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MLO Final Exam
Mortgage Lending Officer Final Exam
| Term | Definition |
|---|---|
| Interest charged in excess of the legal limit as established by state law | Usuary |
| A long-term, low, or no down payment guaranteed loan | VA loan |
| An upfront fee paid to the VA on a VA guaranteed loan | Funding fee |
| Document signed by the borrower's financial institution verifying the status and balance of his/her financial accounts | Verification of Deposit (VOD) |
| The voluntary renunciation, abandonment, or surrender of some claim, right, or privilege | Waiver |
| A fee charged by a lender used to offset the cost associated with holding a mortgage until it can be sold on the secondary market | Warehouse fee |
| A revolving line of credit used by mortgage companies in order to fund loans | Warehouse line of credit |
| An instrument where the seller/grantor warrants that the title is clear and free of encumbrances | Warranty deed |
| A loan settlement where the funds for the loan are disbursed at the same time | Wet settlement |
| A legal mechanism for local governments to regulate the use of privately owned real property in order to prevent conflicts relating to land use and promote orderly development | Zoning |
| A type of wholesale lending arrangement where mortgage brokers are permitted to originate, close, and fund a loan. Using the funds of the funding lender and then assigning the loan back to the funding lender | Table funding |
| A financing tool used to reduce the interest rate and monthly payments on a mortgage for a short-term period of time | Temporary buy down |
| An estate that exists between a husband and wife who have an equal right of possession and enjoyment during their lives, with the surviving spouse taking complete possession of the estate upon the death of the other | Tenancy by the entirety |
| An ownership of property by two or more persons each of whom has an undivided interest which passes, upon death, to his/her heirs | Tenancy in common |
| A lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market | Third Party Origination (TPO) |
| A method of expressing the cost of financing, it is the difference between the loan amount and the sum of the payments made over time | Time-price differential |
| A document that gives evidence of an individual's ownership of property | Deed |
| A report containing the ownership history in chronological order associated with a particular property | Abstract of title |
| Temporary title insurance until the title insurance policy is issued | Title binder |
| A policy, usually issued by a title insurance company, which insures against errors in the title search. A buyer's policy protects the home buyer and a lender's policy protects the lender | Title insurance |
| An examination of county and/or municipal records to determine the legal status of real property | Title search |
| The current rate the US Treasury is paying on securities it issues | Treasury Rate (TRate) |
| A federal law that protects consumers by requiring lenders to use uniform standards for disclosing the cost of credit and by requiring truthful advertising of credit | Truth in Lending Act (TILA) |
| The process of evaluating a loan applicant's financial information and facts about the real estate used to secure a loan to determine whether a potential loan is an acceptable risk for a lender | Underwriting |
| Real estate with free and clear title | Unencumbered property |
| The form prescribed by RESPA for federally related mortgages that details all costs associated with the mortgage | Hud1 Settlement Statement |
| A debt that has no collateral or security | Unsecured Loan |
| A legally binding agreement between a buyer and seller detailing the terms and conditions of the sale of real estate | Sales contract or purchase and sales agreement |
| The document issued by the lender when the borrower pays the mortgage loan in full | Satisfaction of mortgage (release of mortgage) |
| A mortgage recorded after, and is subordinate to, the first mortgage | Second mortgage |
| The financial market where private investors and governmentsponsored enterprises such as Fannie Mae and Freddie Mac buy and securitize mortgages | Second mortgage market |
| A loan that is secured by collateral such as property. The loan agreement contains a provision stating the lender has a claim against the property if the debt is not paid according the the terms of the agreement | Secured loan |
| The real or personal property pledged as collateral for a loan | Security |
| The process of pooling similar types of loans to create mortgage backed securities for sale in the financial markets | Securitization |
| A purchase transaction, often involving an assumable mortgage, in which the party selling the property provides all or part of the financing (owner financing) | Seller carryback |
| An individual or entity that services a loan by performing responsibilities such as sending statements to borrowers, accepting payments, issuing late payment notices, and managing escrow accounts | Servicer |
| A law enacted by a legislative body. May include a law established by an Act or the rules or regulations which are used to promulgate the law | Statute |
| A lien on property that is junior, subsequent, to another lien, or liens. In the even of foreclosure, subordinate financing does not have receive proceeds until prior liens are paid | Subordinate lien |
| Loans for borrowers who have either poor credit, and unstable income history or high debt ratios | Subprime |
| A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, it's dimensions, and the location and dimensions of any structure or easements | Survey |
| Equity created by a purchaser performing work on a property being purchased | Sweat equity |
| A type of involuntary lien placed on a property title due to a homeowner's failure to pay property taxes | Tax lien |
| A long term mortgage, usually of ten years or more, as opposed to a short loan, such as a construction loan | Permanent loan |
| Principal, Interest, Taxes and Insurance are the monthly housing expenses that a lender calculates in order to determine a borrower's housing expense ratio | PITI |
| A type of residential development or subdivision that features areas owned in common by the residents and reserved for used by some or all of the residents | Planned Unit Development (PUD) |
| Money placed in a pledged savings account, plus earned interest, is gradually used to reduce mortgage payments. | Pledged Account Mortgage (PAM) |
| A fee equal to 1% of the loan amount. (0.01 x Loan Amount= 1 point.) | Point |
| A legal document authorizing one person to act on behalf of another | Power of attorney |
| Lender's approval to make a loan based on verification of a loan applicant's income and examination of credit history | Preapproval |
| Examination of information that a loan applicant has provided. This estimate may be based on verbal non verified information | Prequalification |
| Funds collected at closing that are necessary to create an escrow account or to adjust the seller's exisiting excrow account. Can include taxes, hazard insurance, private mortgage insurance, and special assessments | Prepaid expenses |
| A payment that the borrower makes in advance of the due date | Prepayment |
| Fees charged for an early repayment of debt. | Prepayment penalty |
| Loans made to borrowers who have good credit scores, stable income histories, down payments, and low debt ratios | Prime loans |
| Retail lenders, such as banks, savings, and loan associations, credit unions, and mortgage companies, who make mortgage loans directly to qualified borrowers | Primary mortgage market |
| The amount borrowed, and the portion of each monthly payment that reduces the remaining balance of a mortgage | Principal |
| Mortgage insurance purchased from a private (nongovernmental) insurance company. Is often required by a lender when the LTV on a conventional loan exceeds 80% | Private Mortgage Insurance (PMI) |
| A legal agreement for a borrower to repay a loan | Promissory note |
| A mortgage loan obtained by a borrower for the purchase of a residential property in which the property is the collateral for the loan | Purchase money mortgage |
| Investor specific calculations used to determine if a borrower can qualify for a mortgage. They consist of two separate calculations: A housing expense ratio, and a total debt ratio (DTI) | Qualifying ratios |
| A deed that transfers ownership without any guarantees or warranties | Quitclaim deed |
| Safegaurds which limit the amount of the interest rate on an ARM may change each adjustment period or over the life of the loan | Rate cap |
| A lender's guarantee that the interest rate quotes will be good for a specific number of days | Rate lock |
| A person licensed to negotiate and transact the sale of real estate on behalf of the property owner | Real estate agent |
| A federal law that uses disclosure requirements to help consumers understand the cost of settlement services and which establishes prohibited practices to protect consumer from unearned fees | Real Estate Settlement Procedures Act (RESPA) |
| A process used by lenders to adjust mortgage payments. Usually used in the case or Option ARMS and other nontraditional mortgage products when negative amortization has occurred | Recasting |
| A clause in a deed of trust that conveys title to a borrower once the loan is paid in full | Reconveyance |
| The cancellation of a contract. With respect to mortgage refinancing, the Truth in Lending Law gives some homeowners three days after closing to exercise this right | Recission |
| Fees charged by a local recorder's office for recording a mortgage or deed of trust, thereby making it part of the public record | Recording fees |
| Obtaining a new mortgage loan on a property already owned and paying off the existing loan | Refinance |
| The regulations issued under TILA that set forth the specific requirements that a lender must follow in order to comply | Regulation Z |
| Lender makes scheduled periodic payments to the borrower using the borrower's equity in the home as the security for the loan with repayment deferred until the occurrence of certain events such as death or the selling of the home | Reverse mortgage |
| A type of credit arrangement in which a consumer is preapproved for a line of credit and they may make purchases against that credit | Revolving debt |
| A clause in a property lease giving the tenant the opportunity, before anyone else to purchase the property, in the event of a sale | Right of first refusal |
| Generally an individual or entity that makes and funds mortgages, services mortgages, and sells mortgages in the secondary market | Mortgage banker |
| An individual or entity that arranges funding or negotiates mortgage loans for a potential borrower, and charges a fee for these services | Mortgage broker |
