Term
(ECOA) A creditor may ask about an applicant's marital status.
A) True, as long as the information is used to determine whether credit is extended.
B) False, asking such a question is considered discrimination.
C) True, as long as the information is not used to determine whether credit is extended.
D) False, this information does not matter and creditors should not ask. |
|
Definition
|
|
Term
A creditor must notify an applicant of its intended action within __ days after the application is received.
30,60,90, or 120? |
|
Definition
|
|
Term
(ECOA) A mortgage broker may inform an applicant that Federal law requires the broker to ask about the race, sex, marital status, and age by putting the information on a web site.
A) False, this information must be given to the applicant in person.
B) True, as long as the applicant consents and can access the information.
C) False, the information must be communicated directly through e-mail.
D) True, as long as the information remains available for 30 days. |
|
Definition
| B) True, as long as the applicant consents and can access the information. |
|
|
Term
(ECOA) Any person who regularly extends, renews, or continues creit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit is a:
A) Buyer
B) Creditor
C) Lender
D) Adjunct |
|
Definition
|
|
Term
(ECOA) Entities making business or commercial loans must maintain records or other data relating to those loans for a period of no less than __ years, in order to _______.
A. 3, keep statistics on the ethnic makeup of their client roster.
B. 1, prove compliance with FCRA and TIL
C. 1, prove compliance with ECOA
D. 3, show evidence of yearly volume. |
|
Definition
| C. 1, prove compliance with ECOA |
|
|
Term
| (ECOA) Entities making residential loans must maintain records or other data relating to those loans for a period of no less than __, in order to _______. A) 2 years, keep statistics on the ethnic makeup of their client roster. B) 25 months, prove compliance with the ECOA C) 1 year, prove compliance with the FCRA and TIL D) 5 years, show evidence of average yearly volume. |
|
Definition
| B) 25 months, prove compliance with the ECOA |
|
|
Term
(ECOA) The term _____ does not include refusal to extend additional credit under an existing credit arrangement where the applicant is either delinquent or in default or where additional credit would exceed a previously established credit limit.
A) reverse action
B) adverse action
C) delinquency
D) redlining. |
|
Definition
|
|
Term
What is the average origination fee at the time of transaction.
1,2,3,4 |
|
Definition
|
|
Term
A responsible broker _______ arranges co-signed mortgages.
Always, Never, Sometimes |
|
Definition
|
|
Term
A vendor taking advantage of the consumer by charging unjustly high prices through fraud or lack of alternatives is called.
A) Unbundling
B) Price Gouging
C) Padding Recording Fees
D) Balloon Payment |
|
Definition
|
|
Term
Balloon payment loans are ______ predatory loans.
A) always
B) not always
C) never
D) fraud |
|
Definition
|
|
Term
Charging borrowers above the legally set rate for this step in the loan process is:
A. Price Gouging
B. Inflated Appraisal Fees
C. Unbundling
D. Padding Fees |
|
Definition
|
|
Term
Duplication costs that should be included under other charges is ______.
A. Unbundling
B. Price Gouging
C. Padding Recording Fees
D. Inflated Appraisal costs. |
|
Definition
|
|
Term
If a child misses payments on a loan co-signed by her parents, whose credit will be affected?
A. Only the child's
B. The parents only
C. Both.
D. No one's |
|
Definition
|
|
Term
Predatory lending increased greatly in the
A. 1960s
B. 1970s
C. 1980s
D. 1990s |
|
Definition
|
|
Term
Pushing subprime products upon vulnerable or underserved groups for reasons other than credit quality is ________.
A. Steering
B. Subprime lending.
C. Reverse redlining.
D. Contract Knavery. |
|
Definition
|
|
Term
What is meant by the term "ethics?"
A. An overall system of beliefs or values which help us decide right and wrong, good and bad.
B. Specific rules that tell us how to behave morally.
C. The goal of good behavior.
D. The actions we take and the decisions we make that reflect a system of beliefs. |
|
Definition
| D. The actions we take and the decisions we make that reflect a system of beliefs. |
|
|
Term
When is it acceptable to forge a borrower's signature on loan documents?
A) When it is in the best interest of time and ease for the borrower.
B) Never
C) When the borrower says it's okay
D) When it is office policy. |
|
Definition
|
|
Term
Which of the following is NOT a sign of predatory lending?
A) Full disclosure of the loan terms.
B) Credit insurance is tacked on without explanation
C) Equity will be lost in the home.
D) The consumer is encouraged to sign over the deed to his house. |
|
Definition
| A) Full disclosure of the loan terms. |
|
|
Term
| Who reaps the benefits of ethical behavior in mortgage transactions. |
|
Definition
|
|
Term
| Affiliates wishing to use consumer information for marketing purposes may do so if they either inform the consumer of the marketing or the consumer was given a chance to... |
|
Definition
|
|
Term
FACTA amends the _______.
A. Patriot Act
B. Fair Credit Reporting Act.
C. Bill of Rights
D. Truth in Lending Act. |
|
Definition
| B. Fair Credit Reporting Act. |
|
|
Term
Which of the following need NOT be included on the credit score disclosure?
A. Alternative consumer reporting agencies that may be used.
B. The range of possible credit scores under the model used.
C. The date the credit score was created.
D. The consumer's current credit score. |
|
Definition
| A. Alternative consumer reporting agencies that may be used. |
|
|
Term
Which of the following was NOT covered in FACTA?
1. Risk-Based Pricing Notices
2. Disclosure of Credit Scores
3. Customer Dispute Resolution
4. Telemarketing/Do Not Call |
|
Definition
| D. Telemarketing/Do Not Call |
|
|
Term
If a wholesale lender has denied your client and a Notice of Adverse Action Letter has been faxed to the Broker; what is the broker's responsibility?
A. Forward it to the borrower immediately.
B. Shred it to protect the client's confidentiality.
C. Plice it in the client's file.
D. I do not know. |
|
Definition
| A. Forward it to the borrower immediately. |
|
|
Term
| What does the FCRA stand for? |
|
Definition
| Fair Credit Reporting Act. |
|
|
Term
A condition that would make fraud more likely to occur in a mortgage company includes:
A. Weak oversight from management.
B. A thriving market.
C. Strong Auditing
D. Trustworthy Colleagues |
|
Definition
| A. Weak oversight from management. |
|
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Term
If an unethical broker has a borrower sign a blank loan application, he is possibly trying to pull what scam?
