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
2
Q
Which government agency enforces the RESPA regulations?
a. CFPB
b. FCC
c. FHA
d. FTC
A
a. CFPB; Consumer Financial Protection Bureau
3
Q
RESPA is concerned with:
a. Kickbacks
b. Credit reports
c. Triggering terms in ads
d. U.S. security
A
a. Kickbacks
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
20
Q
What government agency enforces ECOA?
a. FCC
b. HUD
c. CFPB
d. FHA
A
c. CFPB
21
Q
A lender can discriminate base on:
a. Age
b. Sex
c. Credit history
d. Race
A
c. Credit history
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
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
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
25
The Truth-in-Lending Act (TILA ) is implemented as:
a. Regulation B
b. Regulation X
c. Regulation D
d. Regulation Z
d. Regulation Z
26
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. Federal Reserve Board
27
The Truth-in-Lending Act (TILA) is administered by:
a. DVA
b. FCC
c. FHA
d. CFPB
d. CFPB
28
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. 3 days
29
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
c. Lowest interest rates in town
30
The Right of Rescission does not apply to:
a. Refinance loans
b. Second Mortgage
c. Home improvement
d. First mortgage on a
purchase
d. First mortgage on a
| purchase
31
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. 1/8%
32
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%
b. 5%
33
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
b. 7 days
34
The APR must be finalized at least how many days before closing?
a. 1
b. 3
c. 5
d. 7
b. 3 days
35
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
```
d. Federal Reserve Board
36
HMDA is also known as:
a. Regulation B
b. Regulation C
c. Regulation X
d. Regulation Z
b. Regulation C
37
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. Set Lending Quotas for
| protected classes
38
Which of the following is NOT required HMDA borrower information?
a. Loan amount
b. Gender
c. Race
d. Age
d. Age
39
The Fair Credit Reporting Act is enforced by
a. HUD
b. FCC
c. FHA
d. FTC
d. FTC Federal Trade
| Commission
40
Bankruptcies can be kept in the credit report for:
a. 2 years
b. 5 years
c. 7 years
d. 10 years
d. 10 years
41
Tax liens can be kept in the credit report for:
a. 2 years
b. 5 years
c. 7 years
d. 10 years
c. 7 years
42
Which of the following is NOT a credit repository?
a. FICO
b. TransUnion
c. Experian
d. Equifax
FICO
43
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
b. 60 days
44
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
```
d. GLB, Gramm-Leach-Bililey
45
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
```
d. GLB, Gramm-Leach-Bililey
46
What is the fine for Do Not Call violations?
a. $3,000
b. $49,000
c. $42,530
c. $60,000
c. $42,530
47
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
c. 18 months
48
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. 3 months
49
What organization is allowed to call numbers on the Do Not Call List?
a. Loan originators
b. Charities
c. Car dealerships
d. Dry cleaners
b. Charities
50
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
```
c. Allows one free credit report
per year from each
repository.
51
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. Credit Reporting Agency (CRA)
52
The range of possible credit scores is:
a. 200-900
b. 300-850
c. 400-700
d. 500-1000
b. 300-850
53
The Red Flag Rule is:
a. Identity theft
b. kickbacks
c. Disclosure of the APR
d. Regulation of interest rates
a. Identity theft
54
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
```
d. Fair and Accurate Credit
Transaction Act (FACTA)
```
55
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. Mortgage Broker
56
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
d. Managed by the HR
| department
57
If a loan estimate is mailed, it must be mailed how many days before loan consummation?
a. 1
b. 3
c. 5
d. 7
d. 7 days
58
A lender has how many days to refund excessive variances on a Closing Disclosure?
a. 10
b. 30
c. 60
d. 90
c. 60 days
59
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. Seller credits buyer money
| for landscaping
60
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. 1 day
61
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. 0 (Closing day)
62
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
b. 3 days
63
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
d. 30 days
64
For how many years must a lender retain the Loan Estimate?
a. 2
b. 3
c. 4
d. 5
b. 3 years
65
For how many years must the lender retain the Closing Disclosure?
a. 2
b. 3
c. 4
d. 5
d. 5 years
66
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. 2 years
67
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. 2 years
68
The borrower must receive the Closing Disclosure how many business days before the consummation?
a. 1
b. 2
c. 3
d. 4
c. 3 days
69
Which of the following is not delivered to a reverse mortgage applicant?
a. TILA Disclosure
b. Loan Estimate
c. Good Faith Estimate
d. HUD1
b. Loan Estimate
70
Which of the following is not protected from discrimination by the Fair Housing Act?
