Scenarios Flashcards by Kim L

John and Jane Brown are co-owners of a property that is their principal residence, and are entering into a refinance transaction that is subject to rescission. John is provided with one copy of the Notice of Right to Cancel, and Jane receives none. What is their deadline for rescission?
A. Midnight on the third day following closing
B. Three business days after closing
C. five years after closing
D. Three years after closing

D. Three years after closing

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Permissible acts after discovering deposits inconsistent with borrower’s income included on application

Three weeks into the processing of the loan, the loan originator uncovers that a borrower has under reported her current debt obligations what should the MLO do?

(a) Explain the TILA RESPA Integrated Disclosures Rule
(b) Report Abusive Acts or Practices Rule
(c) Proceed but make sure they sign Safeguard Rule
(d) Refuse to process based on Ability to Pay Rule

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A mortgage loan officer may refuse to accept a loan application from a prospective borrower for which of the following reasons?

(a) The applicant has used several racial insults and you would rather not do business with him
(b) The borrower has indicated that she is willing to provide false documents in order to qualify for a larger loan
(c) The lender doesn’t accept applications from the area where the borrower lives
(d) The applicant has poor credit and you don’t feel there is any way he will meet lender guidelines

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An applicant has applied for a refinance mortgage with a lender who requires payment of PMI on first liens with loan-to values over 80%. The applicant has an existing HELOC mortgage with a balance of $67,200 and wishes to keep it as a second lien mortgage. The property is valued at $320,000. The borrower has applied for a fixed rate mortgage of $252,800 for 15 years at 6.5%. Which of the following statements is correct?

(a) The LTV is 100%
(b) The lender will require mortgage insurance
(c) The lender will not require mortgage insurance
(d) The LTV is 90%.

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An attorney and a residential mortgage loan originator (RMLO) enter into an agreement in which the attorney’s country club membership dues are paid by the RMLO each month in return for the referral of prospective loan applicants. Who is in violation of RESPA Section 8?

(a) The RMLO
(b) The Attorney
(c) Both the RMLO & the Attorney
(d) Neither the RMLO nor the Attorney

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A mortgage loan originator advertises to a real estate office that after “three closings using
their mortgage company” the mortgage broker will give back a referral fee to the real estate
brokerage. This referral fee is on a sliding scale based on the number of loans processed throughthat firm. According to the Real Estate Settlement Procedures Act who has violated the
prohibition regarding kickbacks?
(a) The Realtor
(b) The Mortgage Loan Originator
(c) Both the Realtor and the Mortgage Broker
(d) Either the Realtor or the Mortgage Broker

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MaxMortgage is a lender that is hoping to revive the subprime lending market with the origination of high-cost mortgages. To ensure that it has an ongoing source of funding, MaxMortgage plans to sell its loans in the secondary market. After consulting with its attorney, MaxMortgage learns that:

a. The Dodd-Frank Act has made it illegal to sell high-cost mortgages in the secondary market
b. MaxMortgage may only sell high-cost mortgages if it agrees that the purchaser will not be liable for HOEPA violations
c. Before selling high-cost mortgages, MaxMortgage must provide purchasers with a notice that the loans are subject to HOEPA
d. MaxMortgage cannot originate high-cost mortgages unless its loan originators provide borrowers with pre-loan counseling

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Joan Johnson is a salesperson who is paid 100% commission. What type of documentation would you ask her to provide as proof of her income for loan qualification?

a. W-2s for the past two years and a copy of her last pay stub
b. Tax returns for the past two years
c. Her tax return from last year
d. A detailed verification form from her employer

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Safina Marigold, a mortgage loan originator, has received a request for an offer of residential mortgage loan terms together with information about the prospective borrower that will be necessary for her to make a decision on whether or not to offer a loan. Safina has received
a(n):
a. Application
b. Credit report
c. Appraisal
d. Solicitation

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If an MLO starts an application and then leaves employment and the lender reassigns the loan to a different
MLO. What should the new MLO do?
a.) verify the information is correct by telephone
b.) verify the information via email
c.) start a new application
d.) continue with the old application

c.) start a new application

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Cindy is a loan originator who specializes in refinances. A local appraiser calls her and promises to deliver any appraisal that she needs for her refinances, telling Cindy, “All you have to do is let me know the valuations that you need!” What are Cindy’s obligations under the appraisal rules?