A. Steering.
B. Reverse Redlining.
C. Falsified loan application, unverified income.
D. Incapacitated borrower scheme. |
|
Definition
|
|
Term
A copy of the HUD-1 Settlement statement can be used to verify the net proceeds from the sale of real estate. Which of the following could be a warning sign of a potential problem?
A. The reference is made to secondary financing.
B. There was cash given to the borrower in the amount of $300.00 or less.
C. The date of settlement is delayed.
D. The sales price differs from the sales contract. |
|
Definition
| D. The sales price differs from the sales contract. |
|
|
Term
If the social security number on the credit report is invalid or differs from the loan application, the borrower may be ________.
A. An illegal alien.
B. deceased.
C. Using a false identity.
D. An undercover police officer. |
|
Definition
| C. Using a false identity. |
|
|
Term
If a mortgage originator assists a borrower or an appraiser in fraudulent activity, that originator:
A. Could be indicted as a conspirator
B. Would be viewed as a victim.
C. would be in NO trouble as the appraiser that is bound to behave ethically. |
|
Definition
| A. Could be indicted as a conspirator. |
|
|
Term
A builder has a single loan from his local bank that he has used to fund the construction of multiple homes. He does not want to pay off the entire loan balance when he sells a single home, so he makes sure his mortgage has?
A. A due on sale clause.
B. A release clause.
C. Lock in clause.
D. Non prepayment penalty clause. |
|
Definition
|
|
Term
A lender that has a lien in first position gives them priority over other liens except.
A. Subordinate mortgages.
B. Unpaid property taxes.
C. Mechanic liens.
D. Contractor lien. |
|
Definition
| B. Unpaid property taxes. |
|
|
Term
A loan adjustment based on LIBOR is affected by:
A.Lifetime Insured Bakers Offered Rates.
B. London Interbank Offered Rate.
C. London Index of Bankers Organization.
D. None of the above. |
|
Definition
| B. London Interbank Offered Rate |
|
|
Term
A loan processor may send out a form to verify the past two years of employment history, gross income, as well as verify the probability of continuing employment. This form is referred to as the.
A. VOE
B. VOD
C. VNE
D. JOB |
|
Definition
|
|
Term
A margin is best defined as:
A. The amount added to the index to adjust a rate.
B. An amount subtracted from the index to determine the future rates of ARMs
C. The range of adjustment on future rates of interest for any ARM loan.
D. Rate Caps |
|
Definition
| A. The amount added to the index to adjust a rate. |
|
|
Term
| A(n) ________ is a loan with an interest rate that can adjust monthly and offer a borrower a number of payment options, such as a 30 year fixed payment, 15 year fixed payment, interest only and a minimum monthly payment. |
|
Definition
|
|
Term
An appraiser would use a form ______ to certify completion of repairs or construction to a property.
A. 1004
B. DD214
C. 1008
D. 442 |
|
Definition
|
|
Term
Concerning FHA loans, a mortgage insurance premium is required until/for:
A. One year.
B. Seven years.
C. Five years.
D. 78-80% LTV, as long as the loan is no more than 0x30 in the last twelve months. |
|
Definition
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|
Term
Courtney would like to purchase a home from Chuck. Because of her prior credit problems, she is unable to obtain conventional financing. Chuck decides to sell Courtney the property, but he will retain the title until the purchase price of the property is paid in full. What type of agreement have they executed?
A. Purchase contract with note.
B. Purchase contract with note and mortgage.
C. Contract for deed.
D. Purchase contract and deed of trust. |
|
Definition
|
|
Term
FNMA and FHLMC securitize what types of loans?
A. JUMBO loans
B. Conventional loans.
C. Sub Prime loans.
D. VA loans. |
|
Definition
|
|
Term
If a lender agrees to subordinate a loan, what has occured?
A. The lender will allow their lien to stay in second position.
B. The borrower has a late payment reflected on his credit report.
C. A loan has been paid in full.
D. A loan has been approved. |
|
Definition
| A. The lender will allow their lien to stay in second position. |
|
|
Term
| If the borrower has less than a _____ down payment, mortgage insurance is required. Usually, the lenders will submit the loan package to a mortgage guaranty insurer at the same time the lender is underwriting the loan. |
|
Definition
|
|
Term
Increasing loan balances resulting from the application of periodic payments creates which of the following for borrowers?
A. Negative amortization.
B. Negative equity position.
C. Low LTV
D. Payment shock. |
|
Definition
| A. Negative amortization. |
|
|
Term
Mortgage back securities are a product of which of the following?
A. Secondary market.
B. Primary market.
C. Jumbo market.
D. Stock market. |
|
Definition
|
|
Term
Nontraditional ARMs are considered the riskiest of loans when they include any of the following except.
A. Low Doc programs.
B. Rate caps.
C. A refinance provision.
D. Teaser programs. |
|
Definition
| C. A refinance provision. |
|
|
Term
Out of all the loans below, which has a mandatory MIP?
A. All loans with less than 20% down payment.
B. FHA loans.
C. HELOC
D. VA |
|
Definition
|
|
Term
The acronym PFC stands for:
A. Paid from closing.
B. Prepayment penalty.
C. Prequalification of credit.
D. Prepaid Finance Charge. |
|
Definition
| D. The only forking one that has the initials PFC. |
|
|
Term
The below loan has an assumable clause:
A. Jumbo loans.
B. Conforming loans.
C. FHA loans for low income families.
D. VA loans. |
|
Definition
|
|
Term
The Cost of Funds Index is traditionally used to determine interest rates of what type of loans?
A. 360 month mortgage-Fixed rates.
B. Rate adjustments on adjustable rate programs.
C. Reverse mortgage.
D. HELOC |
|
Definition
|
|
Term
There are three usual approaches to determining the fair market value of a property: Which one does not belong?
