 
     prison
A

c. $10,000 and a year in prison

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15
Q

The HUD-1 Settlement Statement is required for what type of transaction?

a. Cash purchase of a condo
b. Financed purchase of a
warehouse
c. Reverse mortgage
d. Cash purchase of a strip
mall

A

c. Reverse Mortgage

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16
Q 
The maximum escrow cushion that a lender can require is:
a. 1/6 of total yearly 
    disbursements
b. 1/3 of total yearly 
    disbursements
c. 1/2 of total yearly 
    disbursements
d. 3/4 of total yearly 
    disbursements
A

a. 1/6 of total yearly

disbursements

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17
Q

The lender has how many days after settlement to refund any portion of charges on the HUD-1 that exceeded the acceptable variance?

a. 15
b. 30
c. 45
d. 60

A

b. 30 days

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18
Q

The Equal Credit Opportunity Act (ECOA) is implemented as:

a. Regulation B
b. Regulation X
c. Regulation A
d. Regulation Z

A

a. Regulation B

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19
Q

ECOA allows an applicant to have a copy of his:

a. Credit score
b. Credit report
c. Property appraisal report
d. Bank records

A

c. Property appraisal report

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20
Q

What government agency enforces ECOA?

a. FCC
b. HUD
c. CFPB
d. FHA

A

c. CFPB

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21
Q

A lender can discriminate base on:

a. Age
b. Sex
c. Credit history
d. Race

A

c. Credit history

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22
Q

How many days does a lender have after receipt of an application to notify the applicant of its action on the application?

a. 10
b. 15
c. 30
d. 60

A

c. 30 days

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23
Q

How many days does an applicant have after receipt of an adverse notice to request a statement of reasons from the lender?

a. 10
b. 15
c. 30
d. 60

A

d. 60 days

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24
Q

How many days does a lender have to send a statement of reasons for an adverse action after receiving a request from an applicant?

a. 10
b. 15
c. 30
d. 60

A

c.30 days

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25
Q

The Truth-in-Lending Act (TILA ) is implemented as:

a. Regulation B
b. Regulation X
c. Regulation D
d. Regulation Z

A

d. Regulation Z

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26
Q

The Truth-in-Lending Act (TILA) was implemented by the:

a. Federal Reserve Board
b. Fannie Mae
c. Federal Bureau of
Investigation
d. Federal Express

A

a. Federal Reserve Board

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27
Q

The Truth-in-Lending Act (TILA) is administered by:

a. DVA
b. FCC
c. FHA
d. CFPB

A

d. CFPB

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28
Q

The TILA disclosure must be given to the applicant within how many days after receiving the signed loan application for a reverse mortgaged?

a. 3 business days
b. 5 business days
c. 7 business days
d. 14 business days

A

a. 3 days

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29
Q

Which of the following is NOT a trigger term?

a. 5% interest rate
b. 200 monthly payment
c. Lowest rates in town
d. 48 easy payments

A

c. Lowest interest rates in town

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30
Q

The Right of Rescission does not apply to:

a. Refinance loans
b. Second Mortgage
c. Home improvement
d. First mortgage on a
purchase

A

d. First mortgage on a

purchase

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31
Q

The TILA must be re-disclosed if the APR for a fixed-rate loan changes by more than:

a. 1/8%
b. 1/2%
c. 3/4%
d. 1%

A

a. 1/8%

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32
Q

HOEPA considers a loan to be high cost if the total charges to the borrower exceed what percent of the loan amount?

a. 4%
b. 5%
c. 10%
d. 12%

A

b. 5%

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33
Q

The Truth-in-Lending Disclosure must be delivered within how many business days prior to closing a reverse mortgage?

a. 3
b. 7
c. 10
d. 15

A

b. 7 days

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34
Q

The APR must be finalized at least how many days before closing?

a. 1
b. 3
c. 5
d. 7

A

b. 3 days

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35
Q

The Home Mortgage Disclosure Act (HMDA) was implemented by the:

a. Department of Housing and 
    Urban Development
b. Department of Veteran 
    Affairs
c. Federal Communication 
    Commission
d. Federal Reserve Board
A

d. Federal Reserve Board

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36
Q

HMDA is also known as:

a. Regulation B
b. Regulation C
c. Regulation X
d. Regulation Z

A

b. Regulation C

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37
Q

HMDA does NOT:

a. Send lending quotas for 
    protected classes
b. Require loan amounts to 
    be reported
c. Require the location of the 
    property to be reported
d. Require the race of the 
    borrower to be reported
A

a. Set Lending Quotas for

protected classes

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38
Q

Which of the following is NOT required HMDA borrower information?

a. Loan amount
b. Gender
c. Race
d. Age

A

d. Age

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39
Q

The Fair Credit Reporting Act is enforced by

a. HUD
b. FCC
c. FHA
d. FTC

A

d. FTC Federal Trade

Commission

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40
Q

Bankruptcies can be kept in the credit report for:

a. 2 years
b. 5 years
c. 7 years
d. 10 years

A

d. 10 years

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41
Q

Tax liens can be kept in the credit report for:

a. 2 years
b. 5 years
c. 7 years
d. 10 years

A

c. 7 years

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42
Q

Which of the following is NOT a credit repository?

a. FICO
b. TransUnion
c. Experian
d. Equifax

A

FICO

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43
Q

Borrows are entitled to a free credit report if the lender takes adverse action against them and they ask for their report with how many days of receiving notice of the action?

a. 30
b. 60
c. 90
d. 120

A

b. 60 days

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44
Q

Which Act includes provision to protect consumers personal financial information held by financial institutions?

a. Real Estate Settlement 
    Procedures
b. Fair and Accurate Credit 
    Transaction
c. Truth-in-Lending 
d. Gramm-Leach-Bliley
A

d. GLB, Gramm-Leach-Bililey

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45
Q

Which Act requires companies to give consumers privacy notices?