| Is the lender called the mortgag(ee) or mortgag(er)? | Mortgagee |
| Is the borrower called the mortgag(ee) or mortgag(er)? | Mortgagor |
| An amortization method in which the monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the balance of the loan (deferred interest) | Negative amortization |
| The borrower's gross income minus the federal income tax | Net effective income |
| A statement in a mortgage contract forbidding the assumption of the mortgage without approval of the lender | Non assumption clause |
| A legal document that requires a borrower to repay a mortgage loan and which specifies the terms by which repayment will occur | Note |
| The stated interest rate on a mortgage or loan agreement | Note rate |
| The regulatory and supervisory agency for federal chartered savings institutions. Formally known as Federal Home Loan Bank Board | Office of Thrift Supervision |
| A 3 year ARM with an annual rate that can change yearly | 3/1 ARM |
| The process of taking and processing an application for a mortgage loan | Origination |
| The fee charged by a lender to make the loan | Origination fee |
| Voluntary insurance which protects a homeowner from third party rights affected on the property over the course of it's past ownership, such as mechanic's liens, and unreleased mortgages, etc. | Owner's title insurance |
| The retail interest rate a borrower may receive without paying discount points | Par rate |
| The date when a new monthly payment amount takes effect on an ARM or a GPM. Generally, occurs in the month immediately after the adjustment date | Payment change date |
| The payment of points to permanently lower the interest rate on a loan | Permanent buy down |
| Insurance that protects against the lender's loss from title defects or liens that should have been cleared up prior to the issuance of a title policy | Lender's title insurance |
| A person's financial obligations | Liabilities |
| Part of a homeowner's insurance policy that covers bodily injury or property damage occurring on the homeowner's property and that are a result of negligence | Liability insurance |
| One type of index used to determine interest rated for adjustable rate mortgages | The London Interbank Offered Rate (LIBOR) |
| A claim upon a piece of property for the payment or satisfaction of a debt or obligation | Lien |
| A sum of borrowed money (principal), generally repaid with interest | Loan |
| This person is generally an individual that arranges funding or negotiates mortgage loans for a potential borrower under the supervision of a mortgage broker, a mortgage banker or lender | Loan originator |
| This person is generally an individual that arranges funding or negotiates mortgage loans for a potential borrower. The term may also be applied generally to any individual or entity that initiates the process for obtaining a mortgage loan | Loan originator |
| The relationship between the amount of the mortgage loan and the appraised value of the property to purchase price, whichever is lower, expressed as a percentage | Loan to value ratio (LTV) |
| A single disbursement of the total amount due | Lump sum |
| A provision in a contract that requires all parties to submit a mandatory process to resolve disputes instead of seeking action in the courts | Mandatory arbitration agreement |
| The amount a lender adds to the index on an ARM to establish the fully indexed rate. Once established it remains the same for the life of the loan | Margin |
| The date on which the principal balance of a loan becomes due and payable | Maturity |
| A consumer credit report which contains information from two or more of the three credit repositories | Merged credit report |
| Insurance that indeminifies the lender against default by the borrower. This insurance is often required when the LTV exceeds 80% | Mortgage Insurance (MI) |
| The fee paid by borrowers for mortgage insurance on an FHA loan | Mortgage Insurance Premium (MIP) |
| That portion of the total monthly payment applied toward principal and interest | Monthly fixed installment |
| A legal document that pledges a property to the lender as a security for payment of a debt | Mortgage |
| A nonconforming loan that exceeds the lending limits established by Fannie Mae and Freddie Mac for conforming loans | Jumbo loan |
| A mortgage that is subordinate to the claims or lien positions of other mortgages recorded against a property. | Junior mortgage |
| The penalty a borrower must pay when a payment is made a stated number of days after the due date | Late charge |
| Alternative financing that allows low/moderate income buyers to lease a home with an option to buy. Rent payment consists of PITI payments on the first mortgage plus an extra amount that accumulates in a savings account for a down payment | Lease purchase mortgage loan |
| A form of real estate property rights When a buyer acquires property the buyer has been leasing. | Leasehold |
| An entity that makes funds available for others to borrow. Also known as the creditor | Lender |
| The interest rate of an ARM at the time of closing. This rate changes for an adjustablerate mortgage (ARM) | Initial interest rate |
| The regular periodic payment that a borrower agrees to make to a lender | Installment |
| A legal document provided to a lender by a title company, promising to abide by the closing instructions. It protects the lender from misuse of funds by the title company | Insured closing letter |
| A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance | Insured mortgage |
| The fee that is charged for borrowing money | Interest |
| The percentage rate at which interest accrues on the mortgage. In most cases, it is also the rate used to calculate the monthly payments | Interest accrual rate |
| A loan program where the borrower's payments are directed only at the interest due on the loan and not the principal. | Interest Only (IO) |
| An arrangement that allows a party to deposit money to an account. That money is then released each month to reduce the mortgagor's monthly payments during the early years of a mortgage | Interest rate buydown plan or temporary rate buydown |
| Two or more people holding equal ownership of a property and providing for the automatic transfer to the surviving tenant of the interest of the deceased tenant | Joint tenancy |
| A foreclosure process that is initiated by the lender filing a lawsuit in a court of law | Judicial foreclosure |
| An estimate of closing costs, made in compliance with TILARESPA Rule requirements, that must be given to mortgage applicants within three business days after receiving a loan application | Loan estimate |
| The period during which one party may fail to perform without being considered in default | Grace period |
| A type of flexible payment mortgage where the payments increase for a specified period of time and then level off | Graduated Payment Mortgage (GPM) |
| For qualifying purposes, the income of the borrower before taxes and expenses are deducted | Gross income |
| A promise by on party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract | Guaranty |
| A mortgage guaranteed by a third party | Guarantee mortgage |
| A form of insurances that indemnifies the insured from fire, burglary and other specified losses | Hazard insurance, homeowners insurance |
| A reverse mortgage insured by the FHA | Home Equity Conversion Mortgage (HECM) |
| A loan secured by a mortgage, establishes a credit line that can be drawn upon as needed until the borrower reaches the maximum credit amount allowed | Home Equity Line of Credit (HELOC) |
| The relationship, expressed as a percentage, between a borrower's housing expenses and their gross monthly income | Housing expenses to income ratio |
| A TILA/RESPA disclosure provided to applicant 3 business days before consummation that provides itemized listing of all costs of real estate transaction including the fees of the lender, mortgage broker, and other settlement services providers | Closing disclosure |
| That portion of a borrower's monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due | Escrows or impounds |
| A published interest rate used, when combined with a margin, as the basis upon which the note rate of ARM will adjust | Index |
| The sum of the published index plus the margin | Fully indexed rate |
| A fee paid at closing and/or with each monthly payment to insure an FHA loan | FHA Mortgage Insurance Mortgage Insurance Premium (MIP) |
| Any kind of fee or charge associated with obtaining credit and can include many items, including loan fees, miscellaneous fees, per diem interests, escrows for mortgage insurance, etc. | Finance charge |
| A promise by FHA to insure a mortgage loan for a specified property and borrower. A promise from a lender to make a mortgage loan | Firm commitment or loan commitment |
| The oldest lien against a property, or the lien with first priority | First mortgage |
| The monthly payment due on a mortgage loan, including payment of both principal and interest. | Fixed installment |
| A mortgage with an interest rate that will remain the same for the entire term of the mortgage | Fixed rate mortgage |
| The opposite of locking an interest rate. Following formal applications and identification of a loan program, a mortgage loan application may elect to wait to lock an interest rate in anticipation of interest rates falling | Float |
| Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood zones | Flood insurance |
| When a lender delays foreclosure action in order to allow a borrower to make good on overdue payments | Forbarance |
| A legal process by which the lender forces a sale of a mortgaged property because the borrower has not met the repayment terms of the mortgage | Foreclosure |
| An international misrepresentation or concealment of a fact that deceives another, causing him/her to act upon the false representation or concealment to his/her detriment | Fraud |
| Federal Home Loan Mortgage Corporation | Freddie Mac |
| A requirement to reveal all information pertinent to a transaction | Full disclosure |
| An ARM with a monthly payment that is Sufficient to Amortize the remaining balance, at the interest accrual rate, over the amortization term | Fully amortized ARM |
| In an ARM, the interest rate indicated by adding the current index value and the margin | Fully indexed rate |
| Funds provided by the lender at settlement. The act of disbursing the cash for a loan | Funding |
| Federal National Mortgage Association | Fannie Mae |
| A government sponsored enterprise created by Congress that purchases conforming mortgage loans and resells them in the secondary market | Federal Home Loan Mortgage Corporation (Freddie Mac) |
| A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders | Federal Housing Administration (FHA) |