A. Income approach
B. MLS sold homes approach.
C. Cost approach.
D. Sales approach. |
|
Definition
|
|
Term
This loan product is typically for borrowers over 62 years old who have built substantial equity or have paid their home in full and wish to cash out the equity in their home.
A. Graduated Payment Mortgage.
B. Reverse Annuity Mortgage.
C. Home Equity Line of Credit.
D. New Construction Loan. |
|
Definition
| B. Reverse Annuity Mortgage. |
|
|
Term
USDA loans are primarily for properties located in:
A. Urban areas.
B. Metro areas.
C. Suburban areas.
D. Rural areas. |
|
Definition
|
|
Term
VA loans require which of the following?
A. VA Value Certificate
B. Flood insurance
C. Pest inspection.
D. VA Funding Fee |
|
Definition
|
|
Term
| What are the words behind the acronym APR. |
|
Definition
| C. Annual Percentage Rate. |
|
|
Term
What entity insures FHA loans.
A. Fair Housing Authority
B. Federal Housing Administration
C. First-time Homeowner's Act.
D. None of the above. |
|
Definition
| B. Federal Housing Administration. |
|
|
Term
What factor do lenders analyze in order to determine if a borrower will be financially able to meet the demands of a loan repayment?
A. Amount of the loan request
B. Existing debt.
C. LTV
D. Length of the loans terms. |
|
Definition
|
|
Term
What is FNMA's primary purpose in the secondary market?
A. Fund loans once they are processed and closed.
B. Underwrite a loan.
C. Originate loans.
D. Provide a source of funds for lenders. |
|
Definition
| D. Provide a source of funds for lenders. |
|
|
Term
What is one of the many roles of the Federal Housing Administration?
A. Approves loans.
B. Gaurantees loans.
C. Insures loans.
D. Services loans. |
|
Definition
|
|
Term
What is used to determine the interest rate change on an ARM?
A. Index only.
B. YSP.
C. SRP
D. Index and Margin. |
|
Definition
|
|
Term
When a borrower reaches 62 years of age and he has significant equity in his home, which of the following mortgage programs would best assist that person if he is in need of addictional living expenses, access to funds for home repair or other needs?
HELOC
HECM
Swing-Loan
ARM |
|
Definition
|
|
Term
Which of the following best defines a loan that doesn't meet the loan limits of FNMA and FHLMC?
A. Non Conforming
B. Conventional loans
C. Subprimg loans
D. FHA and VA |
|
Definition
|
|
Term
Which of the following is another term for a junior lien?
A. First Mortgage
B. Subordinate Lien
C. HELOC
D. Reverse Mortgage |
|
Definition
|
|
Term
Which of the following is not considered a drawback in a Bi-Weekly payment mortgage?
A. Greater risk of late payments.
B. Each payment has an administrative service fee.
C. Bi-weekly programs offer lesser interest rates.
D. Borrower makes an extra payment each year. |
|
Definition
| D. Borrower makes an extra payment each year. |
|
|
Term
Which of the following loan programs does not require credit or income documentation and doesn't require repayment?
A. Reverse mortgage
B. Stated income mortgage
C. HELOC mortgage.
D. Arm mortgage. |
|
Definition
|
|
Term
Which of the following loan types is best described as a loan with a payment schedule make up of a series of small periodic payments and a larger sum due upon maturity?
A. Balloon Mortgage
B. Reverse Mortgage
C. ARM
D. Due-on-sale Clause |
|
Definition
|
|
Term
Which of the following loans might be used to finance a loan amount that is in excess of GSE's loan limits?
A. Subprime loans
B. Jumbo loans
C. Balloon loans
D. Reverse mortgages |
|
Definition
|
|
Term
Which of the following terms defines the method in whcih a lien is removed from property when payment is made in full.
A. Cure of Default
B. Acceleration
C. Reconveyance
D. Transmittal |
|
Definition
|
|
Term
Which of the following terms specifically refers to a loan that is not obtained through a program of the federal government?
A. USDA loans
B. Conforming loans
C. GNMA loans
D. VA and FHA loans |
|
Definition
|
|
Term
Which of the following would address the principal and interest payments due on a loan?
A. Margin
B. Index
C. Amortization schedule
D. Life of the loan caps |
|
Definition
|
|
Term
Why are FHA loans beneficial to lenders?
A. They are insured by the federal govt.
B. No escrow is required.
C. FHA loans are for low income families.
D. They finance 100% of the sales price. |
|
Definition
| A. They are insured by the govt. |
|
|
Term
________ are mortgages that do not fully amortize due to repayment terms of the loan.
A. Reverse annuity mortgages.
B. Balloon mortgages.
C. Graduated payment mortgages.
D. Home equity line of credit. |
|
Definition
|
|
Term
Any non-public, personal information a customer offers to a financial institution (paper, electronic, otherwise) that the institution or its affiliates handles or maintains is considered to be:
A. Confidential information.
B. Safeguarded information.
C. GLB information
D. Customer information. |
|
Definition
|
|
Term
Under GLB, mortgage lender and brokers, Check Cashers, Pay day lenders, and credit counselors are all examples of:
A. Depository institutions.
B. Financial institutions.
C. Regulatory agencies.
D. Banks. |
|
Definition
| B. Financial institutions. |
|
|
Term
After reviewing the trade off table, the borrower decides to accept the loan with the lower rate and the higher settlement costs. What is the next step for this loan?
A. Borrower must circle and initial the loan program in the tradeoff table.
B. The good faith estimate must be officially withdrawn.
C. A new good faith estimate must be provided.
D. All of the above. |
|
Definition
| C. A new good faith estimate must be provided. |
|
|
Term
HUD estimates that the new disclosures will reduce settlement costs by _____ per transaction.
A. $250
B. $500
C. $700
D. $1000 |
|
Definition
|
|
Term
Many of the changes to the RESPA rule are designed with what purpose in mind?
A. Increase loan volume
B. Reduce disclosure
C. Facilitate shopping
D. Clarify HVCC procedures |
|
Definition
|
|
Term
Once the good faith estimate has been delevered, what is the only fee that can be collected for three business days?
A. Credit report fee
B. Appraisal fee, IF in compliance with HVCC
C. Application fee
D. No fee of any kind |
|
Definition
|
|
Term
What is the fine for a RESPA violation?