a. Real Estate Settlement 
    Procedures
b. Fair and Accurate Credit 
    Transaction
c. Truth-in-Lending 
d. Gramm-Leach-Bliley
A

d. GLB, Gramm-Leach-Bililey

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46
Q

What is the fine for Do Not Call violations?

a. $3,000
b. $49,000
c. $42,530
c. $60,000

A

c. $42,530

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47
Q

A company with which a consumer has an established business relationship may call for how many months after the consumer’s last purchase?

a. 6
b. 13
c. 18
d. 24

A

c. 18 months

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48
Q

If a consumer makes an inquiry or submits an application to a company, the company can call for how many months?

a. 3
b. 6
c. 9
d. 12

A

a. 3 months

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49
Q

What organization is allowed to call numbers on the Do Not Call List?

a. Loan originators
b. Charities
c. Car dealerships
d. Dry cleaners

A

b. Charities

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50
Q

The Fair Credit and Accurate Credit Transaction Act:

a. Prohibits kickbacks to title 
    companies
b. Provides that all 
    information in a credit 
    report is verified
c. Allows consumers one free 
    credit report per year from 
    each repository
d. Changes credit scoring to 
    a 1-5 ranking system
A

c. Allows one free credit report
per year from each
repository.

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51
Q

Who does the consumer contact if he has questions about his credit score?

a. Credit Reporting Agency
b. Lender
c. Title company
d. Appraiser

A

a. Credit Reporting Agency (CRA)

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52
Q

The range of possible credit scores is:

a. 200-900
b. 300-850
c. 400-700
d. 500-1000

A

b. 300-850

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53
Q

The Red Flag Rule is:

a. Identity theft
b. kickbacks
c. Disclosure of the APR
d. Regulation of interest rates

A

a. Identity theft

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54
Q

The Red Flag Rule is part of the:

a. Truth-in-Lending Act
b. Real estate Settlement
Procedures Act
c. SAFE Act
d. Fair and Accurate Credit
Transaction Act

A 
d. Fair and Accurate Credit 
    Transaction Act (FACTA)
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55
Q

Which of the following is a creditor as defined by the Red Flag Rule?

a. Mortgage broker
b. Beauty shop
c. Grocery store
d. Appraiser

A

a. Mortgage Broker

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56
Q

Which of the following is NOT a requirement for a company’s Red Flags program?

a. Be in writing
b. Identify and detect
warning signs of identity
theft
c. Detail appropriate
responses to the warning
signs
d. Managed by the Human
Resources department

A

d. Managed by the HR

department

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57
Q

If a loan estimate is mailed, it must be mailed how many days before loan consummation?

a. 1
b. 3
c. 5
d. 7

A

d. 7 days

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58
Q

A lender has how many days to refund excessive variances on a Closing Disclosure?

a. 10
b. 30
c. 60
d. 90

A

c. 60 days

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59
Q

A change to which of the following does NOT trigger a new 3 day waiting period?

a. Seller credits buyer money 
    for landscaping
b. APR
c. Loan product
d. Addition of a prepayment 
    penalty
A

a. Seller credits buyer money

for landscaping

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60
Q

How many business days before loan consummation is a borrower entitled to see a revised Closing Disclosure that did not trigger an additional 3-day waiting period?

a. 1
b. 2
c. 3
d. 4

A

a. 1 day

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61
Q

How many days before loan consummation is a seller entitled to see the Closing Disclosure?

a. 0 (closing day)
b. 1
c. 2
d. 3

A

a. 0 (Closing day)

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62
Q

When a consumer requests the cancellation of their escrow account, the lender has how many business days prior to closing the account to deliver an Escrow Closing Notice?

a. 1
b. 3
c. 10
d. 30

A

b. 3 days

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63
Q

When a lender cancels an escrow account for a reason other than default or termination caused by refinancing, refinancing, repayment or rescission, they have how many business days prior to closing the account to deliver an Escrow Closing Notice?

a. 1
b. 3
c. 10
d. 30

A

d. 30 days

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64
Q

For how many years must a lender retain the Loan Estimate?

a. 2
b. 3
c. 4
d. 5

A

b. 3 years

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65
Q

For how many years must the lender retain the Closing Disclosure?

a. 2
b. 3
c. 4
d. 5

A

d. 5 years

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66
Q

For how many years must the lender retain the Escrow Cancellation Notice?

a. 2 years
b. 3 years
c. 4 years
d. 5 years

A

a. 2 years

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67
Q

For how many years must a lender retain the Partial Payment Policy?

a. 2 years
b. 3 years
c. 4 years
d. 5 years

A

a. 2 years

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68
Q

The borrower must receive the Closing Disclosure how many business days before the consummation?

a. 1
b. 2
c. 3
d. 4

A

c. 3 days

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69
Q

Which of the following is not delivered to a reverse mortgage applicant?

a. TILA Disclosure
b. Loan Estimate
c. Good Faith Estimate
d. HUD1

A

b. Loan Estimate

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70
Q

Which of the following is not protected from discrimination by the Fair Housing Act?

a. HIV patients
b. Elderly
c. Pregnant women
d. Mexicans

A

b. Elderly

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71
Q

ECOA requires that a loan application is retained for how long after a denial?

a. 6 months
b. 25 months
c. 26 months
d. 60 months

A

c. 25 months

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72
Q

What should a loan originator do if an applicant refuses to disclose their nationality?

a. Leave it blank
b. Refuse the application
c. Select the box with their
best guess
d. Pester the applicant until
they answer

A

c. Select the box with their best

guess

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73
Q

What should a loan originator do on a Loan Estimate address field when the borrower request a pre-approval?

a. Leave it blank
b. Enter one or more zip
codes of likely locations
c. enter the applicants
personal address
d. Deny the loan application

A

b. Enter one or more zip codes

of likely locations

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74
Q

How many housing counseling agencies must be listed on the Housing Counseling Disclosure?

a. 1
b. 3
c. 5
d. 10

A

d. 10

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75
Q

What entity does HUD oversee?

a. Department of Health
b. Federal Housing
Administration
c. Department of Veterans
Affairs
d. Consumer Financial
Protection Bureau