| A government sponsored enterprise created by Congress that purchases conforming mortgage loans as well as those insured by the FHA, and resells them in the secondary market | Federal National Mortgage Association (Fannie Mae) |
| Federal agency with responsibilities that include enforcing the compliance of mortgage brokers with federal lending laws | Federal Trade Commission (FTC) |
| The most basic form of real estate property rights. Means that a buyer acquires a property that includes the land and all improvements to the land | Fee simple |
| The threshold set for fees charged on a mortgage loan expressed either as a percentage of the loan amount or a set dollar amount | Fee triggers |
| Any kind of money paid in conjunction with a mortgage loan, other than the actual loan amount and interest. Might include payments for credit reports or appraisals, or origination/broker items. Affect the total cost of credit when obtaining a loan | Fees |
| The difference between the fair market value of a property and the current balances of any liens against the property | Equity |
| An account held by the lender to which the home buyer deposits money for taxes and/or insurance payments | Escrow account or impound account |
| The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other expenses as they become due. | Escrow dispursements |
| The part of a mortgagor's monthly payment that is held by the loan services to pay for taxes, hazard insurance, mortgage insurance, and other expenses related to loan | Escrow payments |
| A contract whose terms have been completely fulfilled | Executed contract |
| Federal legislation enacted in 1970 aimed at ensuring credit related information used by lending institutions is accurate | Fair Credit Reporting Act (FCRA) |
| Federal legislation enacted in 2003 that permanently extended the provisions of FCRA | Fair and Accurate Credit Transactions Act (FACTA) |
| The state of having failed to make payments on time. This could lead to foreclosure | Delinquency |
| The federal agency responsible for housing programs in the United States. Also has regulatory authority for a number of housing related federal statutes | Department of Housing and Urban Development (HUD) |
| An independent agency of the federal government which oversees programs and services for veterans. Guarantees long-term, low or no down payment mortgages to eligible military related borrowers | Department of Veterans Affairs (VA) |
| Funds that are given in advance to show committed interest in the purchase of a property | Deposit |
| A decrease in the value of a property over time | Depreciation |
| Fee paid to a lender at closing and used to provide the borrower a lower note rate. | Discount point |
| One who gives. In mortgage lending the term refers to those who make gifts of money for use in the purchase of a home, with no expectation of reimbursement | Donor |
| Money paid towards the purchases price of a home. This amount is not financed | Down payment |
| A loan settlement in which loan funds are not made available on the same day as closing. Prohibited in many states unless the loan is subject to the right of rescission | Dry settlement |
| A provision of a mortgage or deed of trust that allows a lender to demand immediate payment of the balance of the loan if very specific criteria relating to fraud and misrepresentation are met | Due on demand clause |
| A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home | Due on sale clause |
| Money paid by a buyer to a seller at the time of entering a contract to indicate intent and ability of the buyer to carry out the contract. | Earnest Money |
| The right to use part of another person's property. A common example would be a right of way (the right of one person to access their own property by traveling through someone else's property) | Easement |
| The right of a government or municipality to acquire private property for public use, even if the property owner objects. | Eminent Domain |
| A claim against real property such as a lien, judgement, security interest, unpaid taxes, or an easement which may affect the ability to transfer ownership of the property | Encumbrance |
| The loan amount that the VA guarantees when extending a loan to a veteran | Entitlement |
| A federal law that requires lenders to make credit available without discrimination on the basis of race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs | Equal Credit Opportunity Act (ECOA) |
| Contract between a purchaser and a seller of real estate to convey title after certain conditions have been met | Contract of sale or contract for deed |
| A mortgage not insured by the FHA or guaranteed by the VA | Conventional loan |
| A provision in an ARM allowing the loan to be converted to a fixed rate at some point during the loan term | Conversion clause |
| The transfer of the title of real estate from one to another | Conveyance |
| The rate charged to banks for borrowing money from a Federal Reserve bank. Each district offices sets its own rate. The 11th District's is the rate most often used as an index for an ARM | Cost of Funds Index (COFI) |
| The promise written into deeds and other instruments agreeing to performance or non-performance of certain acts or preventing certain uses of the property | Covenant |
| A declining term life insurance policy used to insure repayment of a loan should the borrower die | Credit Life Insurance |
| A report documenting the credit history and current status of a borrower's credit standing | Credit report |
| An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit | Credit Repository or Consumer Reporting Agency (CRA) |
| A statistical summary of the information contained in a consumer's credit report. With this form of credit scoring, a numerical value is assigned to various pieces of information in the credit report, then a summary score is produced | Credit risk score |
| A person or entity to whom an obligation is owned, such as a loan | Creditor |
| The relationship, expressed as a percentage, between a borrower's monthly obligations on long-term debts and his or her gross monthly income | Debt to income ratio |
| A person who owes a debt to a creditor or lender | Debtor |
| A written instrument properly signed and delivered that conveys title to real property | Deed |
| In many states, a document used in place of a mortgage to reflect the property as security for the debt | Deed of trust |
| Failure to meet legal obligations in a contract, specifically, failure to make the monthly payments on a mortgage | Default |
| When a mortgage is written with a monthly payment that is less than what is required required to satisfy the note rate, the unpaid interest is added to the loan balance | Deferred interest |
| A reverse mortgage that provides lump sum used to repair or improve a house | Deferred payment loan |
| Past due | Delinquent |
| Other terms for caps | Ceiling & floor |
| The document that qualified military borrowers must obtain from the VA in order to apply for a VA guaranteed home loan | Certificate of eligibility |
| A statement issued by the VA showing the property's current market value based on a VA approved appraisal | Certificate of Reasonable Value (CRV) |
| A statement provided by an abstract company, title company, or attorney stating that the title of real estate legally held by the current owner | Certificate of title |
| A document available through the VA that veterans use to establish eligibility for certain FHA loans | Certifcate of veteran status |
| Personal property. Anything owned that is not real property | Chattel |
| Title that does not include liens, judgments, and other encumbrances | Clear title |
| A meeting between the buyer, seller, and lender and the closing agent where real estate funds for it's purchase legally change hands and legal documents are executed. This process also includes a single transaction such as refinance | Settlement/closing |
| Expenses over and above the price of the property incurred by the buyers and sellers when transferring ownership of a property | Closing costs |
| An outstanding claim or encumbrance on the title | Cloud on title |
| A statement of principles concerning the behavior of those who subscribe to the code | Code of ethics |
| One type of index used to determine interests rates for adjustable rate mortgages | The 11th district Cost of Funds Index (COFI) |
| Property pledged as security for a debt | Collateral |
| A comparison, expressed as a percentage, of the combined costs of all mortgages on a home and the value of the home used to secure the loans | Combined Loan to Value Ratio (CLTV) |
| The point that a borrower becomes legally obligated on a real estate transaction. Generally happens when the promissory note is executed | Consummation |
| A non-judicial determination that a property is unfit to occupy made by a municipal building or health inspector. or An exercise or eminent domain to take ownership of a private property for public use | Condemnation |
| An temporary loan used to pay for the construction of buildings or homes. This loan is characterized by interest only payments, draw payments to the builder and rising principal | Construction loan |
| A loan that meets the lending limits and other criteria established by Frannie Mae or Freddie Mac | Conforming loan |
| An organization that prepares reports used by lenders to determine an applicant's credit history | Consumer Reporting Agency (CRA) |
| Total debts as a percentage of gross monthly income or DTI | Back end ratio |
| A condition where complete real estate ownership is impaired by unsettled claims and liens | Bad title/cloud on title |
| The amount due, including principal, unpaid interest, and any fees or penalties owned | Balance |
| A mortgage with periodic payments including a final payment that is considerably larger than the preceding payments | Balloon Mortgage |
| The final lump sum paid at the maturity date of a balloon mortgage | Balloon Payment |
| The financial inability to pay one's debts when due and the debtor's application to the courts for relief through the restructuring or erasing of the debt | Bankruptcy |
| One 100th of 1% of the loan amount (0.0001 x Loan Amount = 1) | Basis Point |
| The person who receives or is to receive the benefits from a specific action or act | Beneficiary |
| A plan to reduce the debt every two weeks instead of making monthly payments. The result is that the equivalent of the one additional monthly payments is made each year | Biweekly Payment Mortgage |
| A mortgage that uses at least two pieces of real estate for security | Blanket Mortgage |
| In food faith, without fraud | Bona Fide |
| In a real estate transaction the borrower signs the security instrument generally, a mortgage or deed of trust and is referred to as: | Mortgagor (Mortgage) or Trustor (Deed of Trust) |