a. She has no particular obligations
b. Her company must order a new appraisal for any valuation performed by that appraiser
c. She must report the actions of the appraiser to the state appraiser and licensing authorities and submit a request for a new appraisal
d. She must call the appraiser and ask that he refer the assignment to another appraiser who does not have a conflict of interest

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A title insurance company provides a computer to a mortgage broker. The computer is used to transmit electronic documents from the mortgage broker’s office to the title insurance company. Who is in violation of RESPA?

a. The title insurance company
b. The mortgage broker
c. Both the title insurance company and the mortgage broker
d. Neither the title insurance company nor the mortgage broker

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It is unethical and illegal to use yield spread premiums for any reason other than:

a. To earn an additional commission on a loan origination
b. To enable a creditor to earn more on a mortgage transaction
c. To help a borrower pay for settlement costs
d. To enable a loan originator to meet a monthly sales quota

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A hazard insurance company hosts a dinner for the employees of a mortgage broker. The designated broker encourages the employees to send clients to the insurance company. Who has violated RESPA?

a. The hazard insurance company
b. The mortgage broker
c. Both the hazard insurance company and the mortgage broker
d. Neither the hazard insurance company nor the mortgage broker

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A real estate company accepted flyers from a mortgage company and made them available to prospective buyers during an open house. Who has violated RESPA?

a. The real estate company
b. The mortgage company
c. Both the real estate company and the mortgage company
d. Neither the real estate company nor the mortgage company

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A mortgage broker enters into a rental agreement with a real estate agent where the rent for the office space is at the prevailing market price. Who has violated RESPA?

a. The mortgage broker
b. The real estate agent
c. Both the mortgage broker and the real estate agent
d. Neither the mortgage broker nor the real estate agent

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A title company advertises in a real estate company’s publication by paying the required fees. Who is in violation of RESPA?

a. The real estate company
b. The title company
c. Both the real estate company and the title company
d. Neither the real estate company nor the title company

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The state in which Jim Jungle works requires a mortgage loan originator be covered by a surety bond. The bond must be maintained in an amount that reflects:

a. The number of loans originated by Jim annually
b. The number of loans Jim’s employer originates annually
c. The dollar value of loans Jim originates annually
d. Jim’s experience as a loan originator

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Van Gordon, who is an IT tech, has decided to sell his house. He is offering to carry the contract himself and does all the negotiating necessary to reach agreement on the mortgage terms. Must Van be licensed?
a. Van need not be licensed unless he negotiates more than one loan during any 12-month period
b. Yes, individuals who offer or negotiate the terms of a residential mortgage loan must be licensed
c. Van is exempt from the requirement to be licensed as the property on which he was negotiating the terms of the mortgage loan had served as his own residence
d. Van must be licensed because he will receive compensation as a result of the
transaction

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Mortgage loan originator Juanita has placed an advertisement in the local paper that states the
loan has “payments of less than $1,000.” Under the Truth-in-Lending Act, this statement is:
a. A permissible general statement
b. A trigger term
c. Permissible if the loan is identified as a sample loan product
d. Permissible because it is illustrative only

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Conrad, a mortgage license originator, has resigned his position with Levenfeld Lenders, his sponsoring employer, to accept a new position as a mortgage loan originator with Joe Franklin, a licensed lender, who is the owner of Franklin Mortgage Company. Which person is required to notify the state regulatory authority through the NMLS system of Conrad’s termination of employment with Levenfeld Lenders?