A

b. Federal Housing

Administration

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76
Q

What is the maximum term for A HOEPA balloon bridge loan?

a. 12 months
b. 24 months
c. 36 months
d. 60 months

A

a. 12 months

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77
Q

A borrower must indicate an Intent to proceed within how many business days after receiving the Loan
Estimate?

a. 3
b. 10
c. 15
d. 30

A

b. 10 days

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78
Q

Which law enacted mandatory cancellation of PMI under certain circumstances?

a. Truth-in-Lending
b. RESPA
c. Homeowner Protection Act
d. Equal Credit Opportunity
Act

A

c. Home Owner Protection Act

(HPA)

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79
Q

What is the minimum number of hours for loan originator pre-licensing education?

a. 10
b. 20
c. 30
d. 40

A

b. 20 hours

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80
Q

What is the minimum number of hours for annual loan originator continuing education?

a. 2
b. 4
c. 8
d. 12

A

c. 8 hours

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81
Q

Which of the following do NOT need to be a licensed loan originator?

a. Independent contractors 
    who are loan originators
b. Independent contractors 
    who are underwriters
c. Independent contractors 
    who are loan processors
d. Federally chartered bank 
     employees
A

d. Federally Chartered bank

employees

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82
Q

Which of the following does NOT have to be submitted by a loan originator applicant?

a. Credit report authorization
b. Criminal background
check authorization
c. References
d. Finger prints

A

c. References

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83
Q

Mortgage loan originator licenses renew

a. Every 6 months
b. Every year
c. Every 2 years
d. Every 3 years

A

b. Every Year

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84
Q

The minimum passing score on the SAFE loan originator licensing exam is:

a. 65%
b. 75%
c. 80%
d. 90%

A

b. 75%

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85
Q

What is the maximum number of times the SAFE exam can be consecutively taken?

a. 2
b. 3
c. 4
d. 5

A

b, 3 times

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86
Q

What is the minimum number of days a student must wait between his first two SAFE exam retakes?

a. 10
b. 15
c. 30
d. 60

A

c. 30 days

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87
Q

After three consecutive attempts to pass the SAFE exam, what is the minimum amount of time a student must wait before trying again?

a. 1 month
b. 3 months
c. 6 months
d. 9 months

A

c. 6 months

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88
Q

Which of the following is NOT an immediate family member?

a. Adopted brother
b. Aunt
c. Grandfather
d. Stepmother

A

b. An Aunt

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89
Q

What may be true of registered loan originators?

a. They are independent 
    contractors
b. They must take the 
     national loan originator 
     exam
c. They are bank employees
d. They are licensed loan 
    originators
A

c. They are bank employees

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90
Q

Which of the following must be a licensed loan originator?

a. Commercial loan originator
b. Independent contractor
who is an underwriter
c. Supervised loan processor
employee
d. An individual who
negotiates the terms of his
own mortgage loan

A

b. Independent contractor who

is an underwriter.

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91
Q

How often must a mortgage company submit a report on their financial condition?

a. Monthly
b. Quarterly
c. Annually
d. Every 2 years

A

c. Annually

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92
Q

What is the maximum fine for a SAFE Act violation?

a. $1,000
b. $5,000
c. $15,000
d. $25,000

A

d. $25,000.00

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93
Q

Returning MLOs must retake the national exam after how many years of ?

a. 1
b. 3
c. 5
d. 7

A

d. 5 years

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94
Q

The mortgagor is the:

a. Lender
b. Borrower
c. Mortgage broker
d. Real estate Agent

A

b. Borrower

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95
Q

The mortgagee is the:

a. Lender
b. Borrower
c. Mortgage broker
d. Real estate agent

A

a. Lender

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96
Q

Mortgages are a (n):

a. Involuntary lien
b. Voluntary lien
c. Special Assessment
d. Mechanics lien

A

b. Voluntary lien

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97
Q

What establishes the lien position

a. Date and time of signing
b. Date and time the loan
was approved
c. Date and time of recording
d. Date and time of the title
search

A

c. Date and time of recording

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98
Q

Junior mortgages are:

a. Involuntary liens
b. Limited to 30 year terms
c. Limited to a total of 2
d. Voluntary liens

A

d. Voluntary lien

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99
Q

Which is NOT a promise by the mortgagor?

a. Keep the home in good 
    repair
b. Obey all state and county 
    laws
c. pay the hazard insurance
d. pay the mortgage payment
A

b. Obey all state and county

laws

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100
Q

What is the enforcement of a lien?

a. Arrest
b. Bankruptcy
c. Foreclosure
d. Mediation

A

c. Foreclosure

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101
Q

A lender may choose NOT to take a Legal action upon default and this is known as:

a. Forbearance
b. Exculpation
c. Fortitude
d. Deficiency

A

a. Forbearance

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102
Q

Which clause allows the lender to increase the interest rate?

a. Acceleration clause
b. Escalation clause
c. Deficiency judgement
d. Exculpatory clause

A

b. Escalation

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103
Q

Which is NOT beneficial to a developer?

a. Blanket mortgage
b. Subordination clause
c. Development clause
d. Partial release clause

A

c, Development clause

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104
Q

Which is not essential for a valid contract

a. $2,000 in reserves
b. Competent parties
c. Consideration
d. Mutual agreement

A

a. $2,000 in reserve

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105
Q

Tenancy in Common does NOT have:

a. Equal or unequal 
    ownership
b. Buy at same or different 
    times
c. Multiple owners
d. Right of survivorship
A

d. Right of survivorship

106
Q

How many days after settlement does the lender have to send the Satisfaction of Mortgage letter?

a. 10 days
b. 15 days
c. 30 days
d. 60 days

A

d. 60 days

107
Q

When there is no new note and the original buyer retains all the liability. this is known as transferring
title by

a. Creative financing
b. Assumption
c. Novation
d. Subject to the mortgage

A

d. Subject to the mortgage

108
Q

The assignor:

a. Transfers contract rights
b. receives contract rights
c. Must be a United States
citizen
d. Must b an attorney