a. HIV patients
b. Elderly
c. Pregnant women
d. Mexicans
b. Elderly
71
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
c. 25 months
72
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
c. Select the box with their best
| guess
73
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
b. Enter one or more zip codes
| of likely locations
74
How many housing counseling agencies must be listed on the Housing Counseling Disclosure?
a. 1
b. 3
c. 5
d. 10
d. 10
75
What entity does HUD oversee?
a. Department of Health
b. Federal Housing
Administration
c. Department of Veterans
Affairs
d. Consumer Financial
Protection Bureau
b. Federal Housing
| Administration
76
What is the maximum term for A HOEPA balloon bridge loan?
a. 12 months
b. 24 months
c. 36 months
d. 60 months
a. 12 months
77
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
b. 10 days
78
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
c. Home Owner Protection Act
| (HPA)
79
What is the minimum number of hours for loan originator pre-licensing education?
a. 10
b. 20
c. 30
d. 40
b. 20 hours
80
What is the minimum number of hours for annual loan originator continuing education?
a. 2
b. 4
c. 8
d. 12
c. 8 hours
81
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
```
d. Federally Chartered bank
| employees
82
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
c. References
83
Mortgage loan originator licenses renew
a. Every 6 months
b. Every year
c. Every 2 years
d. Every 3 years
b. Every Year
84
The minimum passing score on the SAFE loan originator licensing exam is:
a. 65%
b. 75%
c. 80%
d. 90%
b. 75%
85
What is the maximum number of times the SAFE exam can be consecutively taken?
a. 2
b. 3
c. 4
d. 5
b, 3 times
86
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
c. 30 days
87
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
c. 6 months
88
Which of the following is NOT an immediate family member?
a. Adopted brother
b. Aunt
c. Grandfather
d. Stepmother
b. An Aunt
89
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
```
c. They are bank employees
90
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
b. Independent contractor who
| is an underwriter.
91
How often must a mortgage company submit a report on their financial condition?
a. Monthly
b. Quarterly
c. Annually
d. Every 2 years
c. Annually
92
What is the maximum fine for a SAFE Act violation?
a. $1,000
b. $5,000
c. $15,000
d. $25,000
d. $25,000.00
93
Returning MLOs must retake the national exam after how many years of ?
a. 1
b. 3
c. 5
d. 7
d. 5 years
94
The mortgagor is the:
a. Lender
b. Borrower
c. Mortgage broker
d. Real estate Agent
b. Borrower
95
The mortgagee is the:
a. Lender
b. Borrower
c. Mortgage broker
d. Real estate agent
a. Lender
96
Mortgages are a (n):
a. Involuntary lien
b. Voluntary lien
c. Special Assessment
d. Mechanics lien
b. Voluntary lien
97
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
c. Date and time of recording
98
Junior mortgages are:
a. Involuntary liens
b. Limited to 30 year terms
c. Limited to a total of 2
d. Voluntary liens
d. Voluntary lien
99
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
```
b. Obey all state and county
| laws
100
What is the enforcement of a lien?
a. Arrest
b. Bankruptcy
c. Foreclosure
d. Mediation
c. Foreclosure
101
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. Forbearance
102
Which clause allows the lender to increase the interest rate?
a. Acceleration clause
b. Escalation clause
c. Deficiency judgement
d. Exculpatory clause
b. Escalation
103
Which is NOT beneficial to a developer?
a. Blanket mortgage
b. Subordination clause
c. Development clause
d. Partial release clause
c, Development clause
104
Which is not essential for a valid contract
a. $2,000 in reserves
b. Competent parties
c. Consideration
d. Mutual agreement
a. $2,000 in reserve
105
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
```
d. Right of survivorship
106
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
d. 60 days
107
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
d. Subject to the mortgage
108
The assignor:
a. Transfers contract rights
b. receives contract rights
c. Must be a United States
citizen
d. Must b an attorney
a. Transfers contract rights
109
Which of the following is not an involuntary lien?
a. Judgement lien
b. Mortgage lien
c. Mechanics Lien
d. IRS tax lien
b. Mortgage lien
110
The pledging of property as collateral for a loan:
a. Defeasance
b. Hypothecation
c. Exculpation
d. Intermediation
b. Hypothecation
111
The conveyor of the deed is the:
a. Grantor
b. Lender
c. Grantee
d. Mortgagor
a. Grantor
112
The receiver of the deed is the:
a. Grantee
b. Grantor
c. Mortgagee
d. Assignee
a. Grantee
113
Which document is not recorded?