A. Levenfield, the sponsoring entity must notify the state regulatory authority of the termination
B. Joe Franklin, the new employer must notify the state regulatory authority of the termination
C. Conrad, the mtg loan originator must notify the state regulatory authority of there termination
D. BOTH the mortgage loan originator and the sponsoring entity must notify the state regulatory authority of the termination

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Oskar is being licensed in a state that requires each loan originator to be covered by a surety
bond. Upon approval of his license application, he will be employed by the Half Nelson
Mortgage Brokerage. Who is required to provide Oskar’s surety bond?
a. Oskar
b. Half Nelson Mortgage Brokerage
c. Both Oskar and Half Nelson
d. Either Oskar or Half Nelson

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When Michael wanted to purchase a home in 2006, his mortgage broker told him that his income was insufficient to qualify for the mortgage. When Michael insisted on trying to purchase the home, his mortgage broker suggested that he complete an application for a stated-income loan, and told him the minimum income level that he needed to include on the application in order to qualify for a mortgage. Michael completed the loan application, adding $20,000 to the minimum amount that his broker suggested. The broker reviewed the application and Michael signed it. Which of the following statements most accurately describes the liability that can arise from this scenario?

a. The mortgage broker is solely liable, because he encouraged Michael to misrepresent his income
b. Michael and the mortgage broker are liable for submitting a loan application that contains false information
c. Neither Michel nor the mortgage broker is liable, since it was common practice in 2006 to exaggerate a loan applicant’s income level
d. Michael is solely responsible for misrepresentation, since he inflated his income more than was necessary to secure the loan

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Germaine Hopper has not maintained a state loan originator license for over five years. However, during the last three years of that five-year period, she was employed as a registered loan originator with the Anywhere Bank. Is Germaine required to retake the licensing test when she decides to apply for a new state license?

a. Yes, she must retake the test because she had not maintained a license for over five years
b. No, once passed, an applicant does not have to take the test again
c. Yes, test results are only valid in the year they are taken
d. No, her time as a registered loan originator is not counted as part of the time her license has not been maintained

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The client's appraisal came in lower than expected, requiring the borrower to bring an extra $10,000 to closing. The borrower advises the MLO that he only has $8000 available What should the MLO advise the client to do? A) Ask a relative for the rest B) Ask the borrower if they have any undeclared assets C) Loan the borrower $2,000 and have them repay after closing D) Tell the borrower to take a cash advance on one of the credit cards being paid off

You overhear another residential mortgage loan originator (RMLO) in your office making negative (and possibly untrue) comments about another mortgage company to a potential customer. What do you do? Ignore the comment? Confront the RMLO? A. Talk to your office manager? B. Report this matter to the NAMB ethics committee? C. Report this matter to the NMLS D. This is not unethical.

Sam Slezee was found to be providing mortgage loan origination services without a state license. A temporary order to cease and desist engaging in such activities was issued against Sam. While under the order, Sam completed three transactions. What is the maximum fine a state licensing agency may impose on him? a. $25,000 b. $50,000 c. $75,000 d. $100,000

You recommend a specific loan to a past customer who then asks you to check out a mortgage product they recently heard was better suited for them. You are too busy to do the research; however you tell the customer that you did the research and the mortgage product in question is not suitable for the customer. Have you actedethically? A. Illegally B. Unethical C. Illegally and Unethical D. Legal and ethical

You receive a verbal loan approval from one of your lenders. When you get the conditions in writing, it seems the underwriter failed to list a condition that is essential to the salability of the loan. What would you do? A. Bring it to the attention of the underwriter B. Tell your boss C. Ask the borrower to notify the lender D. Call the lender directly

The loan officer suspects the social security number in an FHA application is incorrect, what must he/she do? A. Contact the Social Security administration to verify it. B. Proceed with the loan, because FHA will verify the social security number. C. Proceed with the loan and HUD will verify it. D. Give the borrower five days to bring in the verification.

Answer D Contact the Social Security administration to verify it.

What is not likely to happen if the lender/investor finds fraud? A. A 1% interest rate increase on the loan B. The lender and/or broker will be required to repurchase the loan C. The entire loan can be called due and payable D. The loan officer must pay back any premium made on the loan

A. A 1% interest rate increase on the loan

A borrower wants to purchase a 2nd home and tells you that they intend to rent the property out when they are not living in it. You have reviewed their financial information and realize that the borrower would qualify for financing if the property is classified as a 2nd residence. However, if the property is classified as an investment property, the borrower is unlikely to qualify. What should you do? A. Classify the property as a rental property even though the borrower intends to reside there part of the year. B. Classify the property as a 2nd residence; since the borrower intends to use the property for part of the year, this is acceptable. C. Classify the property as a 2nd residence because it is not legal for the borrower to personally reside in a property classified as a rental for any length of time. D. Deny the borrower because it is neither legal to rent out a 2nd residence or reside in a rental property for any length of time.