A

a. Transfers contract rights

109
Q

Which of the following is not an involuntary lien?

a. Judgement lien
b. Mortgage lien
c. Mechanics Lien
d. IRS tax lien

A

b. Mortgage lien

110
Q

The pledging of property as collateral for a loan:

a. Defeasance
b. Hypothecation
c. Exculpation
d. Intermediation

A

b. Hypothecation

111
Q

The conveyor of the deed is the:

a. Grantor
b. Lender
c. Grantee
d. Mortgagor

A

a. Grantor

112
Q

The receiver of the deed is the:

a. Grantee
b. Grantor
c. Mortgagee
d. Assignee

A

a. Grantee

113
Q

Which document is not recorded?

a. Note
b. Satisfaction of Mortgage
c. Mortgage
d. Deed

A

a. The Note

114
Q

The borrower’s IOU is the:

a. Mortgage
b. Note
c. Loan-to Value Ratio
d. Equity

A

b. The Note

115
Q

A clause in some mortgages which allows subsequent mortgages on the same property to have a higher claim than the current mortgage is a:

a. Subordination clause
b. Penalty clause
c. Privilege clause
d. Inferior clause

A

a. Subordination clause

116
Q

Which of the following does not include the Right of Survivorship?

a. Good faith Estimate
b. Tenants in Common
c. Joint Tenancy
d. Truth-in-Lending disclosure

A

B. Tenants in Common

117
Q

The document conveying title from one party to another and guaranteeing that the title is good is known as a:

a. Good Faith
b. Warranty Deed
c. Usury limit
d. Red Flags document

A

b. Warranty Deed

118
Q

The mortgage lien on an entire tract of land is known as

a: Buy-down mortgage
b. Chattel mortgage
c. Blanket mortgage
d. Pillow mortgage

A

c. Blanket mortgage

119
Q

Liens which are subsequent to the first recorded mortgage lien are known as:

a. Junior liens
b. Unavailable lien
c. Estoppel liens
d. Homestead liens

A

a. Junior liens

120
Q

What percentage of of a FHA loan is insured?

a. 100%
b. Is partially guaranteed
c. Has a 5% late fee
d. Is not assumable

A

a. 100%

121
Q

FHA maximum loan amounts:

a. Are set by the U.S. 
    Department of State
b. Do not include the Up 
    Front Mortgage Insurance 
    Premium
c. Are set at $500,000
d. Are set at $1,000,000
A

b. Do not include the Up Font
Mortgage Insurance
Premium. (UFMIP)

122
Q

A VA mortgage does not include:

a. It is partially guaranteed
b. It has mortgage insurance
premium
c. It has a 4% late fee
d. No required down payment

A

b. Mortgage insurance

premium

123
Q

A VA appraisal is known as a:

a. Qualified appraisal
b. Certificate of reasonable
value
c. Certificate of market value
d. VA designated market
appraisal

A

b. Certificate of reasonable

value.

124
Q

A USDA loan has:

a. 100% financing
b. No income limits
c. A 5% late fee
d. Has no geographical
restrictions

A

100% financing

125
Q

A conventional mortgage does NOT have a

a. 3% minimum down 
    payment
b. 5% late fee
c. Due on sale clause
d. Borrower income limit
A

d. Borrower income limit

126
Q

Interest rates are set by:

a. FHA
b. Lenders
c. VA
d. Fannie Mae

A

b. Lenders

127
Q

A reverse mortgage is an example of

a. Positive amortization
b. Negative amortization
c. Lender error
d. Bridge loan

A

b. Negative amortization

128
Q

In an adjustable rate mortgage:

a. Index+Fulling indexed    
    rate= 
    margin
b. Fully indexed 
    rate+margin=index
c. Index+margin= fully index 
    rate
d. Index-margin= fully indexed 
    rate
A

c. Index + Margin = fully

indexed rate

129
Q

Which of the following is expressed as basis points in an adjustable rate mortgage

a. Index
b. Margin
c. Fully indexed rate
d. Term

A

b. Margin

130
Q

A 2/3/7 ARM ha a:

a. Lifetime cap of 2%
b. Lifetime cap
of 3%
c. Lifetime cap of 7%
d. Lifetime cap of 10%

A

c. Lifetime cap of 7%

131
Q

If a 15 year ARM has a starting interest rate of 5% and has an adjustment rate cap of 2% and a lifetime cap of 8%, what is the maximum interest rate that can be charged for the first adjustment period?

a. 5 1/4%
b. 5 1/2%
c. 7%
d. 13%

A

c. 7%

132
Q

A term mortgage is NOT:

a. Non-amortizing
b. Interest only
c. Satisfied by a final lump
sum payment
d. Fully amortized

A

d. Fully amortized

133
Q

A graduated payment mortgage

a. Is for college graduates 
    only
b. Has payments that start 
    low and increase over time
c. Has payments that start 
    high and decrease over 
    time
d. Is only for borrowers with a 
    minimum age of 62
A

b. Has payments that start low

and increase over time

134
Q

Borrower’s equity equals

a. Appraised value-loan 
    balance
b. Appraised value-down 
    payment
c. Loan balance+down 
    payment
d. Loan balance-down 
    payment
A

a. Appraisal value - loan

balance

135
Q

Escrow impounds are collect by the:

a. Lender
b. Attorney
c. Police
d. Seller

A

a. Lender

136
Q

Private Mortgage Insurance (PMI) is required for:

a. FHA loans
b. VA loans
c. Jumbo loans
d. Conventional loans when
there is less than a 20%
down payment

A

d. Conventional loans when
there is less than a 20%
down payment

137
Q

What type of mortgage has a fixed interest rate and increasing payments?

a. Adjustable rate mortgage
b. Package mortgage
c. Growing equity mortgage
d. Wraparound mortgage

A

c. Growing equity mortgage

138
Q

The FHA is an agency with the:

a. Department of the Veterans Affairs
b. Department of HUD
c. Department of Fannie Mae
d. Private organization