A. 1 year in prison
B. $7500 fine per violation
C. 1 year in prison and a $10,000 fine.
D. $25,000 and 6 months in prison. |
|
Definition
|
|
Term
What is the maximum percentage that a settlement service selected by the originator can INCREASE?
A. 1/8th of a percent
B. 5%
C. 10%
D. 0% |
|
Definition
|
|
Term
What is the maximum that a disclosed origination charge can INCREASE?
A. 10%
B. 5%
C. 0%
D. .125% |
|
Definition
|
|
Term
What is the minimum time the disclosure for settlement costs be valid?
A. There is no time limit
B. 10 days
C. 15 days
D. 30 days |
|
Definition
|
|
Term
What unethical practice is the new Good Faith Estimate designed to reduce?
A. Redlining
B. Flipping
C. Bait and Switch
D. Affinity Fraud |
|
Definition
|
|
Term
When disclosing a prepayment penalty, what must we assume?
A. The loan will prepay in 3 years
B. That all payments have been made on time.
C. That the loan will prepay immediately, when it is costliest.
D. That the rate has remained constant. |
|
Definition
| C. That the loan will prepay immediately, when it is costliest. |
|
|
Term
85. Which of the following is NOT a RESPA mandated disclosure?
A. HUD-1 Settlement Statement
B. Good faith estimate
C. Regulation Z Disclosure
D. Special information booklet. |
|
Definition
| D. Special information booklet |
|
|
Term
Which of the following items would NOT necessarily be needed in order to have a "GFE Application"?
A. Property address
B. Social Security Number
C. Verification of Delivery
D. All of the above are required for a GFE Application |
|
Definition
| C. Verification of Delivery |
|
|
Term
One purpose of HMDA and Regulation C is to provide the public wth information that will help show whether financial institutions are serving the ________ of the neighborhoods and communities in which they are located.
A. Housing credit needs
B. Local banking needs
C. Real estate market
D. None of the above |
|
Definition
|
|
Term
Under the Home Mortgage Disclosure act, if information regarding the borrowers' ethnicity, race, and sex is not provided by the applicant and if the application is submitted in person, the lender is required to note the information on the basis of _________ or surname.
A. Interviewer's opinion.
B. Previous experience
C. Visual observation.
D. Employment status. |
|
Definition
|
|
Term
For the initial disclosures, what is the definition of "business day?"
A. Any day other than Sundays and recognized legal holidays.
B. Monday through Friday.
C. Any day other than bank holidays.
D. A day where the creditor is customarily open to the public for carrying on substantially all of the creditor's business functions. |
|
Definition
| D. A day where the creditor is customarily open to the public for carrying on substantially all of the creditors business functions. |
|
|
Term
How much must the APR change on a loan for it to be required to redisclose?
A. 1/8%
B. .0025%
C. 1%
D. $350 or 1/4% whatever is less. |
|
Definition
|
|
Term
What fees may be collected prior to the 3 business day waiting period?
A. Appraisal fee, as long as it goes to the appraiser at the door.
B. Credit report fee.
C. No fee may be collected before the 3 day waiting period
D. Only reasonable, bona fide fees may be collected. |
|
Definition
|
|
Term
What is the purpose of the 2 different definitions of "business day.
A. To maintain consistency with RESPA
B. To manage expectations with the USPS
C. To allow businesses to choose which definition best fits with their business model
D. All of the above. |
|
Definition
| A. To maintain consistency with RESPA |
|
|
Term
Which of the following would be considered an acceptable reason to waive the waiting period.
A. The property secured by the loan will be offered up for sheriff's sale during the waiting period.
B. The borrower has to attend a funeral out of town
C. The borrower has non-refundable tickets for a trip during the waiting period.
D. If the loan closes after the first, the borrower will owe more in interim interest. |
|
Definition
| A. The property secured by the loan will be offered up for sheriff's sale during the waiting period. |
|
|
Term
A lending arrangement where either a closed-end second-lien or a home equity of credit is originated simultaneously with the first lien mortgage loan, typically in lieu of a higher down payment, is commonly referred to as a:
A. Equity trade.
B. Option loan.
C. Piggyback loan.
D. Cash out loan. |
|
Definition
|
|
Term
Which of the following is NOT a risk associated with a Payment Option ARM loan?
A. Lower monthly payments.
B. Negative amortization
C. Payment shock
D. Adjustable rate. |
|
Definition
| A. Lower monthly payments. |
|
|
Term
Which of the following is not a risk associated with nontraditional mortgages?
A. Risk layering
B. Negative amortization
C. Payment shock
D. Fixed rate loans |
|
Definition
|
|
Term
Which one of these areas is not addressed by the agencies guidance on nontraditional mortgage guidance?
A. Portfolio and risk management practices.
B. Appraisal and fair market value practices
C. Loan terms and underwriting standards
D. Consumer protection issues. |
|
Definition
| B. Appraisal and fair market value practices. |
|
|
Term
A person who can't provide authenticating information beyond what's generally available from a wallet or credit report-for example, a person who can't answer a challenge question, is an example of:
A. Suspicious Account Activity
B. Suspicious personal identifying information.
C. Suspicious activity report
D. Suspicious document information |
|
Definition
| B. Suspicious personal identifying information. |
|
|
Term
Because Red Flags is Risk Based, your program must be appropriate to the ________ and _______ of your business or organization and the nature and scope of its activities.
A. Size and integrity
B. Size and complexity
C. Scale and integrity
D. Size and proportion |
|
Definition
|
|
Term
The potential patters, practices, or specific activities indicating the possibility of identity theft are considered to be:
A. FACTA violations
B. FCRA Violations
C. Red Flags.
D. ECOA Rules |
|
Definition
|
|
Term
Which of the following is the primary purpose of the Red Flags Rule?
A. To prevent identity theft.
B. Improve resolution of consumer disputes.
C. Improve the accuracy of consumer records.
D. Improve the processing time of credit reports. |
|
Definition
| A. To prevent identity theft. |
|
|
Term
Which of the following is NOT a purpose of the Fair and Accurate Credit Transactions Act (FACTA)
A. To prevent identity theft.
B. Improve resolution of customer disputes.
C. Improve the accuracy of consumer records.
D. Improve the processing time of credit reports. |
|
Definition
| D. Improve the processing time of credit reports. |
|
|
Term
Federal law establishes a _____ day transfer period in which no late fees can be charged to a borrower who sends his or her payment to the original servicer, rather than the new one, before the payment's due date.