A. Classify the property as a rental property even though the borrower intends to reside there part of the year.

A potential client is shopping around for a competitive rate and a 15-day lead time to close. The brokerage you work for offers highly competitive rates, has an average lead to close time of 30 days, and a fast lead to close time of 21 days. Understanding these figures, you tell the client you can meet their demands and secure their business. This action is: - legal but unethical. - illegal but ethical. - illegal and unethical. - legal and ethical.

legal but unethical.

You are working on a file referred to you by a realtor. The realtor calls you to see if there is going to be any problem getting the customer qualified. The realtor wants to know what the borrower's credit scores are before presenting the offer. The most appropriate course of action is to: - refer the realtor to the borrower. - never disclose a borrower's information to a realtor. - obtain permission from the borrower to disclose the information. - tell the realtor the credit score.

-refer the realtor to the borrower.

You are working with a customer who has disclosed they have new payment obligations that do not appear on their credit report. You realize that your customer qualifies for a loan based on figures calculated using only payment obligations reported on their credit. In order to ensure your client qualifies, you decide to exclude the payment obligations that do not appear on the credit report. This action is: - Illegal but ethical - legal but unethical. - legal and ethical. - illegal and unethical. - illegal but ethical.

illegal and unethical.

You have a customer who has been approved by the lender and is ready to close. The customer backs out at the last minute because of a recent interest rate drop and opts to go with a different loan officer. You paid for the appraisal and want to invoice the customer and be reimbursed. This course of action would be considered: - Legal and ethical - Illegal and unethical - Legal but unethical - Illegal but ethical

Legal and ethical

You have been working with a client for the past six months who has finally been approved by the lender and is ready to close. Two days before closing, interest rates drop and you explain to your customer that you are unable to go with a different lender at the better rate because of the standing commitment to the current lender. You also inform your client that breaking a rate with a lender is very damaging to the broker-lender relationship. After explaining the situation, your client still chooses to back out of the loan and go with a different loan officer. Your client's action in this situation is: - illegal but ethical. - illegal and unethical. - legal but unethical. - legal and ethical.

Legal but unethical

You have completed the necessary Pre-licensure education, testing, and application requirements to obtain your mortgage license. You have been hired by a brokerage and expect your background check to clear shortly. You have a friend who is eager to proceed with a loan application and your manager at the brokerage has said that you can start the file under his/her name, then switch it back to your name once your license arrives. This action is: - legal and ethical. - illegal but ethical. - illegal and unethical. - legal but unethical.

illegal and unethical.

On a Federal Residential Loan Application: You initially disclose a rate of 5% to the customer but are floating the rate. Over the next few days, rates improve and you have the option to lock the customer in at a rate of 4.75% and earn the same compensation. This behavior would be considered: - illegal and unethical. - legal and ethical. - illegal but ethical. - legal but unethical.

legal and ethical.

You interview a customer and collect all the information needed to fill out the 1003 and run credit. Before running credit, you specifically ask the client if it is okay to run their credit, and they consent. You should now: - have the customer sign a Borrower's Authorization form and then pull credit. - hang up the phone and run their credit. - ask the borrower to repeat their verbal consent, record it, and then pull credit. - feel confident a Borrower's Signature

Authorization is not required as the consent has already been given. have the customer sign a Borrower's Authorization form and then pull credit.

You just closed a loan with a customer and would like to take them out to dinner to celebrate their new home purchase. Midway through the meal, you realize paying for your clients' meals may be considered a violation of RESPA. You should: - ask your clients to pay for your meal. - proceed; it is ok to for you to pay for their meals. - ask your clients to pay for their meals. - pay only if their meal is under $25 which is allowed.

proceed; it is ok to for you to pay for their meals.