A

b. HUD Department

139
Q

PITI is the acronym for:

a. Property, insurance, taxes 
    and interest
b. Property, interest, taxes 
     and insurance
c. Principal, insurance  taxes 
    and interest
d. Principle, interest, taxes, 
    and insurance
A

C. Principal, interest, taxes, and

insurance

140
Q

What are the indexes potentially used in an ARM?

a. CD rate
b. The London Inter-Bank
Offered Rate
c. The Chase Fluctuating
Index
d. The New York Times Index

A

b. London Inter-Bank Offered

Rate and the Treasury rate

141
Q

A bi-weekly mortgage is:

a. Is paid every 2 weeks
b. Is paid ever 2 months
c. Is not legal
d. Has no mandatory
payment schedule

A

a. Is paid every 2 weeks

142
Q

Which has the superior lien position?

a. Senior Mortgage
b. Junior Mortgage
c. Mortgages under $250,000
d. First signed mortgage

A

a. Senior Mortgage

143
Q

80 basis points equals what percentage of the loan amount?

a. .08%
b. .8%
c. 8%
d. 80%

A

a. .8%

144
Q

Which lien will most likely have the lowest lien position?

a. Property tax
b. Senior mortgage
c. Junior mortgage
d. IRS tax lien

A

d. IRS tax lien

145
Q

A gift letter does NOT include?

a. Donor,s name
b. amount of the gift
c. Terms of repayment
d. Donor’s address

A

c. Terms of repayment

146
Q

A partially amortized loan which consists of a lump sum payoff at the end of the term is:

a. Balloon mortgage
b. Package mortgage
c. Chattel mortgge
d. Buy-down mortgage

A

a. Balloon mortgage

147
Q

A mortgage with a payment due every 2 weeks is a

a. Package mortgage
b. Bridge loan
c. Bi-weekly mortgage
d. Blanket mortgage

A

a Bi-weekly mortgage

148
Q

A VA appraisal is known as a:

a. Certificate of Eligibility
b. Certificate of Occupancy
c. Certificate of Reasonable
Value
d. Certificate of Domicile

A

c. Certificate of Reasonable

Value

149
Q

The fluctuating economic indicator used in an ARM is
the:

a. Index
b. Margin
c. Collateral
d. Basis point

A

b. the Index

150
Q

A loan in which interest is subsidized for a stated period of time is a:

a. Buy-down mortgage
b. Term mortgage
c. Bridge loan
d. Collateral loan

A

a. Buy-down mortgage

151
Q

Who CANNOT contribute money towards the borrower’s down payment?

a. Employer
b. Real estate agent
c. Domestic partner
d. Borrower’s relative

A

b. Real estate agent

152
Q

What is the maximum FHA seller concession?

a. 3%
b. 4%
c. 6%
d. 9%

A

c. 6%

153
Q

What is the maximum VA seller concession?

a. 3% + standard closing  
    costs
b. 4% + standard closing costs
c. 6% + standard closing  
    costs
d. 9% + standard closing 
    costs
A

c. 6% + standard closing costs
( answer may be simply 4%
for national exam)

154
Q

What is the minimum down payment usually required for non-owner occupied rental property?

a. 5%
b. 10%
c. 15%
d. 20%

A

d. 20%

155
Q

Borrowers must be notified of an ARM rate change how many months before the initial reset?

a. 1
b. 3
c. 6
d. 9

A

6 months

156
Q

What is the cost of 2 3/4 discount points on s 450,000 loan?

a. $1,237.50
b. $3,375.00
c. $12,375.00
d. $13,750.00

A

c. $12,375.00 Discount points x loan amount

157
Q

There are 10 days left in the month when the loan closes. The purchase price is $325,000. and the loan amount is $280,000. at 6.75% interest. How much interest does the borrower owe for the remainder of the month?

a. $517.81
b. $601.03
c. $720.15
d. $813.22

A

a. $517.81 loan amount x

interest rate/365x10 =

158
Q

The purchase price is $300,000; and the appraisal value is $290,000., and the LTV is 80%. What is the loan amount?

a. $220,000
b. $232,000
c. $240,000
d. $248,000

A

b. $232,000. Loan amount or
appraised value whichever is
lower x the LTV

159
Q

The monthly PITI is $1,000. and the gross monthly income is $5,000. According to standard Fannie Mae guidelines, what is the Housing Expense ratio?

a. 5%
b. 20%
c. 36%
d. 50%

A

b. 20%, PITI x monthly income =

160
Q

An employee works 40 hours a week at 12.50 per hour. What is his gross monthly income?

a. $ 2,000.00
b. $2,166.67
c. $2,245.78
d. $2,400.00

A

b. $2,166.67, Hourly rate x
hours per week x 52 weeks
in a year/12 months=

161
Q

The borrowers October mortgage payment has not yet been received on October 17. He has a 175,000. VA loan; monthly P&I is $1,280.; Annual PMI is $1,800.; annual hazard insurance is 2,400., and annual property taxes are 3,350. What is the late charge?

a. $42.20
b. $48.00
c. $51.20
d. $64.30

A

c. $51.20, P&I x VA
allowable percentage rate
4% =

162
Q

A property originally closed in November 2012. A refinance of that property is closing in March 2013. How many months of hazard insurance will be collected at closing?

a. 3
b. 5
c. 6
d. 7

A

c. 6 Number of months current
annual policy has been in
effect = 2 months cushion=

163
Q

How many years of home addresses are required on the typical loan application?

a. 1 year
b. 2 years
c. 3 years
d. 4 years

A

b. 2 years

164
Q

How many years of employment history may be required on the loan application?

a. 1 year
b. 2 years
c. 3 years
d. 4 years

A

b. 2 years

165
Q

What is usually NOT required of a loan applicant?

a. Photo ID
b. Personal references
c. 2 months of bank or
brokerage statements
d. 30 days previous pay stub

A

b. Personal references

166
Q

Commission, bonus or dividend income is usually averaged over:

a. 1 years
b. 2 years
c. 3 years
d. 4 years

A

b. 2 years

167
Q

In order to be counted as income, retirement income must continue for how long after the loan application is
signed?

