Terms and definitions

Question 1

The NMLS provides an outline of what is covered on the National Test. There are five sections to the outline that cover different topics:

Answer 1

1. Federal Mortgage-Related Laws2. General Mortgage Knowledge3. Mortgage Loan Origination Activities4. Ethics5. Uniform State Content

Question 2

The NMLS is a registration system that was developed and maintained by?

Answer 2

The Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR).

Question 3

What does the NMLS do?

Answer 3

The NMLS stores the information of each licensee. The NMLS also allows for the movement of information between the licensee and the states.

Question 4

FNMA: The Federal National Mortgage Association is also know by which name?

Answer 4

Fannie Mae

Question 5

FHLMC: The Federal Home Loan Mortgage Corporation is also know by which name?

Answer 5

Freddie Mac

Question 6

GNMA: The Government National Mortgage Association is also know by which name?

Answer 6

Ginnie Mae

Question 7

What does GSE stand for?

Answer 7

Government-sponsored entities

Question 8

What is the names of the 2 government sponsored entities or GSE’s?

Answer 8

Both Fannie Mae and Freddie Mac are GSE’s

Question 9

A _________________ is an entity that has the power to regulate the mortgage industry. They have the power to investigate, impose penalties, provide supervision, or a combination of all three.

Answer 9

Regulatory authority

Question 10

Each state has a state regulatory authority that is responsible for the ________ and ________ of the state laws regarding the mortgage industry.

Answer 10

supervision and enforcement

Question 11

The CFPB stands for?

Answer 11

The Consumer Financial Protection Bureau

Question 12

The ____________ is the Federal Government’s primary enforcer and supervisor of the mortgage industry.

Answer 12

Consumer Financial Protection Bureau

Question 13

The CFPB is a relatively new entity created by the ________ and ________ of ______

Answer 13

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Question 14

The Dodd-Frank Act created the _______ in order to increase the oversight and regulatory burden of the mortgage industry and, since their creation, they have passed various laws to meet those goals.

Answer 14

CFPB

Question 15

The _________ is the fundamental federal law that regulates the licensing process and responsibilities of mortgage loan originators.

Answer 15

(SAFE Act) Secure and Fair Enforcement Act for Mortgage Licensing Act of 2008

Question 16

What does the VA IRRRL stand for?

Answer 16

VA Interest Rate Reduction Refinance Loan: is similar to the FHA streamline but is offered as a VA to VA no-cash out refinance loan.

Question 17

What does NINA stand for?

Answer 17

No Income/No Asset Mortgages: Often referred to as “No Doc” mortgages. The borrower is not required to provide any financial information regarding their income or their assets.

Question 18

SISA stand for?

Answer 18

State Income/Stated Asset: Only require the borrower to state their income and asset situation but do not require the verification of the income or asset information.

Question 19

What does SIFA or SIVA stand for?

Answer 19

Stated Income/Full Asset or Stated Income/Verified Asset: Only require the borrower to state their income but they need to provide asset information.

Question 20

What does ATR stand for?

Answer 20

Ability to Repay Rule (ATR)

Question 21

The Qualified Mortgage (QM) is a section of ______ that went into effect in 2014.

Answer 21

TILA

Question 22

There are four types of qualified mortgages:1. General QM2. Temporary QM3. _________4. Balloon-Payment QM

Answer 22

Small Lender

Question 23

High-Cost Home Loans is under?

Answer 23

HOEPA Section 32 of TILA

Question 24

The Homeownership and Equity Protection Act stands for?

Answer 24

HOEPA

Question 25

__________’s purpose is to protect consumers from predatory lending practices associated with high-cost home loans.

Answer 25

HOEPA is known as Section 32 of Regulation Z (TILA).

Question 26

There are three separate HOEPA coverage tests based on:1. ________________________2. The amount of points and fees paid in connection with the transaction3. The prepayment penalties that are charged under the loan or credit agreement

Answer 26

The transaction’s APR (Annual Percentage Rate)

Question 27

Lenders are required to disclose to consumers at least ________ business days before consummation. (This is known as a “cooling off” period)

Answer 27

three