You pull credit on a husband and wife. It turns out their debt-to-income ratio is too high. You notice the majority of the debts belong to the husband. You also note that the wife has enough income to qualify on her own. You remove the husband from the loan, submit the file, and receive approval. This action is: - legal but unethical (except for communal property sales). - illegal but ethical (except for communal property sales). - illegal and unethical (except for communal property sales). -legal and ethical (except for communal property sales).

legal and ethical (except for communal property sales).

Your borrower has a joint-asset account with another person. Most of the money in the account belongs to the non-borrower. The lender requires two months of bank statements. Under this circumstance, the documentation needed by the lender requires you to: - obtain a VOD with only the borrower's name on it. - remove the non-borrower's information since it is not applicable. - disclose and document deposits for the borrower and non-borrower. - temporarily transfer all the money into a separate account with only the borrower's name on it.

disclose and document deposits for the borrower and non-borrower.

Your customer calls you in the morning and tells you to lock the interest rate at the 5.5% you initially disclosed. You commit to lock the rate, but your day becomes busy and you aren't able to lock it until later in the day. When you go to lock the rate, you notice that the pricing has changed since this morning and the rate of 5.5% is now going to cost an additional $500.00. What is the most appropriate course of action? - Call the customer before locking the rate and tell them about the $500 cost - Pay the $500 cost and lock the rate - Float the rate until rates improve - Lock the rate and charge a $500 administration fee at closing

Pay the $500 cost and lock the rate

If fraud is discovered by the servicer, what is LEAST likely to occur? - The borrower will experience a rate increase - A buyback by the originating lender - Calling the note due - The originating lender returns any premium fees

The borrower will experience a rate increase

When fraud on the part of the borrower is found in a loan file, which of the following is likely to occur? - The borrower will not be affected until default - The mortgage broker may be forced to buy back the loan -The loan officer will go to jail - Nothing - it's built into the rates

The mortgage broker may be forced to buy back the loan

The loan officer suspects the social security number in an FHA application is incorrect, what must he/she do? - Contact the Social Security administration to verify it. - Proceed with the loan, because FHA will verify the social security number. - Proceed with the loan and HUD will verify it. - Give the borrower five days to bring in the verification.

Contact the Social Security administration to verify it.

On an FHA loan, which form of a gift is NOT allowed? - The seller gifts the down payment - Gift from a grandmother - Gift from an aunt and uncle - An employer gift which does not have to be repaid

The seller gifts the down payment

What is a mortgage or trust deed? - The document that passes title from the borrower to the lender on the property being collateralized - The instrument that makes the lender a partial owner of the collateralized property - The document that creates a lien against the property - It is the contract that establishes the conditions for the loan and the repayment of money

The document that creates a lien against the property

SRP stands for: - Standard Rate Product. - Servicing Release Pricing. - Service Release Premium. - Standard Rate Premium.

Service Release Premium.

When a loan is immediately being sold onto the secondary market, the responsibility of "funding" belongs to the: - borrower. - secondary lender. - primary lender. - seller.

primary lender.

An interest rate at PAR would be? - The interest rate before any fees - An interest rate with no YSP or SRP - The rate charged by banks to their best customers - The rate quoted in radio advertising to induce clients to call, but which will require discount points

An interest rate with no YSP or SRP

The cost approach of an appraisal is used for all of the following EXCEPT: - To determine the cost of income, on a rental property - insurance. - new construction. - remodel. - to determine the cost of income, on a rental property.

To determine the cost of income, on a rental property

Which of the following is NOT true concerning SRP? - The Lender that services the loan does not receive the SRP. - Brokers do not get the SRP. - Brokers may receive an SRP. - Lenders get the SRP when the loan is sold.

Brokers may receive an SRP.