a. Note
b. Satisfaction of Mortgage
c. Mortgage
d. Deed
a. The Note
114
The borrower's IOU is the:
a. Mortgage
b. Note
c. Loan-to Value Ratio
d. Equity
b. The Note
115
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. Subordination clause
116
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
c. Joint Tenancy
117
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
b. Warranty Deed
118
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
c. Blanket mortgage
119
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. Junior liens
120
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. 100%
121
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
```
b. Do not include the Up Font
Mortgage Insurance
Premium. (UFMIP)
122
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
b. Mortgage insurance
| premium
123
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
b. Certificate of reasonable
| value.
124
A USDA loan has:
a. 100% financing
b. No income limits
c. A 5% late fee
d. Has no geographical
restrictions
100% financing
125
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
```
d. Borrower income limit
126
Interest rates are set by:
a. FHA
b. Lenders
c. VA
d. Fannie Mae
b. Lenders
127
A reverse mortgage is an example of
a. Positive amortization
b. Negative amortization
c. Lender error
d. Bridge loan
b. Negative amortization
128
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
```
c. Index + Margin = fully
| indexed rate
129
Which of the following is expressed as basis points in an adjustable rate mortgage
a. Index
b. Margin
c. Fully indexed rage
d. Term
b. Margin
130
A 2/3/7 ARM ha a:
a. Lifetime cap of 2%
b. Lifetime cape of 3%
c. Lifetime cap of 7%
d. Lifetime cap of 10%
c. Lifetime cap of 7%
131
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%
c. 7%
132
A term mortgage is NOT:
a. Non-amortizing
b. Interest only
c. Satisfied by a final lump
sum payment
d. Fully amortized
d. Fully amortized
133
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
```
b. Has payments that start low
| and increase over time
134
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. Appraisal value - loan
| balance
135
Escrow impounds are collect by the:
a. Lender
b. Attorney
c. Police
d. Seller
a. Lender
136
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
d. Conventional loans when
there is less than a 20%
down payment
137
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
c. Growing equity mortgage
138
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
b. HUD Department
139
PITI is the acronym for:
```
a. Property, insurance, taxes
and interest
b. Property, interest, taxes
and insurance
c. Principle, insurance taxes
and interest
d. Principle, interest, taxes,
and insurance
```
d. Principle, interest, taxes, and
| insurance
140
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
b. London Inter-Bank Offered
| Rate and the Treasury rate
141
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. Is paid every 2 weeks
142
Which has the superior lien position?
a. Senior Mortgage
b. Junior Mortgage
c. Mortgages under $250,000
d. First signed mortgage
a. Senior Mortgage
143
80 basis points equals what percentage of the loan amount?
a. .08%
b. .8%
c. 8%
d. 80%
a. .8%
144
Which lien will most likely have the lowest lien position?
a. Property tax
b. Senior mortgage
c. Junior mortgage
d. IRS tax lien
d. IRS tax lien
145
A gift letter does NOT include?
a. Donor,s name
b. amount of the gift
c. Terms of repayment
d. Donor's address
c. Terms of repayment
146
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. Balloon mortgage
147
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 Bi-weekly mortgage
148
A VA appraisal is known as a:
a. Certificate of Eligibility
b. Certificate of Occupancy
c. Certificate of Reasonable
Value
d. Certificate of Domicile
c. Certificate of Reasonable
| Value
149
The fluctuating economic indicator used in an ARM is
the:
a. Index
b. Margin
c. Collateral
d. Basis point
b. the Index
150
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. Buy-down mortgage
151
Who CANNOT contribute money towards the borrower's down payment?
a. Employer
b. Real estate agent
c. Domestic partner
d. Borrower's relative
b. Real estate agent
152
What is the maximum FHA seller concession?
a. 3%
b. 4%
c. 6%
d. 9%
c. 6%
153
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
```
c. 6% + standard closing costs
( answer may be simply 4%
for national exam)
154
What is the minimum down payment usually required for non-owner occupied rental property?
a. 5%
b. 10%
c. 15%
d. 20%
d. 20%
155
Borrowers must be notified of an ARM rate change how many months before the initial reset?