A. 15
B. 30
C. 45
D. 60 |
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Definition
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Term
For class action lawsuits seeking damages for non-compliance with residential mortgage regulations, the offending servicer must pay an amount not exceeding:
A. $1000 per borrower
B. 500K in total payouts
C. A payout totaling one percent of the servicer's net worth
D. All of the above |
|
Definition
| D. All of the above FINALLY GEEZ |
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Term
If a servicer receives a "qualified written request" from a borrower for information about an account, the servicer must research the borrower's inquiry and come to a decision as to whether there is indeed an error within ____ business days after receiving the request.
A. 30
B. 60
C. 90
D. 120 |
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Definition
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Term
RESPA is a federal statute that protects borrowers involved in using residential mortgage loans for the purchases of:
A. 1 to 4 family dwellings
B. Condominiums
C. Commercial Real Estate Property
D. All of the above
E. Only A and B |
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Definition
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Term
The Uniform Settlement Statement must conspicuously and clearly itemize all charges to the borrower and the seller in connection with the settlement, as well as indicating whether any title insurance premium included in the charges covers or insures the following:
A. The lender's interest in the property
B. The borrower's interest in the property
C. Both parties interest in the property
D. All
E. None |
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Definition
| A. The lender's interest in the property. |
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Term
Lenders must provide the Settlement Cost Information Booklet either by hand delivery or by mail within ____ business days after receiving the application from the potential borrower.
A. 2
B. 3
C. 4
D. 5 |
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Definition
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Term
The truth in lending act requires two additional disclosures for ARMs on a consumers principal dwelling with a loan term greater than 12 months when the rate can change after the consummation of the loan. One disclosure is a booklet titled "Adjustable Rate Mortgages." Choose the other required disclosure.
A. Right to convert to a fixed rate disclosure.
B. A disclosure for every adjustable rate program in which the consumer expresses an interest.
C. A disclosure describing every adjustable rate program offered to the consumer in the last 24 months.
D. A HARM disclosure. |
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Definition
|
|
Term
________ must be reported to borrowers on the truth in lending disclosure.
A. Note rates.
B. Finance charges
C. Payment address
D. Servicer's name |
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Definition
|
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Term
Educational and state-required materials are not counted as _____, unless they combine educational or state required information with a sales pitch.
A. Advertisements
B. Stationery
C. Letterhead
D. Brochures. |
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Definition
|
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Term
Evidence of compliance with the TILA must be retained for at least ___ years after the date of disclosure
1,2,3,4 |
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Definition
|
|
Term
How many APR's are there fore one loan.
1,2,3, it depends on the risk of the loan. |
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Definition
|
|
Term
How much must the APR change on a loan before the loan requires disclosure.
A. 1/8%
B. .0025%
C. 1%
D. $350 or 1/4%, whichever is less |
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Definition
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Term
If a trigger term is used when advertising a _____ credit plan, the other major terms (including APR) must also be disclosed.
A. Closed-End
B. Open-End
C. ARM
D. Payment option |
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Definition
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Term
If one or the multiple borrowing parties on a loan decides to exercise the right of rescission, the act will apply to ______ of the borrowing parties
A. one
b. none
c. all
d. some |
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Definition
|
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Term
The APR is the actual cost of the loan in the form of a(n) ______ rate.
A. Annual
B. Monthly
C. Amortized
D. Augmented |
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Definition
|
|
Term
The truth in lending act is also known as what?
A. TLA
B. FHA
C. Regulation Z
D. Don't Lie Act |
|
Definition
|
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Term
TILA requires two additional disclosures for ARMs on a consumers principle dwelling with a loan term greater than 12 months when the rate can change after the consummation of the loan. One disclosure is a booklet titled "Adjustable Rate Mortgages." Choose the other disclosure.
(already had this question) |
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Definition
| A disclosure for every adjustable program in which the consumer expresses an interest. |
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Term
Under TILA, as it relates to the initial disclosures, what is the definition of a "business day"
(already had this one) |
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Definition
| A day where the creditor is customarily open to the public for carrying on substantially all the creditors business functions. |
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Term
Which of the following payments must be made by the lender in both individual and class action lawsuits for violations of the truth in Lending Act
A. $500K or 1% of the lender's net worth
B. $50K
C. Actual damages
D. 100K |
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Definition
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Term
While a lender does not have to advertise every single plan he or she offers, it is unlawful to conceal less _________ plans.
A. Consumer driven
B. Consumer friendly
C. Lender offered
D. Lender serviced |
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Definition
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Term
While _____ terms require disclosures, general advertising terms do not, because they do not refer to repayment period length or down payment cost.
A. Specific
B. Non-specific
C. Trigger
D. Stock |
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Definition
|
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Term
Regulation Z applies to businesses that extend credit if which of the following conditions are met:
A. The credit is offered to consumers.
B. The credit is subject to finance charge and payable in more than four installments.
C. The credit is primarily for personal, family, or household purposes.
D. All of the above |
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Definition
|
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Term
The borrower must notify the creditor of any intent to rescind on a loan by midnight of the third day after:
A. Consummation of the loan.
B. Delivery of the right to rescind.
C. Delivery of disclosures.
D. Whichever of the above comes last. |
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Definition
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Term
A borrower is denied a loan request due to the credit score not meeting lender's guidelines, what must be done next?
A. Borrower verbally informed.
B. Mail a copy of credit with instructions to dispute scoring.
C. Initiate an Adverse Action Notice
D. Make counter offer of loan terms |
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Definition
| C. Initiate an Adverse Action Notice |
|
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Term
A broker pays for the title services on behalf of the developer. In return, the developer agrees to refer all buyers to the broker. Who is in violation of Section 8?
A. Neither the broker nor the developer.
B. The Broker
C. Both the broker and the developer
D. the developer. |
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Definition
|
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Term
A lender is allowed to deny an applicant based upon which factors?