a. 1 year
b. 2 years
c. 3 years
d. 4 years

A

c. 3 years

168
Q

In order to be counted as income, alimony must continue for how long after the loan application is signed?

a. 1 year
b. 2 years
c. 3 years
d. 4 years

A

c. 3 years

169
Q

If there is no minimum monthly credit card payment what percent of the balance is used in the calculation of monthly debt?

a. 1%
b. 3%
c. 5%
d. 10%

A

c. 5%

170
Q

How many months must be left on a car lease payment in order to be included as a debt?

a. More than 1 month
b. More than 5 month
c. More than 10 month
d. Automobile lease payments are always included

A

d. Automobile lease payments

are always included

171
Q

How many months must be left on an installment charge in order to be included as a debt?

a. More than 1 month
b. More than 3 month
c. More than 5 month
d. More than 10 month

A

d. 10 months

172
Q

Fannie Mae total Total Obligation Ratio is:

a. 10%
b. 26%
c. 36%
d. 46%

A

c. 36%

173
Q

Payment for alimony must continue for how long after the application date in order to be included as a debt?

a. 1 month
b. 10 months
c. 2 years
d. 3 years

A

b. 10 months

174
Q

A lock-in agreement does NOT include:

a. Interest rate
b. Expiration date
c. Lock-in-fee
d. APR

A

d. APR

175
Q

Which IRS form does a lender use to verify a applicants income?

a. 2071
b. 321-ml
c. 911-r
d. 4506-T

A

d. 4506-T

176
Q

Fannie Mae requires how many years of credit and public records review?

a. 1 year
b. 3 years
c. 5 years
d. 7 years

A

d. 7 years

177
Q

Bankruptcy can be kept on the credit report for a maximum of:

a. 3 years
b. 5 years
c. 7 years
d. 10 years

A

d. 10 years

178
Q

Credit reports for new construction cannot be older than:

a. 30 days
b. 90 days
c. 120 days
d. 180 days

A

c. 120 days

179
Q

FICO stands for:

a. Federal Interest  
    Corporation
b. Fair Isaac Corporation
c. Freddie,insurance  
    Company
d. Fannie's International Credit 
    organization
A

b. Fair Isaac Corporation

180
Q

If two credit scores are obtained for a single borrower the representative score that is usually used is;

a. The higher score
b. The lower score
c. It doesn’t matter
d. What is the policy of the
Mortgage Broker business

A

b. The lower score

181
Q

If three credit scores are obtained for a single borrower the representative score the is usually used is:

a. The higher score
b. The lower score
c. The middle score
d. What is the policy of the
Mortgage Broker business

A

c. The middle score

182
Q

The maximum age limit for a borrower is:

a. 65
b. 75
c. 85
d. There is no maximum age
limit

A

There is no maximum age limit

183
Q

A guarantor or co-signer signs the:

a. Mortgage
b. Note
c. Deed
d. Mortgage and the note

A

b. Note

184
Q

Which of the following is NOT a national credit repositories?

a. Experian
b. Fannie Mae
c. TransUnion
d. Equifax

A

b. Fannie Mae

185
Q

What minimum percentage of ownership of a business is required for an individual to be considered self-employed?

a. 10%
b. 25%
c. 50%
d. 75%

A

b. 25%

186
Q

Which of the following is NOT an escrow impound?

a. Title insurance
b. Property insurance
c. Flood insurance
d. Hazard insurance

A

a. Title insurance

187
Q

Fannie Mae generally wants how many months of liquid financial reserves after closing?

a. 1 month
b. 2 months
c. 3 months
d. 4 months

A

b. 2 months

188
Q

A co-borrower whose income is used to qualify must sign the:

a. Mortgage
b. Note
c. Mortgage and the Note
d. They are not required to
sign anything

A

c. Mortgage and the Note

189
Q

Fannie Mae requires a non-qualifying spouse whose income is not used in qualifying to sign the:

a. Mortgage
b. Note
c. Mortgage and the Note
d. They are not required to
sign anything

A

a. Mortgage

190
Q

If a mortgage is secured by the primary residence, Fannie Mae allows how many total properties to be financed?

a. No limit
b. 3
c. 5
d. 10

A

a. No limit

191
Q

Which form is used to summarize the information in the loan package?

a. Fannie Mae 1006- 
    Verification of Deposit
b. Fannie Mae 1005 - 
    Verification of Employment
c. Fannie Mae 1008 - 
    Transmittal Summary
d. Fannie Mae 1003 - Loan 
    Application
A

c. Fannie Mae 1008 -

Transmittal Summary

192
Q

Which form is used to verify employment information?

a. Fannie Mae 1006- 
    Verification of Deposit
b. Fannie Mae 1005 - 
    Verification of Employment
c. Fannie Mae 1008 - 
    Transmittal Summary
d. Fannie Mae 1003 - Loan 
     Application
A

b, Fannie Mae 1005 -

Verification of Employment

193
Q

Which form is used to verify bank accounts?

a. Fannie Mae 1006- 
    Verification of Deposit
b. Fannie Mae 1005 - 
    Verification of Employment
c. Fannie Mae 1008 - 
    Transmittal Summary
d. Fannie Mae 1003 - Loan 
    Application
A

a. Fannie Mae 1006 -

Verification of Deposit

194
Q

What piece of information is not required in order to have a legal loan application?

a. Consumer name
b. Consumer monthly income
c. Estimated property value
d. Consumer signature

A

d. Consumer signature

195
Q

Fannie Mae’s automated underwriting system is known as:

a. Loan Prospector (LP)
b. Desktop Underwriter (DU)
c. Daniels Underwriting
System (DUS)
d. Limited Portfolio (LP)

A

b. Desktop Underwriter (DU)

196
Q

Freddie Mac’s automated underwriting system is known as:

a. Loan Prospector (LP)
b. Desktop Underwriter (DU)
c. Daniels Underwriting
System (DUS)
d. Limited Portfolio (LP)