Which of the following best defines yield spread premium? - The amount of premium given by the lender when the interest rate closed is at par - The amount of premium given by the lender when the interest rate closed is floating - The amount of premium given by the lender when the interest rate closed is below par - The amount of premium given by the lender when the interest rate closed is above par

The amount of premium given by the lender when the interest rate closed is above par

In which situation would it be most likely that a lender will reject a property? - If the effective age is unduly old - If the condition is marked "fair" by the appraiser - If the market value exceeds the costs to rebuild - If the net adjustments on the comparable were 5%

If the condition is marked "fair" by the appraiser

What is the best way to explain APR to borrowers? - Yield spread premium or service release premium plus all closing costs - Yield spread premium or service release premium plus the interest rate - Mortgage insurance plus the interest rate including loan costs - Interest rate plus all closing costs and prepaids

Mortgage insurance plus the interest rate including loan costs

The lender discloses the prepayment penalty on which of the following documents? - The 1003 and the TILA - The Good Faith Estimate and the TILA Disclosure - ECOA and TILA disclosure - The trust deed and the trust deed note

The Good Faith Estimate and the TILA Disclosure

Under what circumstances would it be possible to consider capital gains as income for a Fannie Mae or Freddie Mac loan? - If the borrowers can get written verification from their mortgage loan servicer that the income will continue - If the borrowers can verify a minimum of two years income on their tax returns and still own the asset - If the borrowers can verify one year income on their tax returns and get a CPA letter - If the borrowers are using the asset/income as part of their down payment

If the borrowers can verify a minimum of two years income on their tax returns and still own the asset

If a borrower wants to do a Rate/Term refinance loan and is still in the process of paying off a Chapter 13 bankruptcy, in order to do this loan you will need to: - make sure the bankruptcy was filed at least 7 years ago. - send a letter to the lender requesting permission to proceed. - obtain signed approval from the customer's bankruptcy court judge. - do nothing; special processes are only required for Chapter 7 and Chapter 11 bankruptcies.

obtain signed approval from the customer's bankruptcy court judge.

When you order an Insurance binder on a borrower's loan file, the one-page sheet that summarizes all the insurance information is known as the: - binder summary page. - Declaration page. - 1008 - binder reference page.

Declaration page.

The lender is requiring repairs on the home to be completed. Those repairs can be done after the loan closes by including them in a(n): - Escrow Holdback. - Earnest Money Deposit. - Lender Retainer. - Repairs Completion Account (RCA).

Escrow Holdback

Your customer owns several rental properties, one-third of which have a Negative Net Lease. Therefore, you can conclude that: - two of the rentals are owned outright. - the rents are equal to or less than the mortgage amount due each month. - more rent is collected than your borrowers owe in payments each month. - one out of the three rental properties is vacant.

the rents are equal to or less than the mortgage amount due each month.

The mortgage loan you submitted to the Lender has been approved. However, there are some conditions that the Lender requires before the loan docs will be sent to the closing office. These conditions are referred to as: - Prior to doc - Prior to funding - Doc order - Re-draw

Prior to doc

How many years of residency history do you need to document on the 1003 for each borrower? - Only 1 year if they lived with parents - 1 year if they rented prior to the purchase - 2 years for both borrowers - 2 years for at least one of the two borrowers

2 years for both borrowers

A couple wants to buy a house together and both will be using their credit and income to qualify for the loan. However they are not married. How are they applying? - Jointly but on two separate loan applications - Not Jointly - Individually - Married applying jointly

Jointly but on two separate loan applications

In the Real Estate Owned section of the 1003, you need to include all of the following: - Current residence, rentals, lots, and any other real estate owned - Current residence only - Current residence and other personal property owned - Current residence, farm lands and building lots

Current residence, rentals, lots, and any other real estate owned

You have a borrower/salesperson that incurs expenses that are not reimbursed and are claimed on the tax returns. How is the income calculated? - Make no adjustment for the expenses, these are write-offs for tax purposes. - Subtract the expenses on Form 2106 from the gross income. - The borrower does not need to provide a copy of the tax returns to calculate income if s/he is a W-2 employee. - Use the gross monthly income figure your borrower discloses.

Subtract the expenses on Form 2106 from the gross income.

