WB Chapter 1 Flashcards
What is a mortgage?
A mortgage is a written instrument using real property to secure repayment of a debt. It is a financial document that essentially binds the real property and its value as collateral to insure the repayment of the loan by the borrower.
If the borrower does not repay the debt, then that real property and its value would be used for the repayment of that debt. It is considered a voluntary lien.
The creation of the Federal National Mortgage Association (FNMA or Fannie Mae) in 1938
increased the
liquidity in the market and allowed for more money to become available for
lenders.
Fannie Mae and Freddie Mac are
considered government-sponsored entities
** Created the Consumer Financial Protection Bureau (CFPB)?
The Dodd-Frank Wall Street Reform Act
Name two things that define an MLO:
A mortgage loan originator or MLO is:
An individual who for compensation or gain or in the expectation of compensation or gain;
Takes a residential mortgage loan application; or
Offers or negotiates terms of a residential mortgage loan.
What is the difference between an MILO and a registered MILO?
A registered MLO works for a depository institution and is not licensed.
The unique identifier is
is a number that will identify which MLO is originating a loan by appearing on the residential loan application.
Name three examples of “clerical or support duties.”
Communicating with a consumer to obtain the information necessary for the processing or underwriting of a loan
Receiving the appraisal
Collecting a VOE
An independent contractor is
is basically a loan processor or underwriter who is not under the direct supervision of a licensee.
To be licensed as an MILO an individual must
be sponsored.
Name the two levels of regulatory authority that MLOs are subject to:
State regulatory authority
Federal regulatory authority
Mortgage backed securities
are
are a type of asset-backed security that is secured by a mortgage or collection of mortgages
The SAFE Act is the
the key federal law that regulates the licensing process and responsibilities of mortgage loan originators.
List out the steps of obtaining a license:
Complete the Application
Complete PE and Testing Requirements
Pay the fees
What two things must an applicant give permission for at the time of application?
Criminal Background Check & Credit Report
How many hours of pre-licensing education are required for an MLO?
20 hours
Alexa is looking to become a licensed MILO, she is unsure about what she needs to know about the National Test. Tell Alexa three things that are important to remember about taking and passing the National Test.
75% is the minimum passing score
She can take the test 3 consecutive times, 30 days apart
If she becomes unlicensed for or more years, she has to retake the test.
Give two examples of things that would show financial irresponsibility.
Foreclosures in the past 3 years
Open tax liens
What are the three things that are required for renewal?
Continuing Education
Paying the Fees
Maintaining the minimum requirements for initial licensure