A

a. Loan Prospector

197
Q

Who makes the final decision as to whether a loan will be funded?

a. Automated underwriting 
    system
b. The lender
c. The real estate agent
d. The closing agent
A

b. The Lender

198
Q

The automated underwriting system can NOT be used for what types of loans?

a. FHA
b. VA
c. Conventional
d. Jumbo

A

d. Jumbo loans

199
Q

Who does Fannie Mae hold responsible for the quality of the appraisal?

a. Appraiser
b. Real estate agent
c. Lender
d. Title company

A

c. The lender

200
Q

An appraisal must be re-certified if it is older than:

a. 1 month
b. 4 months
c. 6 months
d. 12 months

A

b. 4 months

201
Q

The most probable price which a property should bring in an open market is:

a. Median price
b. Market value
c. Going rate
d. insurance value

A

b. Market value

202
Q

The highest and best use of the property is not:

a. Legally permissible
b. Physically possible
c. Financially feasible
d. Based on possible future
zoning changes

A

d. Based on possible future

zoning changes

203
Q

The appraisal approach that best applies to residential property is:

a. Sales Comparison 
    Approach
b. Cost Approach
c. Residential Approach
d. Income Capitalization 
    Approach
A

a. Sales Comparison Approach

204
Q

The appraisal approach that best applies to vacant land?

a. Sales Comparison 
    Approach
b. Cost Approach
c. Residential Approach
d. Income Capitalization 
    Approach
A

a. Sales Comparison Approach

205
Q

The appraisal approach that best applies to a school?

a. Sales Comparison 
    Approach
b. Cost Approach
c. Residential Approach
d. Income Capitalization 
    Approach
A

b. Cost Approach

206
Q

What is the minimum number of closed sales comparable that can be used in the Sales Comparison Approach?

a. 1
b. 3
c. 6
d. 8

A

b. 3

207
Q

What is the most important type of comparable used in the Sales Comparison Approach?

a. Active
b. Pending
c. Closed
d. Expired

A

c. Closed

208
Q

The method used to value income producing properties based on the rental incomes and sales prices of similar properties is call the:

a. GRM
b. BBQ
c. CDR
d. TRA

A

a. GRM

209
Q

In a completion escrow account, what is the minimum estimated repair cost held in trust by the lender?

a. 50%
b. 90%
c. 120%
d. 200%

A

c. 120%

210
Q

A legally binding letter from the lender to the mortgagor stating the terms of the loan is:

a. A Commitment letter
b. A Letter of intent
c. A discover notice
d. A conditional letter

A

a. A commitment letter

211
Q

Who handles complaints regarding mortgage loan rejections?

a. FCC
b. FHA
c. VA
d. CFPB

A

d. CFPB

212
Q

All of the following apply to a mortgagor’s title insurance policy EXCEPT:

a. It is for the amount of the 
    purchase price
b. It is based on loan amount
c. It is optional
d. It is not transferable
A

b. It is based on loan amount

213
Q

Surveys are NOT certified to:

a. Lenders
b. Title insurers
c. Buyers
d. Real estate broker

A

d. Real Estate Broker

214
Q

What gives someone other than the owner the right to be on the property for a specific purpose?

a. Mechanics liens
b. Easement
c. Encumbrance
d. Declaration of intention

A

b. Easement

215
Q

What is a clause in the deed that limits the future use of a property?

a. Deed restriction
b. Encumbrance
c. Title lien
d. Owner’s privilege

A

a. Deed restriction

216
Q

The most common type of legal description for residential subdivision is:

a. Monument method
b. Lot and Block
c. Metes and bounds
d. Government land survey
method

A

b. Lot and Block

217
Q

A fee charged to the borrower for determining whether or not a property was in a flood zone is a:

a. Mapper fee
b. Flood certification fee
c. FEMA fee
d. Reviewer fee

A

b. Flood certification fee

218
Q

Which form is used as the standard settlement form?

a. HUD/1 Closing disclosure
b. FHA Closing Statement
c. U.S.A. Settlement
Statement
d. National Closing
Statement

A

a. HUD-1/Closing Disclosure

219
Q

The day of closing is May 15. When is the first loan payment due?

a. June 1
b. July 1
c. August 1
d. June 16

A

b. July 01

220
Q

The most accurate type of legal description for residential subdivision is:

a. Monument method
b. Lot and Block
c. Metes and bounds
d. Government land survey
method

A

c. Metes and bounds

221
Q

Which of the following is an acceptable source of funds at closing?

a. Sweat equity
b. Cash on hand
c. Personal check
d. Wire transfer

A

d. Wire transfer

222
Q

What type of funding occurs when a lender obtains funds from a line of credit at a commercial bank?

a. Credit lending
b. Table funding
c. Warehouse funding
d. Temporary funding

A

c. Warehouse funding

223
Q

The late fee for FHA and VA loans is:

a. 3% of principle and interest
b. 4% of principle and interest
c. 5% of principle and interest
d. 10% of principle and interest

A

b. 4%

224
Q

When a lender sells a mortgage loan to another lender this is called?

a. Assignment of mortgage
b. Note transfer
c. Vendor selling
d. Linking a mortgage

A

a. Assignment of mortgage

225
Q

When a assignor keeps the servicing rights this is known as:

a. Selling a loan with escrow 
    impounds
b. Selling a loan with 
    servicing released
c. Selling a loan with 
    servicing retained
d. Selling a loan pro norma
A

c. Selling a loan with servicing

retained

226
Q

Ginnie Mae does:

a. Buy loans
b. Sell loans
c. Fund loans
d. Guarantee loans

A

d. Guarantee loans

227
Q

Fannie Mae was established in:

a. 1914
b. 1938
c. 1962
d. 1980

A

b. 1938

228
Q

Fannie Mae will not purchase a mortgage secured by a :

a. Urban area residential 
    property
b. Orchard
c. Rural area residential 
    property
d. Suburban area residential 
    property
A

b. Orchard

229
Q

Which title insurance policy is transferable?