| Credits at closing that are subtracted from the final closing costs. These might include fees or points paid by the seller, lender credits paid by the lender or fees paid by the borrowers prior to closing, such as appraisal fee | Borrower's Credits |
| A short-term loan collateralized by the borrower's present home and used to close on a new house before the present home is sold | Bridge Loan |
| Consumer protections which limit the amount the interest rate or payment on a ARM may change | Caps (for ARMS) |
| A limit on the amount that the interest rate can change during any adjustment periods | Periodic Rate Cap |
| A limit on the amount that interests rate can change over the life of an ARM | Lifetime Rate Cap or Rate Ceiling |
| A limit on the amount that the payment can change during one adjustment period on an ARM. Payment caps can result in negative amortization | Payment Cap |
| A limit on the amount that the interest rate can increase during the first adjustment period for ARM | Initial Rate Cap |
| The amount of cash derived from an income-producing property over a period of time | Cash Flow |
| A table that shows the portion of each payment that will be applied to interest and principal, and the balance remaining after the payment has been applied | Amortization schedule |
| The length of time required to amortize the mortgage loan, expressed as a number of months | Amortization Term |
| A uniform measurement of the cost of a loan, including interest and financed costs of closing, expressed as a yearly percentage rate | Annual Percentage Rate (APR) |
| Payments made at specified intervals, such as with insurance contracts or certain types of investments | Annuity |
| The method by which a consumer formally applies to obtain a mortgage loan. The form is the Uniform Residential Loan Application (URLA) or: | The Fannie Mae Form 1003 (pronounced 10 0 3) |
| Fee charged by a mortgage broker for processing a mortgage loan application. Might be a flat fee or a percentage of the loan amount | Application Fee |
| An estimate of the fair market value of a real or personal property | Appraisal |
| An opinion of a property's fair market value based on a appraiser's knowledge, experience, and an analysis of the property utilizing recent comparable sales and market conditions | Appraised Value |
| One qualified through state licensing procedures to estimate the value of real property | Appraiser |
| The increase in the value of a property that has occurred over time | Appreciation |
| A transaction among parties, each of whom acts in his or her best interest | Arms Length Transaction |
| A local tax levied against a property for a specific purpose, such as a sewer or street lights | Assessment |
| Things that a person owns, that can be converted to cash such as property, investments, savings, etc. | Asset |
| The transfer of the rights and obligations under a mortgage from one person to another | Assignment |
| A provision in a mortgage that allows transfer of the mortgage from one party to another | Assumability Clause |
| A mortgage that a seller can transfer to a new buyer, with the buyer taking over the payments on the seller's existing mortgage. Lenders may require a credit review of the new borrower and payment of a fee | Assumable mortgage (includes FHA &VA loans) |
| The fee paid to a lender (usually by the purchaser of real property) when an assumption takes place | Assumption fee |
| To witness by observation and signature | Attest |
| A written statement by an attorney made after examining public records and/or abstracts of title that, in his or her judgement, the title to a particular property is free of unsettled claims and liens | Attorney's opinion of title |
| A term used in FHA loans meaning the total cost to close the loan | Acquisition cost |
| An unpreventable destructive occurrence of the natural world | Act of God |
| An addition or supplement to a contract | Addendum |
| A mortgage in which the interest rate is adjusted periodically based on changes in the index | Adjustable Rate Mortgage (ARM) |
| The cost of a property plus the value of any capital expenditures for improvements to the property, minus any depreciation taken | Adjusted basis |
| The date that the interest rate may change on a ARM | Adjustment date |
| The period elapsing between adjustment dates for an ARM. The interval can apply to interest or payment adjustments and is typically one, three, or five years | Adjustment period/change frequency |
| The total dollar value added or subtracted from the sale price of a comparable property used to provide and indication of value of the subject property | Gross adjustments |
| A partial disbursement of funds under a note, usually made as part of a construction loan or a reverse mortgage | Advance |
| A legal relationship created by law or contract in which the agent performs certain acts on behalf of the principal | Agency |
| Periodic payments on a loan requiring payment of enough principal and interest to ensure complete repayment of the loan by the end of the loan term | Amortization |
| The voluntary surrender of property, owned or leased | Abandonment |
| A reduction in amount or intensity. Usually related to a decrease in taxes or to a decrease in continuing payments such as rent | Abatement |
| A title that is clear of any liens, judgement, or other encumbrances | Absolute title |
| Making current an existing title abstract | Abstract update |
| A clause in a mortgage or deed of trust that allows the lender to demand the immediate repayment of the balance of a loan under conditions such as default by the borrower | Acceleration clause |
| A declaration by a person who has signed a document that such signature is a voluntary act, made before a duly authorized person | Acknowledgement |
| The period between rate changes in an ARM is called the: | Adjustment period |
| For a $300,000, 3/1 ARM with a rate of 6.5%, what would the per diem interest be based on a 360-day year? | $54.17 |
| An applicant for a real estate loan cannot be asked about their: liabilities, income, religion, or ethnicity? | Religion |
| A lender can be protected from loss by encumbrances or a defective title through: PMI, title insurance, errors and omissions insurance, or liability insurance? | Title insurance |
| The acronym PFC stands for: | Prepaid finance charges |
| Truth in Lending provides for a right to rescind certain loans secured by a principal residence. The rescission period is: 30 days, 72 hours, 24 hours, or 3 business days? | 3 business days |
| A woman may be denied credit on the basis of any of the following EXCEPT: 1) lacks sufficient funds for necessary down payment, 2) has a hearing loss and a number of late payments > 90 days, 3) her pregnancy is an indication she may stop working | Her current pregnancy is an indication that she may stop working once the baby is born |
| When is the appraisal disclosure required to be delivered? | When a complete application is taken |
| Without a waiver, an applicant for a conforming loan must be given a copy of an appraisal report withing how many days of closing? | At least three business days prior to closing |
| The truth in lending form provides? 1) Borrowers with an idea of total closing costs and finance charges, 2) The contract interest rate the borrower will pay, or 3) The note rate the borrower is charged and when the first payment date is scheduled for | Borrowers with an idea of total closing costs and finance charges |
| An Alt-A loan is a class of: 1) adjustable rate loan, 2) reverse mortgage, 3) subprime loan or, 4) seller financing | Subprime loan |
| Using a 36% back-end ratio, an applicant for an 80% conventional loan, with a gross monthly income of $3,600 and monthly fixed debts of $400, would be eligible for a loan with monthly payments to PITI of: | $896 |
| A credit report will always display which of the following? 1) Name and Social Security number, 2) Current account balances and payments for the past five years, 3) Bankruptcy filing at any time, 4) Personal assets | Name and Social Security number |
| A basis point is: 1) one-one hundredth of 1%, 2) 1% of the loan amount, or 3) the same as a discount point | One-one hundredth of 1% |
| When a federally related or insured lender learns that a property is in a flood zone, it must: 1) cancel the loan, 2) initiate foreclosure, 3) inform the borrower, or 4) provide insurance on the property against flood loss | Inform the borrower |
| What is the MINIMUM equity required to automatically eliminate mortgage insurance? | 22% |
| The Truth in Lending Act is most closely related to: ECOA, FACTA, RESPA, HMDA, HOEPA, FCRA, or HUD? | RESPA |
| Which of the following CANNOT be used to help pay the down payment for a buyer wanting an FHA loan? 1) A gift from a non-profit organization, 2) A gift from the seller, 3) A gift from an immediate relative, or 4) A gift from the borrower's employer | A gift from the seller |
| What percentage variance on an Fannie Mae appraisal report is tolerable when dealing with comps? | 20% |
| Which law governs residential mortgage loan closings? ECOA, FACTA, RESPA, HMDA, HOEPA, FCRA, or HUD? | RESPA |
| The interest rate for an ARM will change periodically based on: 1) its index and margin, 2) the federal funds rate, 3) the length of its adjustment period, or 4) changes in its margin rate | Index and margin |
| Regulation X requires that the estimate of the charges and terms must be available for at least what period of time after the GFE is provided? | 10 business days |
| Margin is used when describing terms for an adjustable rate loan. Margin is: 1) the maximum amount the interest rate may be increased, 2) the room for error a lender has when calculating profit, or 3) the amount the lender adds to a selected index rate | The amount the lender adds to a selected index rate |
| A telemarketer can be fined how much for calling someone registered on the National Do Not Call Registry? | $16,000 |
| PMI and MIP are intended to cover whose risk? 1) Borrower's, 2) Lender's, 3) Mortgage insurer's, or 4) Closing agent's | Lender's |
| Which of the following charges have 10% tolerance? 1) Settlement services selected by a borrower who shopped for his own service provider, 2) Homeowners insurance, 3) Daily interest charges, or 4) Government recording charges | Government recording charges |
| What will cause a change in the amount of the loan payments on a fixed-rate loan? 1) A change in the discount rate, 2) A change in the index rate, 3) The annual escrow analysis, 4) The annual rate adjustment | The annual escrow analysis |
| The Truth In Lending Act requires that a borrower be given how many copies of the notice of his right to rescind? | Three |
| Interest Only has what feature? 1) Can be paid off faster than fully amortized, 2) Requires principle payment subsidy account, 3) Escrows required | Can be paid off faster than fully amortized |