a. 1
b. 3
c. 6
d. 9
6 months
156
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
c. $12,375.00 Discount points x loan amount
157
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. $517.81 loan amount x
| interest rate/365x10 =
158
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
b. $232,000. Loan amount or
appraised value whichever is
lower x the LTV
159
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%
b. 20%, PITI x monthly income =
160
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
b. $2,166.67, Hourly rate x
hours per week x 52 weeks
in a year/12 months=
161
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
c. $51.20, P&I x VA
allowable percentage rate
4% =
162
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
c. 6 Number of months current
annual policy has been in
effect = 2 months cushion=
163
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
b. 2 years
164
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
b. 2 years
165
What is usually NOT required by a loan applicant?
a. Photo ID
b. Personal references
c. 2 months of bank or
brokerage statements
d. 30 days previous pay stub
b. Personnel references
166
Commission, bonus or dividend income is usually averaged over:
a. 1 years
b. 2 years
c. 3 years
d. 4 years
b. 2 years
167
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
c. 3 years
168
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
c. 3 years
169
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%
c. 5%
170
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
d. Automobile lease payments
| are always included
171
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
d. 10 months
172
Fannie Mae total Total Obligation Ratio is:
a. 10%
b. 26%
c. 36%
d. 46%
c. 36%
173
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
b. 10 months
174
A lock-in agreement does NOT include:
a. Interest rate
b. Expiration date
c. Lock-in-fee
d. APR
d. APR
175
Which IRS form does a lender use to verify a applicants income?
a. 2071
b. 321-ml
c. 911-r
d. 4506-T
d. 4506-T
176
Fannie Mae requires how many years of credit and public records review?
a. 1 year
b. 3 years
c. 5 years
d. 7 years
d. 7 years
177
Bankruptcy can be kept on the credit report for a maximum of:
a. 3 years
b. 5 years
c. 7 years
d. 10 years
d. 10 years
178
Credit reports for new construction cannot be older than:
a. 30 days
b. 90 days
c. 120 days
d. 180 days
c. 120 days
179
FICO stands for:
```
a. Federal Interest
Corporation
b. Fair Isaac Corporation
c. Freddie,insurance
Company
d. Fannie's International Credit
organization
```
b. Fair Isaac Corporation
180
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
b. The lower score
181
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
c. The middle score
182
The maximum age limit for a borrower is:
a. 65
b. 75
c. 85
d. There is no maximum age
limit
There is no maximum age limit
183
A guarantor or co-signer signs the:
a. Mortgage
b. Note
c. Deed
d. Mortgage and the note
b. Note
184
Which of the following is NOT a national credit repositories?
a. Experian
b. Fannie Mae
c. TransUnion
d. Equifax
b. Fannie Mae
185
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%
b. 25%
186
Which of the following is NOT an escrow impound?
a. Title insurance
b. Property insurance
c. Flood insurance
d. Hazard insurance
a. Title insurance
187
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
b. 2 months
188
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
c. Mortgage and the Note
189
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. Mortgage
190
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. No limit
191
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
```
c. Fannie Mae 1008 -
| Transmittal Summary
192
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
```
b, Fannie Mae 1005 -
| Verification of Employment
193
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. Fannie Mae 1006 -
| Verification of Deposit
194
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
d. Consumer signature
195
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)
b. Desktop Underwriter (DU)
196
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. Loan Prospector
197
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
```
b. The Lender
198
The automated underwriting system can NOT be used for what types of loans?
a. FHA
b. VA
c. Conventional
d. Jumbo
d. Jumbo loans
199
Who does Fannie Mae hold responsible for the quality of the appraisal?
a. Appraiser
b. Real estate agent
c. Lender
d. Title company
c. The lender
200
An appraisal must be re-certified if it is older than:
a. 1 month
b. 4 months
c. 6 months
d. 12 months
b. 4 months
201
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
b. Market value
202
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
d. Based on possible future
| zoning changes
203
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. Sales Comparison Approach
204
The appraisal approach that best applies to vacant land?
```
a. Sales Comparison
Approach
b. Cost Approach
c. Residential Approach
d. Income Capitalization
Approach
```
a. Sales Comparison Approach
205
The appraisal approach that best applies to a school?