a. Mortgagor
b. Mortgagee
c. Restricted use
d. Conforming

A

b. Mortgagee

230
Q

The title company considers unpaid property taxes to be an:

a. Encroachment
b. Encumbrance
c. Easement
d. Engress

A

b. Encumbrance

231
Q

The principal of value that focuses on the most profitable, legal use to which a property can be put is:

a. Principle of Satisfaction
b. Principle of Substitution
c. Principle of Highest and
Best Use
d. Principle of Conformity

A

c. Principle of Highest and Best Use

232
Q

A Point of Beginning is used in what type of survey?

a. government land survey
b. Plat map
c. Metes and Bounds
d. Circle and Grid

A

c. Metes and Bounds

233
Q

A neighbors fence that crosses over on to another property is an example of an:

a. Encroachment
b. Encumbrance
c. Exculpation
d. Egress

A

a. Encroachment

234
Q

An outstanding claim on a property that limits the ability to sell the property is a:

a. Title defect
b. Subordination
c. Penalty
d. Fault fee

A

a. Title defect

235
Q

The national trade association and voice of the abstract and title insurance industry is:

a. TICOA
b. ATC
c. ALTA
d. TITLE NOW

A

c. ALTA

236
Q

Under the federal fair housing law, the seven protected classes include:

a. Race, color source of 
    income, handicap, national 
    origin, marital status, 
    religion
b. Race, color religion, sex, 
    handicap, familial status, 
    national origin
c. Race , sexual orientation, 
    sex, familial status, 
    handicap, age, national 
    origin
d. Race, color, age, religion, 
    sex, handicap, familial 
    status
A

b. Race, color, religion, sex,
handicap, familial status,
national origin

237
Q

Under RESPA , a real estate professional may give in return for the referral of real estate settlement service business a:

a. Caribbean cruise
b. $50
c. Thank you
d. Kickback

A

c. Thank you

238
Q

A real estate broker may pay a referral fee to:

a. A closing agent
b. A past customer
c. A mortgage broker
d. Another real estate
brokerage firm

A

d. Another real estate

brokerage firm

239
Q

Who can provide closed sales comparables to an appraiser?

a. Real estate agent
b. Underwriter
c. Mortgage broker
d. Lender

A

a. Real estate agent

240
Q

Which of the following is NOT a common type of mortgage fraud?

a. Rehabilitation
b. Equity skimming
c. Inflated appraisal s
d. Property flipping

A

a. Rehabilitation

241
Q

What is the mortgage fraud scam called when a broker INVENTS borrowers properties?

a. Equity skimming
b. Air loan
c. Silent second
d. Property flipping

A

b. Air loan

242
Q

What are the 2 types of mortgage fraud the FBI investigates?

a. Fraud for profit and fraud 
    for housing
b. East coast and west coast 
c. Domestic and international
d. Appraisers and mortgage 
    brokers
A

a. Fraud for profit and fraud for

housing

243
Q

A lender’s refusal to lend in a particular neighborhood is known as:

a. Referential lending
b. Redemption
c. Railroading
d. Redlining

A

d. Redlining

244
Q

A fee charged for the use of money is:

a. Interest
b. Usury
c. Rent
d. Lease

A

a. Interest

245
Q

A mortgage on personal property is a(an);

a. Chattel mortgage
b. Reverse mortgage
c. Ad valorem mortgage
d. Participation mortgage

A

a. Chattel mortgage

246
Q

One discount point equals 1% of the:

a. Purchase price
b. Annual percentage rate
c. Loan amount
d. Appraisal value

A

c. Loan amount

247
Q

Net worth is defined as:

a. Cash plus real property
b. Cash plus stocks and
bonds
c. Assets minus liabilities
d. Liquid assets plus real
property

A

c. Assets minus liabilities

248
Q

The liquidation of a debt by regular, usually monthly installments of principal and interest is:

a. Amortization
b. Hypothecation
c. Assignment
d. Novation

A

a. Amortization

249
Q

The withdrawal of funds out of savings accounts and into stocks and bonds is known as:

a. Intermediation
b. Disintermediation
c. Acceleration
d. Exculpation

A

b. Disintermediation

250
Q

The condemnation of private property for public good is:

a. Eminent Domain
b. Escheat
c. Disintermediation
d. Interstate

A

a. Eminent Domain

251
Q

Notice which is not recorded is known as:

a. Construction notice
b. Actual notice
c. Selective notice
d. Lis pendens notice

A

b. Actual notice

252
Q

Notice which is recorded is known as:

a. Constructive notice
b. Actual notice
c. Selective notice
d. Lis pendens notice

A

a. Constructive notice

253
Q

The use of borrowed funds to increase yield is:

a. Leverage
b. Acceleration
c. Defeasance
d. forbearance

A

a. Leverage

254
Q

A mortgage note that does NOT limit recovery solely from the property is call a:

a. Note endorsed with 
    recourse
b. Hybrid loan
c. Multi-level Loan
d. Non-recourse Note
A

a. Note endorsed with recourse

255
Q

APOR stands for:

a. Average Price of Ratios
b. Annual Percentage of
Refinancing
c. Average Prime Offer Rate
d. Annual Percentage
Reimbursement

A

c. Average Prime Offer Rate

256
Q

A discount point costs?

a. $100
b. $1,000
c. 1 percent of loan amount
d. 10 percent of loan amount

A

1% of loan amount

257
Q

ECOA defines elderly as:

a. 55 years old
b. 62 years old
c. 65 years old
d. 70 years old

A

b. 62 years old

258
Q

The right to use land owned by another is an:

a. Easement
b. Acquisition
c. Exposition
d. Alienation

A

a. Easement

259
Q

The act of lowering the priority of a mortgage lien is:

a. Reduction
b. Subordination
c. Degradation
d. Subtraction

A

b. Subordination

260
Q

A loan offered to a consumer with poor credit is know as:

a. Subjugation
b. Alternative
c. Preliminary
d. Subprime

A

a. Subprime

SAFE 20 MLO 260 (1 decks)

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