A. The applicant is unmarried.
B. The applicant has sued the lender previously for alleged discrimination.
C. Part of the applicants income is derived from public assistance
D. Applicant's income is unstable. |
|
Definition
| D. Applicant's income is unstable. |
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Term
A Lender is prohibited from using the below criteria on a credit decision except?
A. The applicant's income lacks stability.
B. The applicant receives public assistance income.
C. The applicant has previously used a consumer credit counseling program.
D. The applicant is divorced. |
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Definition
| A. The applicant's income lacks stability. |
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Term
A mortgage broker or loan officer my not charge or receive a fee for locking in an interest rate unless there is a written agreement signed by the mortgage applicant and mortgage broker containing a statement of whether the fee to lock in the interest rate is refundable and, if so, the terms and conditions necessary to obtain the refund.
True or False |
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Definition
|
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Term
All of the following violate RESPA except?
A. A lender retains a portion of a fee paid to a surveyor for completion of a survey report.
B. A mortgage broker agrees to pay a builder for the referral of the builders clients to the broker.
C. A mortgage broker pays a fee to a title company for services actually performed.
D. A mortgage broker accepts a fee for sending its customers to a specific real estates sales associates. |
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Definition
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Term
Based upon Fair Lending Laws, you are only permitted to ask a loan applicant:
A. If they intend to continue employment once they have children
B. Their race.
C. Their religion
D. If they plan on having children. |
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Definition
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Term
Bob Jackson has recently been turned down for a loan request. He has paid for the appraisal and wants a copy of the appraisal. How many days days the consumer have to request a free copy.
A. 90 days within receiving the Notice of Adverse Action
B. Within 65 days of application
C. Within 30 days after Bob receives his notice of his right to receive the appraisal.
D. Within 15 days of the appraisal being performed. |
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Definition
| A. Within 90 days of the NAA |
|
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Term
Borrowers get yield spread premium disclosures?
A. For high cost loans on the section 32 disclosure.
B. On application, TIL and the mortgage or note
C. GFE and Settlement Statement
D. Only on refinance transactions. |
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Definition
| C. GFE and Settlement Statement. |
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Term
Business days under TILA for recission rights include:
A. Every day except for Sundays and Federal holidays.
B. Every day, no exlusion of days
C. Every day excluding Sundays
D. There is no rescission period. |
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Definition
|
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Term
Explain the difference between HUD-1 and GFE.
A. HUD-1 shows an estimate of the settlement costs and the GFE offers the actual costs at settlement.
B. The GFE and HUD-1 are the same documents with different titles.
C. The GFE is a preview and estimate of the settlement costs and the HUD-1 reflects the actual costs of the settlement.
D. Brokers and lenders are not required to provide the GFE or the HUD-1. |
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Definition
|
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Term
False information submitted by an applicant on a federally covered loan, the applicant's penalty may include?
A. License revocation
B. Up to 30 years incarceration and a 1000K fine
C. A misdemeanor charge.
D. Applicant placed on FBI watch list. |
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Definition
| B. 1,000,000 fine and 30 years in prison. |
|
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Term
Federal fair lending laws exclude ___ from consideration when originating a loan.
A. A person of a different race than originator credit profile shows numerous delinquencies greater than 30 days.
B. An applicant with a disability has evidence of employment instability with several gaps of employment last months at a time over 24 months.
C. An applicant is pregnant and might not return to work.
D. A divorced applicant with a recent bankruptcy evidenced in the application. |
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Definition
|
|
Term
Gramm-Leach-Bliley defines nonpublic information as?
A. The assessed value of the subject property.
B. The legal description or street address of the subject property
C. Ownership history of subject property.
D. The borrower's current asset information. |
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Definition
| D. The borrower's current asset information. |
|
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Term
How many years does a consumer have to take civil action against a creditor suspected of violating the ECOA?
5,3,2,1 |
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Definition
|
|
Term
If a consumer is denied credit, the ECOA requires the lender to forward the Notice of Adverse Action. This notice provides all the following info except:
A. Reason for denial.
B. Information on the credit report agency used.
C. Credit Score
D. Description of the credit requested. |
|
Definition
|
|
Term
If a creditor did not inform the borrower within 30 days of a credit decision that was considered an adverse action, the creditor violated which law or supporting regulations?
A. RESPA
B. ECOA
C. FCRA
D. TIL |
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Definition
|
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Term
If a mortgage broker gives a real estate agent a gas card in the amount of $75 for the referral of a home buyer, which federal act was violated?
A. RESPA
B. ECOA
C. Fair Housing Act
D. FCRA |
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Definition
|
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Term
If a mortgage originator paid referral fees for the referral of settlement services the minimum penalty they could face includes?
A. 100K fine and 10 years in prison being somebody's bitch.
B. $25K fine no prison.
C. 10K fine no prison.
D. 10K fine and 1 year in prison being somebody's bitch. |
|
Definition
| D. 10K fine 1 yr... bitch. |
|
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Term
If an applicant refuses to give their race & gender on the 1003, what must be done?
A. The loan officer must use his best visual observation.
B. Provide a Notice of Adverse Action
C. Reject the loan application as incomplete.
D. Require to applicant to complete the section. |
|
Definition
|
|
Term
If we are advertising a mortgage loan with a 6.99% APR, under the TILA what other info is required to be disclosed.
A. None
B. Monthly payments
C. Finance Charge
D. Payment period of the loan. |
|
Definition
|
|
Term
Included in the finance charge according to TILA is?
A. Survey fees.
B. Title insurance charges.
C. Appraisal fee
D. Mortgage broker fee |
|
Definition
|
|
Term
It is legal for settlement service provider A to pay settlement service provider B a portion of the fees charged to a borrower only when:
A. If both providers have an agreement to split the fees.
B. If service provider B actually performs bona fide services for the fee
C. As long as the providers are separate entities and not affiliated
D. As long as the consumer is aware of the splitting of the fees. |
|
Definition
| B. If service provider B actually performs bona fide services for the fee. |
|
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Term
John Q. Public and Shari N. Public acquired this property 4 years ago, settled on a refinance transaction for their primary residence subjecting the transaction to rescission provisions under TIL, what is the Public's deadline for rescission?