| ECOA serves to: 1) prevent unnecessary foreclosures, 2) ensure the accuracy and privacy of consumer information, 3) educate professionals regarding ethical practice, 4) prevent discrimination in the mortgage lending industry | Prevent discrimination in the mortgage lending industry |
| A loan officer has marketing plan to make 2-4k/loan. He agrees to 300k loan for .75% comm &$400 processing fee for cousin. This transaction is: 1) Legal/ethical bc he's within marketing plan, 2) Legal/unethical but ok bc he's family, 3) Illegal/unethical | Legal and ethical because he is within his marketing plan |
| What agency is TILA regulated by? ECOA, FACTA, RESPA, HMDA, HOEPA, FCRA, or HUD? | HUD |
| A borrower in a mortgage transaction is called: 1) a mortgagor, 2) a mortgagee, 3) a beneficiary, 4) a lendee, 5) a lender | Mortgagor |
| Term to describe knowingly advertising or offering one set of terms which are very appealing but are not readily available and then pressuring a person into signing a contract with other, more expensive terms? 1) Bait and switch, 2) Steering, 3) Redlining | Bait and switch |
| What is the best description for a 360/180 loan? 1) Adjustable Rate Loan, 2) Interest Only Loan, 3) Balloon Loan, or 4) Option Arm Loan | Balloon Loan |
| A borrower comes to your office for a loan. The Home Mortgage Disclosure Act requires you to collect information about her race. The borrower does not with to provide information for that section of the application, what do you do? | Have the borrower check the box indicating they do not want to furnish the information, then answer it according to visual observation when she leaves |
| In order for Tara Dactile to obtain a VA loan she will most likely have to: 1) pay a funding fee, 2) make a down payment, 3) ensure that the seller of the property makes any necessary repairs, or 4) apply to the VA for the loan | Pay a funding fee |
| Borrower with good credit, low DTI, large down payment, and applies for a loan of $800k. They qualify for what type of loan? 1) Non-conforming, 2) Conforming, 3) FHA, 4) Subprime | Non-conforming |
| Which of the following is NOT a RESPA violation? 1) A mortgage lender gives an attorney a fee for introducing a customer, 2) A mortgage broker pays a real estate broker for mortgage loan referrals, 3) An employer pays its own employee for referrals | An employer pays its own employee for referrals |
| How much of a cushion is a lender allowed for tax reserves? 1) Two months, 2) Three months, 3) Six months, 4) One year | Two months |
| What was the Truth in Lending created for? 1) Allow consumers to shop rates and fees, 2) To regulate caps on interest rates, or 3) To show the cost of the loan | Allow consumers to shop rates and fees |
| Borrower is buying a house with a sales price of $200,000 and an LTV of 75%. If he paid $3000 in points, how many points does that represent? | Two |
| Each loan originator is identified in the NMLS database by: 1) employing mortgage broker, 2) social Security number, 3) a unique identifier, or 4) license number | A unique identifier |
| All of the following are considered dwellings under the Home Mortgage Disclosure Act EXCEPT: 1) a manufactured home, 2) a recreational travel trailer, 3) a condominium unit, 4) a 10-unit apartment building | A recreational travel trailer |
| In the qualification of an applicant who receives child support and alimony: 1) child support can be included as income, but not alimony, 2) child support income can be grossed up, 3) child who is 17 years old, or 4) this income cannot be considered | Child support income can be grossed up |
| What is a red flag in an owner occupied refinance loan? 1) borrower resides in a home in same neighborhood, 2) Borrower owns another home in the same neighborhood, or 3) Borrower owns 2nd home within 50 miles of home they are purchasing | Borrower resides in a home in the same neighborhood as subject property |
| How can one calculate per diem interest? 1) Loan amount or balance x annual interest rate x number of days in a year, 2) Loan amount or balance x annual interest rate / number of days in a year, 3) Loan amount or balance x annual interest rate / 12 | Loan amount or balance x annual interest rate / number of days in a year |
| What is allowed per RESPA in terms of commission splitting? 1) Referring a service provider as long as the work done is proportionate to the fee earned, 2) Illegal, or 3) Must be the same about every time | Referring a service provider as long as the work done is proportionate to the fee earned |
| The type of loan that does not require any verification of assets or income or periodic repayment is a: 1) reverse mortgage, 2) primary mortgage, 3) second mortgage, or 4) open-end credit plan | Reverse mortgage |
| The 3 day right of rescission provided by TILA and Reg Z applies to a loan: 1) for a 2nd, vacation, or nonowner-occupied home, 2) for construction of a new home, 3) a refi loan from same institution that fails to cover unpaid balance of prior loan | To refinance a loan from the same institution that fails to cover the unpaid balance of the prior loan plus closing costs |
| Interest, service charges, transaction charges, buyer's points, loan fees, and mortgage insurance are examples of what is included in the dollar amount called the: 1) finance charge, 2) lease fee, 3) available credit, or 4) rate disclosure | Finance charge |
| Which type of loan processing would include only an appraisal and a credit score? 1) No ratio, 2) No documentation, 3) Stated income stated assets, 4) Stated income documented asset | No documentation |
| Peter Seller agrees to create a sales agreement showing a $500,000 price for property that is actually being purchased for $450,000. This activity is called: 1) an undisclosed kickback, 2) contract kiting, 3) appraisal fraud, or 4) an air loan | Contract kiting |
| John Doe Mortgage Lending company refuses to make loans in a minority neighborhood. This is illegal and is called what? 1) redlining, 2) coercion, 3) blockbusting, or 4) steering | Redlining |
| What is the function of FNMA and FHLMC? 1) To buy loans from banks and other lenders, 2) To provide loans directly to borrowers, 3) To service loans originated by mortgage brokers, or 4) To serve as wholesale lenders | To buy loans from banks and other lenders |
| If a loan is fraudulent, what actions are NOT typical? 1) forcing the orignator to repay any premium earned, 2) holding the broker responsible, 3) loan becoming due and payable, or 4) increasing the borrower interest rate | Increasing the borrower interest rate |
| Under the Gramm-Leach-Bliley Act, a person is a consumer of an institution when they: 1) name the institution as trustee, 2) obtain credit from the institution for personal reasons, 3) is a consumer of another institution receiving services from this one | Obtains credit from the financial institution for personal reasons |
| Which of the following is true of an ARM? 1) Initial rate + margin = ARM rate, 2) Index rate + margin = ARM rate, 3) ARM rate + margin = index rate, or 4) Margin + cap = ARM rate | Index rate + margin = ARM rate |
| What is a convertible ARM? It allows the borrower to do what? 1) Change from an adjustable to fixed rate mortgage, 2) Change index interst rate is based on, 3) Change margin when interest rates rise, or 4) Change the rate cap when interest rates fall | Change from a adjustable rate to a fixed rate mortgage |
| If loan amounts, maturity dates, and interest rates are the same for A and B, but A is interest-only and B is fully amortized: 1) loan A will have a lower interest cost, 2) loan A will be paid off first, or 3) loan B will have higher periodic payments | Loan B will have higher periodic payments |
| The cost of a loan is shown as an annual percentage rate in the: 1) TIL Disclosure Statement, 2) the GFE, 3) the ECOA Disclosure, 4) the CHARM booklet | TIL disclosure statement |
| What is the government agency that regulates RESPA? ECOA, FACTA, RESPA, HMDA, HOEPA, FCRA, or HUD? | HUD |
| A person has how many years from the time of the occurrence of an alleged ECOA violation to file a civil suit against the creditor? | Two years |
| When a loan balance is paid down to 80% of the purchase price of the home, PMI: 1) may be cancelled upon written request of the borrower, 2) will be cancelled automatically by the lender, or 3) will be cancelled automatically by the title company | May be cancelled upon written request of the borrower |
| The federal regulation that implements the Real Estate Settlement Procedures Act is: 1) Regulation Z, 2) Regulation B, 3) Regulation X, or 4) Regulation C | Regulation X |
| When is it acceptable to discriminate? 1) Income, 2) If applicant is under 18, 3) Too old to understand terms, or 4) Never | Never |
| The last portion of the 1003 contains government monitoring data on? 1) Sex and race of applicant, 2) Sex, marital status, and race of applicant, or 3) Race, ethnicity, and gender | Race, ethnicity, and gender |
| The risk that an agent may not have his client's best interest at heart is called: 1) double indemnity, 2) catch-22, 3) principal-agent risk, or 4) client privileges | Principal-agent risk |
| The Gramm-Leach-Bliley Act requires financial institutions give consumers what time period to opt out of allowing the sharing of nonpublic personal information? 1) Seven days, 2) 30 days, 3) 90 days, or 4) No specified time, but a reasonable opportunity | No specified time, but a reasonable opportunity |
| Who orders table funding when closing in their own name? 1) broker or third party, 2) lender, 3) escrow company, or 4) borrower | Broker or third party |
| Included in the servicing of a mortgage loan are the collection and/or remittance of payments that include interest, principal and escrow items for the: 1) lender, 2) mortgagee, 3) mortgagor, or 4) all of the above | All of the above |
| What is the purpose of RESPA? 1) Regulate closing process, 2) Regulate discrimination, or 3) Regulate MLO's | Regulate closing process |
| An ARM rate adjustment will take into account which of the following: 1) Index rate, margin and cap, 2) Initial rate, margin and cap, 3) Discount rate, index rate and margin, or 4) Federal funds rate, cap and initial rate | Index rate, margin and cap |
| What pertains to qualification of a self-employed person? 1) Income is calculated by earnings in past 12 months, 2) Income derived from balance sheet of business, or 3) Incomederived from federal tax returns and P&L statement from previous 2 years | The amount of income can be derived from federal tax returns and the profit and loss statement for the previous two years |
| Which of the following would be included in an escrow or impound account? 1) Mortgage insurance premiums, 2) Flood determination fees, 3) Origination fees, or 4) Escrow waiver fees | Mortgage insurance premiums |