```
a. Sales Comparison
Approach
b. Cost Approach
c. Residential Approach
d. Income Capitalization
Approach
```
b. Cost Approach
206
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
b. 3
207
What is the most important type of comparable used in the Sales Comparison Approach?
a. Active
b. Pending
c. Closed
d. Expired
c. Closed
208
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. GRM
209
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%
c. 120%
210
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 commitment letter
211
Who handles complaints regarding mortgage loan rejections?
a. FCC
b. FHA
c. VA
d. CFPB
d. CFPB
212
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
```
b. It is based on loan amount
213
Surveys are NOT certified to:
a. Lenders
b. Title insurers
c. Buyers
d. Real estate broker
d. Real Estate Broker
214
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
b. Easement
215
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. Deed restriction
216
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
b. Lot and Block
217
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
b. Flood certification fee
218
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. HUD-1/Closing Disclosure
219
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
b. July 01
220
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
c. Metes and bounds
221
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
d. Wire transfer
222
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
c. Warehouse funding
223
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
b. 4%
224
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. Assignment of mortgage
225
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
```
c. Selling a loan with servicing
| retained
226
Ginnie Mae does:
a. Buy loans
b. Sell loans
c. Fund loans
d. Guarantee loans
d. Guarantee loans
227
Fannie Mae was established in:
a. 1914
b. 1938
c. 1962
d. 1980
b. 1938
228
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
```
b. Orchard
229
Which title insurance policy is transferable?
a. Mortgagor
b. Mortgagee
c. Restricted use
d. Conforming
b. Mortgagee
230
The title company considers unpaid property taxes to be an:
a. Encroachment
b. Encumbrance
c. Easement
d. Engress
b. Encumbrance
231
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
c. Principle of Highest and Best Use
232
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
c. Metes and Bounds
233
A neighbors fence that crosses over on to another property is an example of an:
a. Encroachment
b. Encumbrance
c. Exculpation
d. Egress
a. Encroachment
234
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. Title defect
235
The national trade association and voice of the abstract and title insurance industry is:
a. TICOA
b. ATC
c. ALTA
d. TITLE NOW
c. ALTA
236
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
```
b. Race, color, religion, sex,
handicap, familial status,
national origin
237
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
c. Thank you
238
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
d. Another real estate
| brokerage firm
239
Who can provide closed sales comparables to an appraiser?
a. Real estate agent
b. Underwriter
c. Mortgage broker
d. Lender
a. Real estate agent
240
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. Rehabilitation
241
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
b. Air loan
242
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. Fraud for profit and fraud for
| housing
243
A lender's refusal to lend in a particular neighborhood is known as:
a. Referential lending
b. Redemption
c. Railroading
d. Redlining
d. Redlining
244
A fee charged for the use of money is:
a. Interest
b. Usury
c. Rent
d. Lease
a. Interest
245
A mortgage on personal property is a(an);
a. Chattel mortgage
b. Reverse mortgage
c. Ad valorem mortgage
d. Participation mortgage
a. Chattel mortgage
246
One discount point equals 1% of the:
a. Purchase price
b. Annual percentage rate
c. Loan amount
d. Appraisal value
c. Loan amount
247
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
c. Assets minus liabilities
248
The liquidation of a debt by regular, usually monthly installments of principal and interest is:
a. Amortization
b. Hypothecation
c. Assignment
d. Novation
a. Amortization
249
The withdrawal of funds out of savings accounts and into stocks and bonds is known as:
a. Intermediation
b. Disintermediation
c. Acceleration
d. Exculpation
b. Disintermediation
250
The condemnation of private property for public good is:
a. Eminent Domain
b. Escheat
c. Disintermediation
d. Interstate
a. Eminent Domain
251
Notice which is not recorded is known as:
a. Construction notice
b. Actual notice
c. Selective notice
d. Lis pendens notice
b. Actual notice
252
Notice which is recorded is known as:
a. Constructive notice
b. Actual notice
c. Selective notice
d. Lis pendens notice
a. Constructive notice
253
The use of borrowed funds to increase yield is:
a. Leverage
b. Acceleration
c. Defeasance
d. forbearance
a. Leverage
254
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. Note endorsed with recourse
255
APOR stands for:
a. Average Price of Ratios
b. Annual Percentage of
Refinancing
c. Average Prime Offer Rate
d. Annual Percentage
Reimbursement
c. Average Prime Offer Rate
256
A discount point costs?
a. $100
b. $1,000
c. 1 percent of loan amount
d. 10 percent of loan amount
1% of loan amount
257
ECOA defines elderly as:
a. 55 years old
b. 62 years old
c. 65 years old
d. 70 years old
b. 62 years old
258
The right to use land owned by another is an:
a. Easement
b. Acquisition
c. Exposition
d. Alienation
a. Easement
259
The act of lowering the priority of a mortgage lien is:
a. Reduction
b. Subordination
c. Degradation
d. Subtraction
b. Subordination
260
A loan offered to a consumer with poor credit is know as:
a. Subjugation
b. Alternative
c. Preliminary
d. Subprime
a. Subprime