A. 3 years after closing.
B. 3 business days excluding Saturdays.
C. 3 business days including Saturday and excluding holidays.
D. 3 days. |
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Definition
| A. 3 years after closing. |
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Term
Recorded on the HUD-1 settlement or closing statement, fees and other charges related to the loan transaction must be expressed in terms as:
A. Actual exact dollar figures
B. Dollar figure estimates
C. Estimated percentages of the principal balance
D. Actual percentages on the loan balance. |
|
Definition
|
|
Term
RESPA mandates disclosure requirements for which types of laons?
A. A loan to purchase a building used as a grocery store.
B. A loan to purchase land and buildings to grow corn.
C. A loan to purchase 50 wooded acres
D. An FHA 203k rehab loan to buy and repair a duplex. |
|
Definition
|
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Term
Section 8 violations of RESPA include which of the following?
A. A settlement attorney pay a mortgage company $250 per client referred.
B. Broker receives origination fee by Yield Spread Premium
C. A company receives compensation for doing a title search.
D. A mortgage company charges $12 for a credit report that costs the mortgage company $12 |
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Definition
|
|
Term
Settlement of a refinance transaction for a borrower's principal residence occurs on Tuesday at 130pm, when is the loan funded?
A. Saturday
B. Friday at 1:30pm
C. The next Monday
D. Tuesday, day of closing. |
|
Definition
|
|
Term
The borrower must receive a new TIL disclosure when?
A. The borrower objects to original APR and the originator reduces the APR by one tenth of one percent.
B. The interest rate on TIL exceeds that of the GFE by more than 1/8th of one percent.
Loan program changes causes APR to increase by more than 1/8th of one percent than originally disclosed.
D. APR increase by more than 1/4th of one percent compared to the original disclosure. |
|
Definition
|
|
Term
The Homeowners Protection Act mandates servicers do which one of the following.
A. Collect PMI until the loan is paid in full.
B. Automatically discontinue PMI when the borrower reaches 78%
C. Drop PMI once the borrower reaches 80% LTV
D. Automatically drop PMI after 5 years. |
|
Definition
|
|
Term
The privacy act (also known as the GLBA) requires how much notice to a consumer before on can release their non-public personal information previously disclosed to the consumer by the creditor that the non-public personal information would not be shared with affiliates or third parties?
A. 60 days
B. 30 days
C. 3 days
D. A reasonable amount of time. |
|
Definition
|
|
Term
The TIL disclosure is provide with?
A. 24 hours of application.
B. 3 days of applicatioin.
C. 3 days of closing.
D. 3 days prior to closing. |
|
Definition
|
|
Term
The TILA requires all of the below info to be disclosed to the applicant when they are applying for an ARM, except.
A. Frequency of changes in the APR
B. Possibility of changes in the payment amount over time.
C. Index used to determine the ARM
D. Statement that the interest rate will be offered for the duration of the loan. |
|
Definition
|
|
Term
Under TILA, which of the following is included in the finance charge calculations?
A. Seller paid points
B. Title insurance premium
C. County recording fee
D. Mortgage broker fee. |
|
Definition
|
|
Term
Under what circumstances can a lender require use of the lender's affiliated business?
A. Only if the lender owns less than 1% of affiliated business.
B. If the affiliated busines is an attorney, credit reporting agency or an appraiser and there are no referral fees or kickbacks paid
C. If there is no referral fees or kickbacks
D. All required use prohibited by RESPA |
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Definition
|
|
Term
What does TILA require mortgage originators to disclose on the borrower?
A. A copy of the appraisal report if the borrower has paid for it.
B. Estimated closing costs within 10% of actual.
C. Credit terms for the transaction.
D. The average conforming interest rate for the previous month. |
|
Definition
|
|
Term
What is the primary federal statute that govers residential mortgage loans?
A. RESPA
B. FCRA
C. TILA
D. FHA |
|
Definition
|
|
Term
What is the primary purpose of ECOA?
A. To ensure applicants have equal access to credit.
B. To ensure credit info is reported equally.
C. Requires disclosure of closing costs.
D. Requires clear disclosure of credit terms. |
|
Definition
|
|
Term
What is the primary purpose of FCRA?
A. Require credit reporting agencies purge old data.
B. To ensure equal access to credit.
C. To ensure accuracy and fairness of credit reporting.
D. Requires clear disclosure of credit terms. |
|
Definition
|
|
Term
What is the primary purpose of RESPA?
A. Direct industry to standardized costs.
B. Limit points and fees.
C. Disclose to consumer the true cost of cedit on a yearly basis.
D. Advance disclosure of closing closts and prohibitions on referral fees. |
|
Definition
|
|
Term
What is the purpose of regulation B?
A. Eliminated splitting of fees.
B. Prohibits discrimination in credit transactions.
C. Requires disclosure of closing costs.
D. Prohibits the charging of fees for the completion of the GFE and TILA forms. |
|
Definition
|
|
Term
What law was created to ensure accurate credit information is used when making a credit decision?
A. RESPA
B. FCRA
C. TIL
D. ECOA |
|
Definition
|
|
Term
When a mortgage company is earning YSP on the origination of a mortgage loan which disclosure indicates the amount?
A. Settlement statement
B. TIL disclosure
C. Loan origination agreement required under federal law.
D. Affiliated business arrangement disclosure |
|
Definition
|
|
Term
When calculating finance charges in compliance with the TILA, all of the following are included except.
A. Appraisal fees
B. Mortgage broker fees.
C. PMI
D. Settlement fees. |
|
Definition
|
|
Term
Which law dictates that lenders who take 100 or more application a year report detailed info about their loan applicants and the applicant's demographic info?
A. ECOA
B. RESPA
C. Privacy Act (GLB)
D. HDMA |
|
Definition
|
|
Term
Which of the below is considered the "Cost of Credit" expressed in a dollar amount?
A. LTV
B. APR
C. YSP
D. Finance charge |
|
Definition
|
|
Term
Which of the below repsonses would be a violation of an applicant's right under the Fair Lending Laws?
