Uniform State Content

Question 1

Which law requires notification to a borrower before the servicing of a loan is transferred to someone else?
1.) ECOA
2.) HOEPA
3.) TILA
4.) RESPA

Answer 1

4.) RESPA
Section 6 of RESPA requires a Servicing Transfer Statement to be sent to the consumer 15 days prior to the loan servicer selling or assigning the servicing rights of the loan to another servicer.

Question 2

What type of scam entails homeowners who are encouraged to refinance their property over and over until little or no equity remains?
1.) equity skimming
2.) property skimming
3.) extreme lending
4.) reverse equity

Answer 2

1.) equity skimming
Example of the predatory tactic of equity skimming

Question 3

The familial status clause of the Fair Housing Act labels all of the following as protected classes except,
1.) Prego women
2.) Grandparents raising grand children
3.) Family with single parent and children
4.) Married couple

Answer 3

4.) Married couple
Familial status refers to households that include individuals under the age of 18 who either live with parents or legal custodians. This protection also extends to pregnant women or any person in the process of obtaining legal custody of a child under the age of 18

Question 4

T/F: Borrowers must receive a written notice of the high-cost loan

Answer 4

TRUE
Borrowers must be given a written notice that a loan is a high-cost loan, and they must acknowledge the receipt in writing. Creditors who refinance a loan they already hold cannot charge more points and fees. Creditors of high-cost loan are prohibited from increasing the interest rate if a borrower defaults.

Question 5

What are triggering terms in advertising requiring additional disclosing?

Answer 5

Number of payments
Down payment
Monthly payment

Question 6

Which form is used most frequently for residential appraisals?

Answer 6

URAR
The Uniform Residential Appraisal Report

Question 7

Which class is specifically protected by the Fair Housing Act but is not protected by the Equal Credit Opportunity Act?
1.) Marital Status
2.) Disability
3.) Sex
4.) Religion

Answer 7

2.) Disability
Persons with disabilities are not specifically named in the Equal Credit Opportunity Act.

Question 8

T/F: An A-loan is riskier than a subprime loan, but less risky than a prime loan.

Answer 8

FALSE
An A-loan is riskier than a prime loan, but less risky than a subprime loan.

Question 9

Which shows the Real Estate commission amount?

Answer 9

The Closing Disclosure

Question 10

A loan originator is an individual who…
1.) for compensation or gain, takes residential mortgage loan applications; or offers or negotiates terms of residential mortgage loans
2.) directly services or offers to service residential mortgage loans.
3.) performs clerical or support duties as an employee of a licensed mortgage lender, broker or servicer.
4.) directly or indirectly negotiates, places, or brokers loans made by a finance lender.

Answer 10

The textbook definition of a loan originator is one who takes residential mortgage loan applications or offers/negotiates terms of residential mortgage loans.

A person who negotiates, places, or brokers loans for a finance lender is a mortgage broker; a person who directly originates, acquires, or negotiates first mortgage loans in the primary market is considered a mortgage banker and/or mortgage lender; a person who directly services or offers to service mortgage loans is a mortgage servicer; and a person who performs clerical or support duties is a mortgage processor or underwriter.”

Question 11

A licensed mortgage loan originator cannot…

Answer 11

be employed by more than one mortgage broker or lender at the same time

Question 12

When a mortgage broker accepts any third party fee from a borrower, the funds must immediately be placed in a/an…

Answer 12

Escrow account

Question 13

For license renewal, a mortgage loan originator is required to complete a minimum of ____ hours of continuing education on the topic of federal law.
A.) 8
B.) 5
C.) 3

Answer 13

C.) 3
Of the 8 hours of continuing education a licensee is required to complete for annual license renewal, 3 hours must be on the topic of federal law.

Question 14

A mortgage broker rents office space from a title company at a discount in exchange for referring customers for settlement services. Which law does this arrangement violate?
1.) RESPA
2.) TILA
3.) ECOA

Answer 14

1.) RESPA
Section 8 of RESPA prohibits kickbacks, or a thing of value, such as the one described in this scenario.

Question 15

Which type of loan is never considered to be a high cost loan?
1.) Refinance
2.) Reverse mortgage

Answer 15

2.) Reverse Mortgage
Rules and regulations for high cost loans never apply to reverse mortgage loans.

Question 16

A loan originator license would not necessarily be denied if the applicant
1.) pled guilty to money laundering in Canada 10 years ago.
2.) was convicted on a felony charge of assault 10 years ago.
3.) pled no contest in a fraud case 3 years ago.
4.) has had a mortgage loan origination registration revoked by another state.

Answer 16

2.) was convicted on a felony charge of assault 10 years ago.

A felony conviction would not necessarily be the basis for denying a license, unless the felony involved fraud, dishonesty, breach of trust, or money laundering.

Question 17

TILA requires the use of the Closing Disclosure for…

Answer 17

one-to-four family residences