| To qualify for an FHA loan, a borrower without any compensating factors must meet which of the following ratios? 1) 28% housing/36% debt, 2) 31% housing/43% debt, 3) 43% debt, or 4) 36% housing/47% debt | 31% housing/43% debt |
| The ECOA prevents discrimination against which of the following? 1) Income, 2) Disabilities, 3) Credit score, or 4) Geographic location | Disabilities |
| When a mortgage broker accepts a legitimate application and documents from a buyer and submits them to two lenders to have them each fully fund the loan, this is called: 1) double dealing, 2) double funding, 3) double selling, or 4) double decking | Double selling |
| There are four categories of Qualified Mortgages. The following is not included | Permanent |
| Qualified mortgages do not include risky features. What are they? | No negative amortization, No interest only, no loan terms over 30 years and a limit on points and fees charged |
| The DTI limit for a general QM is: | 43% |
| The General QM requires that the qualifying rate for a borrower is based on the highest a rate can go within the first______ years of the loan | Five |
| A temporary QM is a QM that has a special provision allowing for enhanced underwriting for___years | Seven |
| To qualify as a temporary QM a loan would have to be deliverable to: | Fanniemae, Freddiemac, FHA, VA, USDA |
| If a lender wanted to originate a QM loan with a DTI greater than 43% it would need to meet the standards for: | Temporary QM |
| The General and Temporary are two of the QM categories, what are the other two? | Balloon and Small Creditor |
| If a consumer is successful in proving that a Lender did not meet the ATR requirements, the consumer would be entitled to: | 3 years of interest paid and attorney fees |
| The time period for a consumer to bring a case against a lender for failing to meet the ATR requirement is: | 3 years |
| The maximum points allowed with a QM is _______% for a $100,000 loan amount: | 3% |
| If a loan is a QM, what would take the loan out of Safe harbor protection? | The loan is a Higher Priced Mortgage Loan (HPML) |
| If a QM loan is not protected by Safe harbor, the consumer could: | Challenge the lender in court that the lender did not meet the ATR requirement. |
| Rebuttable presumption is: | A consumer challenges the lender, by claiming in court, the ATR requirement was not met. |
| There are 8 factors that should be considered when determining if ATR has been met. The following is not included | The value of the property securing the loan |
| There are 4 Cs, Capital, Character, Collateral and Capacity. Which is associated with the Ability to Repay rule? | Capacity |
| A Qualified mortgage loan QM, assumes that the ___________ has been met | Ability to Repay |
| One of the mains purposes of HDMA and Regulation C is to: | Identify patterns of discrimination |
| Redlining is best defined as: | Failing to lend based on geographic areas |
| Under The Home Mortgage Disclosure act, if information regarding the borrowers' ethnicity, race, and sex is not provided by the applicant and the application is submitted in person, the lender is required to: | Provide the information based on visual observation |
| What does HMDA stand for? | Home Mortgage Disclosure Act |
| How many days does a lender have to disclose the reason for a denial? | Thirty Days |
| The Red Flag program was created for what purpose? | Help prevent identity theft |
| What does FCRA stand for? | Fair Credit Reporting Act |
| What is the primary purpose of FCRA? | To ensure accuracy and fairness of credit reporting. |
| How many years does a consumer have to take civil action against a creditor suspected of violating the Equal Credit Opportunity Act (ECOA)? | Two |
| If a borrower is denied a loan request due to the credit score not meeting lender's guideline, what disclosure is required? | Adverse action notice |
| Once a loan application is complete according to ECOA, a credit decision must be made within: | 30 days |
| Under ECOA, how long must one keep mortgage records? | 25 Months |
| Under ECOA, what information must be sent to a borrower, in writing, who has been denied? | Name, and address of lender and federal agencies who ensure compliance. |
| What entity provides guidelines and rules for ECOA? | CFPB |
| Name two protection characteristics covered by ECOA but are not covered by the Fair Housing Act? | Age and marital status |
| Name a protected characteristic covered under the Fair Housing Act but not under ECOA | Handicap |
| What is the primary purpose of ECOA? | To ensure applicants have equal access to credit |
| When can you ask about religion under ECOA? | Never, under no circumstances |
| When can you discriminate based on age? | When the person is too young to sign contracts |
| Can a lender consider immigration status when making a loan? | Yes |
| According to ECOA, one must retain proof of compliance for how long? | 25 months for residential mortgage loans |
| Entities making residential mortgage loans must maintain records or other data relating to those loans for a period of no less than ________, in order to prove compliance with ________ | 25 months, ECOA |
| ECOA protects borrowers based on: | Physical characteristics |
| What law allows a borrower to rescind a refinance, or secondary financing, within 3 business days of closing on an owner occupied home? | Truth In Lending Act (TILA) |
| owner occupied home? | Truth In Lending Act (TILA) |
| What law requires all individuals on title on a refinance transaction to receive the notice of the right to rescind, and allows any one of those individuals to cancel, if it is cancelled by midnight of the third business day? | Truth In Lending Act (TILA) |
| the font of the APR to be as large as the advertised rate? | Truth In Lending Act (TILA) |
| What law defines the annual percentage rate, as the rate that reflects the cost of the financing, on a closed end loan transaction? | Truth In Lending Act (TILA) |
| What law defines a Home Equity Line of Credit (HELOC), as an openend loan (revolving), secured by the equity in residential real estate? | Truth In Lending Act (TILA) |
| What law defines the closing of a residential mortgage loan as settlement? | Real Estate Settlement Procedures Act (RESPA) |
| What law defines the closing of a residential mortgage loan as consummation? | Truth In Lending Act (TILA) |
| Limiting lending for personal, family and household reasons to consumers is required under which law? | Truth In Lending Act (TILA) |
| What law requires the lender to provide an affiliated business arrangement disclosure, no later than at the time of disclosure? | Real Estate Settlement Procedures Act (RESPA) |
| What law, related to the cost of financing, is referred to as two interchangeable titles? | Truth In Lending Act (TILA), Regulation Z |
| What laws determine that a business day is any day the creditor's office is open for business? | Real Estate Settlement procedures Act (RESPA) and the Truth In Lending Act (TILA) |
| A business day in reference to the right to rescind is any day other than Sundays and legal public holidays. What law is associated with this definition? | Truth In Lending Act (TILA) |
| What law requires record keeping for 5 years? | Real Estate Settlement Procedures Act (RESPA) |
| The penalty of $10,000 and/or 1 year in prison is associated with violations of: | Real Estate Settlement Procedures Act (RESPA) |
| A violation of the law that provides for a civil penalty equal to 3 times the amount of the service charged is section 8 of: | Real Estate Settlement Procedures Act (RESPA) |
| The law that prohibits a loan servicer from charging a late fee within 60 days of receiving a transferred loan is: | Real Estate Settlement Procedures Act (RESPA) |
| The law that prohibits a loan servicer from reporting a negative rating to the credit bureau within 60 days of receiving a transferred loan is: | Real Estate Settlement Procedures Act (RESPA) |
| Regulations controlling servicing disclosures is section 6 of: | Real Estate Settlement Procedures Act (RESPA) |
| Regulations controlling escrow and impound accounts is section 10 of: | Real Estate Settlement Procedures Act (RESPA) |
| Prohibiting kickbacks and excessive fees to be charged on a federally related mortgage loan is Section 8 of: | Real Estate Settlement Procedures Act (RESPA) |
| The law that prohibits the payment for referral services between settlement service providers is: | Real Estate Settlement Procedures Act (RESPA) |
| The Closing Disclosure is an accounting of the actual costs associated with a loan transaction. What regulation requires this disclosure? | TILA/RESPA Integrated Disclosure Rule (TRID) |
| The law that requires an annual escrow disclosure to be provided if there are escrows or impounds is: | Real Estate Settlement Procedures Act (RESPA) |
| An overage in an escrow account of more than $50 must be refunded within 30 days of determination. What is the law associated with this requirement? | Real Estate Settlement Procedures Act (RESPA) |
| Our origination fee, on the Loan Estimate, is a zero tolerance item. This regulation is determined by: | TILARESPA Integrated Disclosure Rule (TRID) |
| The loan origination fee includes fees received and retained by the lender or broker. What regulation requires this action? | Real Estate Settlement Procedures Act (RESPA) |
| If a borrower wants to lower their interest rate, the lender will charge a discount fee which is a percentage of the loan amount. What law requires this regulation? | Real Estate Settlement Procedures Act (RESPA) |
| What regulation allows third party fees disclosed on the Loan Estimate to carry a 10% tolerance? | TILARESPA Integrated Disclosure Rule (TRID) |
| The law that requires a loan servicer to notify the borrower 15 days before transferring the loan is: | Real Estate Settlement Procedures Act (RESPA) |
| The law that requires the loan servicer who is receiving a transferred loan to notify the borrower within 15 days of receiving the loan is: | Real Estate Settlement Procedures Act (RESPA) |
| Title 1 of the Consumer Credit Protection Act is: | Truth In Lending Act (TILA), Regulation Z |
| Regulation X implements: | Real Estate Settlement Procedures Act (RESPA) |
| The law that establishes the rules for disclosing the cost of services is: | Real Estate Settlement Procedures Act (RESPA) |
| The law that requires affiliated business relationships that include ownership greater than 1% to be disclosed to the borrower is: | Real Estate Settlement Procedures Act (RESPA) |
| The law that requires creditors to disclose associate, non arms length relationships in the loan process to the borrower is: | Real Estate Settlement Procedures Act (RESPA) |
| The law that requires that a registry, known as the Nationwide Mortgage Licensing System and Registry (NMLSR), to exist and track MLOs is: | The Secure and Fair Enforcement Act (SAFE ACT) |