A. The applicant's age is below the required age of excecuting a contract.
B. An applicant's marital status may lead to a change of employment.
C. Their income doesn't meet the requirement of the loan request.
D. Applicant's credit history shows many lates and defaults. |
|
Definition
|
|
Term
Which of the following violates RESPA?
A. A lender pays a fee to an appraiser for completion of an appraisal report.
B. A mortgage borker receives indirect compensation in the form of yield spread premium for originating a loan at an interest rate in excess of the "par" interest
C. A mrtgage broker accepts a fee for sending its customers to a specific real estates sales associate.
D. A mortgage broker pays a fee to a title company for the settlement of the loan. |
|
Definition
|
|
Term
Who is responsible for prividing the GFE to the borrower when the loan is originated by an entity that is acting as a mortgage broker?
A. Both the lender and the broker.
B. Only the lender
C. The broker.
D. The settlement agent. |
|
Definition
|
|
Term
Your loan applicant has a low credit score, when must you advise him of the status of his application?
A. Within 3 days
B. Within 3 business days
C. Within 30 days.
D. Within 30 business days. |
|
Definition
|
|
Term
| 20 of the other test questions from here on out. |
|
Definition
|
|
Term
The penalities for paying or accepting an illegal referral fee are:
A. Fines of up to $5k and one year in prison
B. Fines of up to 10K and one year in prison.
C. Fines of up to 10K and 3 years in prison
D. Fines of up to 20K and one year in prison |
|
Definition
|
|
Term
Finance charges always include which of the following?
A. Mortgage broker fee.
B. Title insurance charges.
C. Document prep fees
D. Credit Report Fee |
|
Definition
|
|
Term
A loan contains prepayment penalties, which of the following documents would a borrower review to confirm this?
A. Deed of trust
B. TIL Disclosure and promissory note
C. HUD-1 and the GFE
D. Mortgage Servicing Disclosure |
|
Definition
|
|
Term
For the purposes of rescinding a loan transaction, "business days" includes every day of the week except:
A. Sat and Sun
B. Sun
C. Federal holidays
D. Sun and Fed holidays. |
|
Definition
|
|
Term
Five siblings have ownership rights to a property. If a refinance transaction affecting the property is subject to rescission, how many of these individuals must submit a rescission notice in order to void the loan.
A. Any one of the five.
B. All five.
C. A majority.
D. At least two. |
|
Definition
|
|
Term
Who must receive a Notice of Right to cancel in a Refinance transaction?
A. Anyone with ownership interest in the property.
B. Only parties who are signing the mortgage.
C. Only parties with 51% or more ownership in the property.
D. Only the primary borrower |
|
Definition
|
|
Term
John Brown and Jane Brown are co-owners of a property and are entering into a refinance transaction that is subject to rescission. John is provided with one copy of Notice Right to cancel and Jane receives no disclosures. What is their deadline for rescission.
A. Midnight on the third day following closing.
B. 72 hours after closing.
C. Three years after closing.
D. Three business days after closing. |
|
Definition
|
|
Term
Which of the following fees is not included in the GFE?
A. Loan origination fees.
B. Discount points.
C. Real Estate taxes
D. Real Estate broker fees. |
|
Definition
|
|
Term
If a mortgage broker is receiving yield spread premium on a loan transaction, on which of the following documents must the amount be disclosed?
A. GFE
B. TIL disclosure
C. Affiliated business arrangement disclosure
D. Borrower/broker agreement |
|
Definition
|
|
Term
The TIL disclosure must be redisclosed if:
A. The borrower rejects the APR stated on the initial TIL
B. The APR changes by more than 1/4% before closing.
C. The APR changes by more than 1/8% before closing.
D. The APR on the TIL and GFE don't match. |
|
Definition
|
|
Term
Lenders must report detailed information about loan transactions and demographic information concerning borrowers in order to prove they are not discrimination. Which of the following laws creates that reporting requirement.
A. HDMA
B. RESPA
C. TILA
D. Gram-Leach-Bliley Act |
|
Definition
|
|
Term
Yield spread premium is disclosed to the borrower:
A. Only on high cost loans
B. On the GFE and Settlement Statement
C. Only on purchase transactions.
D. On the TIL disclosure promissory note. |
|
Definition
|
|
Term
Aggregate escrow analyses are used to do which of the following?
A. Prevent escrow shortages
B. Prevent escrow overages
C. Ensure the loan is properly amortized.
D. Reduce the burden on the servicer. |
|
Definition
|
|
Term
If an individual submits false information for the purpose of obtaining a federally covered loan, he/she could face:
A. Up to 1,000,000 fine and prison.
B. License suspension
C. Misdemeanor conviction
D. A reprimand and loss of commission |
|
Definition
|
|
Term
When is the servicing disclosure statement provided to a borrower?
A. At closing
B. Three business days after application
C. Three business days prior to closing
D. At the time loan servicing is transferred. |
|
Definition
|
|
Term
An initial servicing transfer notice must be provided to a borrower __ days prior to transfer of servicing on a loan.
15,30,45,60 |
|
Definition
|
|
Term
A lender has an affiliated business arrangement with a third party service provider. Under what circumstances can the lender require a borrower to use the services in a loan transaction?
A. If there is no kickback or referral fees.
B. Only if the lender has an ownership interest of more than 1%
C. If there is no kickback on referral fees and the service provider is an attorney, credit reporting agency or appraiser
D. Under no circumstances. |
|
Definition
|
|
Term
What is the primary purpose of TILA?
A> To ensure that creditors do not charge high interest rates on credit.
B. To ensure that third party service providers do not charge high fees.
C. To ensure that creditors provide consumers clear disclosure of the terms of credit.
D. To ensure that applicants have equal opportunity to credit from lenders. |
|
Definition
|
|
Term
Which of the following documents shows the cost of a loan expressed as an annual percentage rate?
A. GFE
B. HUD-1
C. Consumer caution
D. TIL Disclosure. |
|
Definition
|
|
Term
A lender is permitted to deny an applicant credit based on which of the following factors?
A. The applicant receives public assistance
B. The applicant has participated in a consumer credit counseling program.
C. The applicant lacks income stability
D. The applicant is divorced. |
|
Definition
|
|