What form do you give to the borrower(s) to sign that authorizes the MLO to order a credit report? - Borrowers Signature Authorization - Affiliated Business Agreement - The Privacy Act Disclosure - Loan Credit Act Form

Borrowers Signature Authorization

You are doing a refinance loan for your borrowers non-owner occupied property. You look at the property profile and see that the site address and your customers' address are different. What action should you take? - No action required - Call the FBI and report them for fraud - Call your customer to find out why the addresses are different - Mark the property type as owner occupied

No action required

An MLO advertises a low interest rate for qualified applicants. A prospective borrower meeting the qualifications applies. The MLO moves the borrower into another loan which makes more profit to the lender. This is an example of: - Ponzi scheme - Bait and switch - Extortion - Loan flipping

Bait and switch

Surrender of an MLO license does not affect the MLO's: - ability to originate loans as an employee for a licensed lender. - civil or criminal liability for acts committed prior to the surrender. - ability to process loans as a contract processor. - ability of taking loan applications as an independent contractor.

civil or criminal liability for acts committed prior to the surrender.

When a lender learns that a property is in a flood zone, the lender must do which of the following? - Place flood insurance on the property at a cost to the borrower - Must immediately call the entire unpaid principle balance due and payable - Begin foreclosure in order to protect its financial interest - Notify the borrower of the flood insurance requirement and have the borrower purchase flood insurance

Place flood insurance on the property at a cost to the borrower

As the lender looks over the borrower's loan application and is deciding whether or not to make the loan, the lender may consider the: - economic health of the borrower. - psychological state of the borrower. - physical state of the borrower. - All of the Above.

economic health of the borrower.

An MLO leaves a borrower's file open on his/her desk for just a moment. An Identity thief sees the borrower's credit report which contains a huge amount of information. Fortunately the MLO quickly returns. What potential Federal laws is the MLO violating? - ECOA and RESPA - FACT Act and GLBA - HMDA and TILA - RESPA and MDIA

FACT Act and GLBA

George has a loan that is amortizing over 30 years, but he will be required to pay the remaining principal in 15 years. What is this called? - A balloon payment mortgage - An adjustable rate mortgage - An interest-only mortgage - A reverse mortgage

Balloon mortgage 360/180

Luke is a mortgage loan originator, and he is working with a new borrower. Luke needs to determine how much the home is worth versus the loan amount that the new borrower is requesting. What is Luke attempting to determine? - The borrower's debt-to-income ratio - The borrower's loan amount - The borrower's appraised value - The borrower's loan to value ratio

The borrower's loan to value ratio

Daniel is looking to qualify his borrower for a conventional loan. He is attempting to determine the borrower's back-end debt-to-income ratio. What is the maximum back-end DTI ratio that Daniel can use on a conventional loan? - 41% - 36% - 28% - 32%

36%

Rebecca just recently passed the bar exam and became a licensed attorney. She is looking to purchase a new home, and her mortgage loan originator suggested that they look into a loan that has lower payments at the beginning and the payments then increase during the life of the loan. What type of loan is this? - A bridge mortgage - A graduated payment mortgage - A reverse mortgage - An adjustable rate mortgage

A graduated payment mortgage

Trevor just received a promotion at work that is going to require him to move across the country. What type of loan might Trevor use to help him between selling his previous home and buying his new home? - A bridge mortgage - A graduated payment mortgage - A reverse mortgage - An adjustable rate mortgage

A bridge mortgage

Hank just received an appraisal fee from his borrower. What type of account should Hank put this appraisal fee until it is paid to the appraiser? - In an investment account - In an interest bearing savings account - In an escrow account - In the lenders general operating account

In an escrow account

Gregory's loan is $125,000. For it to be considered a qualified mortgage, the points and fees cannot exceed what amount? - $3,750 - $6,250 - $5,000 - $10,000

$3,750

Anna is looking to purchase a new home. She lives in a small town of under 20,000 people. What loan program would be a good option for her? - A VA loan - A USDA loan - An FHA loan - A conventional loan

A USDA loan

Which of the following borrowers would be a good fit for a reverse mortgage? - Janet, who is 50 years old and owns her house, outright - Howard who is 66 years old and just purchased his home 3 years ago - Margaret who is 63 years old and owes only $10,000 on her current mortgage - Saul who is 62 years old and owes $100,000 on his home

Margaret who is 63 years old and owes only $10,000 on her current mortgage