| The law that created the Consumer Financial Protection Bureau is: | Dodd Frank Act |
| Regulation H, under the Consumer Financial Protection Bureau implements: | The Secure and Fair Enforcement Act (SAFE ACT) |
| The law that requires all mortgage loan originators to be registered and for people who work for a nondepository institution to also be licensed is: | The Secure and Fair Enforcement Act (SAFE ACT) |
| The law that requires a borrower to escrow for flood insurance if they escrow for taxes and insurance is: | National Flood Insurance program |
| The law that requires states to ensure that individuals who originate loans are registered and/or licensed with a unique identifier number is: | The Secure and Fair Enforcement Act (SAFE ACT) |
| What law limits the collection of fees, to the credit report fee only, before the early disclosures are provided? | Mortgage Disclosure Improvement Act (MDIA) |
| The law that limits the closing of a transaction to a minimum of 7 days after the early disclosures have been delivered to the borrower is: | Mortgage Disclosure Improvement Act (MDIA) |
| The law that requires a borrower to carry flood insurance if the structure is located in a special flood hazard area is: | National Flood Insurance program |
| The law that is associated with the 373 rule relating to mortgage disclosures and timing is: | Mortgage Disclosure Improvement Act (MDIA) |
| The law that regulates activities related to residential mortgage loan modifications is: | Mortgage Assistance Relief Services (MARS) |
| The law that bans advance fees on loan modification services before the lender has approved the loan modification is: | Mortgage Assistance Relief Services (MARS) |
| The law that defines encouraging default, relating to a loan modification, when a consumer is encouraged not to make a scheduled payment is: | Mortgage Assistance Relief Services (MARS) |
| The law that determines that a good payment history is, no 60 day late payments in the past 24 months, no 30 day late payments in the past 12 months, and the borrower is current at the time of PMI cancellation, is: | Homeowners Protection Act (HPA) |
| The law that requires lenders to automatically terminate private mortgage insurance (PMI) when the loan reaches 78% of the original value and there has been a good payment history is: | Homeowners Protection Act (HPA) |
| The law that allows for private mortgage insurance to be terminated if a borrower can prove a 20% or better equity position with a good payment history is: | Homeowners Protection Act (HPA) |
| When the APR of a residential loan exceeds the APOR by 1.5% or more for a first lien, the loan is considered a: | Higher Priced Mortgage Loan, (HPML) |
| When a residential loan exceeds the APOR by more than 3.5% APR for a second lien loan, it is considered a: | Higher Priced Mortgage Loan (HPML) |
| The law that identifies a loan as high cost if the points and fees exceed 5% is: | Home Ownership Equity Protection Act (HOEPA) |
| The law that identifies a loan as high cost, if it exceeds the average prime offer rate by more than 6.5% for a first lien loan over $50,000, is: | Home Ownership Equity Protection Act (HOEPA) |
| What law requires mortgage origination companies to identify a borrower’s race, ethnicity, sex, and income? | Home Mortgage Disclosure Act (HMDA) |
| What law establishes thresholds, that if exceeded, would require the creditor to meet the requirements of section 32 of Regulation Z— high cost loans? | Home Ownership Equity Protection Act (HOEPA) |
| What laws use the average prime offer rate (APOR) as a threshold? | Home Ownership Equity Protection Act (HOEPA) and the Higher Priced Mortgage Loan Act (HPML) |
| What law requires depository institutions that have more than $43 million in assets to report their loan application records annually? | Home Mortgage Disclosure Act (HMDA) |
| Regulation C implements what law? | Home Mortgage Disclosure Act (HMDA) |
| Regulation B implements what law? | Equal Credit Opportunity Act (ECOA) |
| Regulation V implements what law? | Fair Credit Reporting Act (FCRA) |
| Regulation P implements what law? | Graham, Leach, Bliley Act (GLBA) |
| The SafeGuard Rule requires a company to have a written program to keep a client's records safe. This rule is required by? | The Federal Trade Commission (FTC) |
| What law addresses patterns of discrimination? | Home Mortgage Disclosure Act (HMDA) |
| What law requires nondepository mortgage companies, who close more than 100 owner occupied home loans annually, to report their application records annually? | Home Mortgage Disclosure Act (HMDA) |
| The law that addresses financial privacy is: | Graham, Leach, Bliley Act (GLBA) |
| The law that allows a consumer to opt out of having their information shared with certain third parties is? | Graham, Leach, Bliley Act (GLBA) |
| What law is related to whether or not a consumer failed to opt out of having their private, nonpublic information shared? | Graham, Leach, Bliley Act (GLBA) |
| The law that will result in a fine of $16,000 to a mortgage broker for contacting a customer on the "Do Not Call List" 2 years after closing is: | The Telemarketing Sales Rule |
| If a borrower disclosed that he was going to commit some fraudulent or illegal act, the MLO would be required to report the information under the requirements of: | The Financial Crimes Enforcement Network (FINCEN) |
| The regulation that requires Suspicious Activity Reports (SARS) to be reported to the company designated compliance person is: | The Financial Crimes Enforcement Network (FINCEN) |
| If a person was being prosecuted for discrimination against a handicapped person in a housing situation, they would be subject to which law? | The Fair Housing Act (FH ACT) |
| The law that determines that a heroin addict is not a handicapped person is: | The Fair Housing Act (FH ACT) |
| The Red Flag Identity theft program includes 26 red flag items created by: | The Federal Trade Commission (FTC) |
| What law is blockbusting associated with? | The Fair Housing Act (FH ACT) |
| What law is redlining associated with? | The Fair Housing Act (FH ACT) |
| What law is steering, in relation to housing, associated with? | The Fair Housing Act (FH ACT) |
| What law amended FCRA in 2003? | The Fair and Accurate Credit Transaction Act (FACTA) |
| The law that addresses identity theft is: | The Fair and Accurate Credit Transaction Act (FACTA) |
| The law that requires Consumer Reporting Agencies to put a fraud alert on a client's file for 90 days based on a phone call is: | The Fair and Accurate Credit Transaction Act (FACTA) |
| The law that requires Consumer Reporting Agencies to put a fraud alert on a clients file for 7 years if a police report has been filed is: | The Fair and Accurate Credit Transaction Act (FACTA) |
| The FTC created the Red Flag Identity Theft Program for companies to implement. What law is associated with this program? | The Fair and Accurate Credit Transaction Act (FACTA) |
| The law that permanently extended the provisions of FCRA is: | The Fair and Accurate Credit Transaction Act (FACTA) |
| Which law limits the reporting of bankruptcy filings for 10 years? | Fair Credit Reporting Act (FCRA) |
| The law that limits derogatory credit except bankruptcy for 7 years is: | Fair Credit Reporting Act (FCRA) |
| The law that requires a CRA to investigate customer disputed credit reporting items within 30 days is: | Fair Credit Reporting Act (FCRA) |
| The law that regulates how Consumer Reporting Agencies collect and share consumer information is: | Fair Credit Reporting Act (FCRA) |
| The law that requires a lender to provide a notice that a borrower has a right to receive a copy of an appraisal is: | Equal Credit Opportunity Act (ECOA) |
| The law that requires records to be retained for 25 months is: | Equal Credit Opportunity Act (ECOA) |
| The law that requires an adverse summary notice within 30 days is: | Equal Credit Opportunity Act (ECOA) |
| What law addresses discrimination against a child under the age of 18 who is living with his/her parents? | The Fair Housing Act (FH ACT) |
| If a person discriminates against someone based on marital status, they would be violating: | Equal Credit Opportunity Act (ECOA) |
| What law addresses discrimination based on age? | Equal Credit Opportunity Act (ECOA) |
| The regulation that allows consumers to list their numbers on a list, permanently, that prohibits marketers from calling is: | The Do Not Call Improvement Act |
| What law requires you to report cash transactions that exceed $10,000? | Bank Secrecy Act |
| The law that allows consumers to register their telephone number so marketers do not call is: | Telemarketing Sales Rule |
| The law that preempted states' rights to limit lending to fixed rate products only is: | Alternative Mortgage Transaction Parity Act (AMPTA) |
| What law deals with the deregulation of interest rates? | Depository Institutions Deregulation and Monetary Control Act (DIDMCA) |
| What is the mortgage insurance associated with conventional loans to protect the lender against a borrower's default? | Private Mortgage Insurance (PMI) |
| What is it called when a loan is sold and the seller agrees to buy back the loan, when certain conditions exist? | Recourse |
| What is it called when a borrower puts up the security interest in a home as security for a new loan replacing the existing loan? | Refinance |
| What is it called when the subordinate lien holder remains in a subordinate position when the first lien is eplaced? | Subordination |
| What is a process where the rate is guaranteed for a period of time? | Rate Lock |
| What funds are verified to have been in the bank for a period of not less than 60 consecutive days? | Seasoned Funds |
| What is an interest rate buy down for a temporary period of time? | Temporary Interest Rate Buy down |
| What process determines if the borrower has met all the lender conditions required to issue a final commitment and fund the loan? | Underwriting |
| What is the difference between the assets owned and any liabilities owed? | Net Worth |
| Taking and signing an application, negotiating terms and rates and the collecting of documentation for a mortgage loan is? | Origination |
| What is the fee earned for originating a loan? | Origination Fee |
| What is the base rate for a loan? | Par Rate |
| What is the component of a mortgage payment including principal, interest, taxes, and insurance? | PITI |
| What is a type of ownership where individuals actually own the building or unit they reside in, but shared areas are owned jointly with the other members of the development or established association? | Planned Unit Development (PUD) |
| What is a refinance transaction where the borrower can receive cash back of $2,000 or 2% of the loan amount, whichever is less? | Limited Cashout Refinance |
| What is the lender's profit which is added to the index to determine the rate which is referred to as the par rate or the fully indexed rate? | Margin |
| What is an instrument that allows a voluntary lien on real property once recorded? | Mortgage |
| What is an asset backed security that represents a claim on the cash flows from mortgage loans through a process known as securitization? | Mortgage Backed Security (MBS) |
| What is a form of insurance that protects the lender in the event of a borrower's default? | Mortgage Insurance |
| What is it called when the full interest expense of a payment is not met and the interest is deferred, effectively increasing the amount owed? | Negative Amortization |
| What is the cost of borrowing money? | Interest |
| What is it called when principal and interest payments are due and just the interest is paid? | Interest Only |
| What is the rate applied to the cost of borrowing money? | Interest Rate |
| What is the loan amount as a percentage of the purchase price or appraised value, whichever is lower, called? | Loan to Value (LTV) |
| What is one of the indices used in the residential mortgage industry for adjustable rate mortgages called? | London Interbank Offer Rate (LIBOR) |
| What is the highest the rate can increase above the initial fully indexed rate based on the margin and index? | Life of Loan Cap |
| What is a mortgage where the interest rate remains the same for the life of the loan? | Fixed Rate Mortgage |
| What is a method by the lender to accelerate the due date of the loan balance based on a borrowers default on the loan? | Foreclosure |
| What is an interest rate based on the index and the margin? | Fully Indexed Rate |
| What is the monthly income before deductions? | Gross Monthly Income |
| What is a market instrument that varies with market conditions? | Index |
| What is one of the indices used in the residential mortgage industry for adjustable rate mortgages? | 11th District COFI |
| What is the fee which is a percentage of the loan amount that is used to buy down the mortgage interest rate? | Discount or Discount Points |
| What is a deposit used in a real estate purchase agreement? | Earnest Money Deposit |
| What is the difference between the market value of a property and the amount of outstanding debt against the property? | Equity |
| What is a third party agent that receives, holds, and/or disburses certain funds or documents upon the performance of certain conditions? | Escrow agent |
| What is a trust account that is established to hold funds allocated for the payment of real estate taxes, hazard, insurance premiums, etc., as they are received each month and until such time as they are disbursed to pay the related bills? | Escrow Account |
| What is a mortgage that has priority over all other liens? | A First Mortgage |
| What are the costs associated with closing a mortgage loan transaction? | Closing Costs |
| What is a noncash accounting expense reducing the value of an asset? | Depreciation |
| What is the difference between the market value of a property and the total outstanding obligations? | Combined Loan to Value (CLTV) |
| What is an index used in adjustable rate mortgages? | Cost of funds index (COFI) |
| What is failing to meet the monthly interest expense and deferring the outstanding amount to a future date called? | Deferred interest |
| What is the Fannie Mae electronic underwriting vehicle? | Desktop Underwriter (DU) |
| What is the true cost of financing? | Annual Percentage Rate (APR) |
| What is the calculation or formula a lender uses that outlines the required payments, which includes the monthly principal and interest required extinguishing a debt over a predetermined period? | Amortization |
| What items of value are owned by an individual? | Assets |
| What is the unit which equals 1/100 of 1%? | A Basis Point |
| What is a fee, referred to as a discount fee or discount points, that is paid to a lender to receive a rate below the lender's base rate or par rate? | Buy down |
| What is the percentage limitation on how high or low an adjustable rate may increase or decrease? | Cap |
| The real estate appraisal approach that is considers the replacement value of the property is the? | Cost Approach |
| This term defines the method in which a lien is removed from the property when payment is made in full? | Reconveyance |
| This specifically refers to a loan that is not obtained through a direct program of the federal government? | Conventional loan |
| The type of schedule that would address the principal and interest payments due on a loan? | Amortization schedule |
| What would best help an appraiser determine a home value using the sales comparison approach? | Recent sales similar to, and in close proximity to, the subject |
| This would not be found on a credit report? | Payments made to creditors who do not send data to the national consumer reporting agencies |
| The type of disclosure must have a statement that the payment or loan terms can change? | Adjustable Rate Mortgage Disclosure |
| These would be associated with an impound or escrow account? | Taxes and insurance |
| Who gets a right to rescind notice when 2 borrowers are on the loan and both will owneroccupy the property? | Both borrowers: Each get 2 copies of the right to rescind and 1 disclosure |
| The third part entity that is responsible for the execution of the documents at consummation is the: | Closing Agent |
| Why are FHA loans beneficial to lenders? | They are insured by the federal government |
| What three items best describe what a lender/underwriter should consider when making a credit decision? | Credit, capacity, and Collateral |
| What type of loan has an interest rate that can adjust monthly and offer a borrower a number of payment options, such as a 30 year fized payment, 15 year fixed payment, interest only and a minimum monthly payment? | Option ARM |
| When a borrower reaches 62 years of age and has significant equity in their home, which of the following mortgage programs would best assist that person if with additional living expenses, access to funds for home repair or other needs? | Reverse mortgage |
| When can a mortgage be assumed by a new buyer? | When noted in the mortgage contract |
| Where would the reset period for an ARM be shown? | Note, TILA disclosure, loan estimate and the closing disclosure |
| What appraisal approach is most commonly used to determine the value of an owner occupied property in an established neighborhood? | Sales Comparison Approach |
| Describes an FHA loan? | A loan that is insured by an agency of the federal government |
| What form number represents the Request for a Copy of the Tax transcripts? | 4506T |
| An example of a mortgage loan that does not fully amortize due to the repayment terms of the loan? | Balloon mortgages |
| Defines a loan that exceeds the loan limits of Fannie Mae and Freddie Mac? | Non Conforming |
| Another term for a junior lien? | Subordinate Lien |
| This is defined as the cost of credit expressed as dollar amount? | Finance Charge |
| What is the result of a biweekly payment payment plan of a mortgage? | Borrower makes one extra monthly payment each year |
| A loan program that requires the borrower to pay taxes and insurance only and the borrower receives payments instead of making payments is a: | Reverse Mortgage |
| A loan that might be used to finance a loan amount that is in excess of the GSE's loan limits? | Jumbo loan or non conforming loan |
| A loan that would most likely have an extended lock? | Construction |
| What is the minimum cash investment on an FHA purchase loan? | 3.5% |
| What is the minimum term allowed for a balloon mortgage? | 5 |
| What is the primary purpose of Fannie Mae? | Provide mortgage market liquidity |
| When is the term when title changes owners? | Conveyance |
| What is used to determine the interest rate change on an ARM? | Margin plus index. Rate limited by the caps after fixed period has ended |
| What is used to determine the value of a home when doing a VA loan? | Certificate of Reasonable Value |
| What score do you need to pass the SAFE test? | 75% |
| What entity insures FHA loans? | Federal Housing Administration |
| Name the liability factor lenders use in order to determine if a borrower will be financially able to meet the demands of a loan repayment | Existing debt or debt to income (DTI) |
| What is a Conventional loan? | A loan NOT insured by the government and is in first position |
| What is a jumbo loan? | A loan that exceeds the maximum loan limits backed by FNMA and FHLMC (loans in excess of $417,000) |
| What is a short sale? | When the lender agrees to accept a reduced sales price because the borrower owes more than the value of the home |
| What is FNMA's primary purpose in the secondary market? | Provide a source of funds for lenders |
| What is one of the many roles of the Federal Housing Administration? | Insures loans |
| What is the 2015 standard conforming loan limit for a singlefamily property? | $417,000 |
| What is the basic entitlement amount for a veteran? | $36,000.00 |
| What is the standard definition of a "business day" for Truth in Lending required disclosures? | When most creditor's functions are open for for business |
| What is the up front guarantee fee on a USDA loan? | 2.75% |
| What does POC mean? | Paid Outside of Closing |
| What does the acronym USDA mean? | United States Department of Agriculture |
| What does the Federal Housing Administration (FHA) do? | Insure mortgages |
| What does the VA do for a loan? | Guarantee |
| What does title insurance cover or protect against? | Any unpaid liens or claims against the property prior to the borrower closing on the purchase transaction |
| What are the differences between Freddie, Fannie, and GNMA? | Freddie and Fannie are GSEs and GNMA is not |
| What are the only fees, related to the property, will a senior citizen be required to pay when they have a HECM loan? | Taxes and Insurance only |
| What are the words behind the acronym APR? | Annual Percentage Rate |
| What best defines an easement? | A right to use someone else's property |
| What best describes discount points paid on a mortgage loan? | Permanently buys down rate and is a fee which is a percentage of the loan amount |
| What best describes the COFI index? | Cost of funds index |
| USDA loans are primarily for properties located in: | Rural areas |
| USDA, FHA, and VA are all guaranteed by which of the following? | Ginnie Mae |
| VA loans require mortgage insurance which is? | An upfront VA Funding Fee |
| This loan product is typically for borrowers of 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: | Reverse Mortgage |
| On the 1003, what information is asked for government monitoring purposes? | Race and sex |
| Once a loan is closed, the borrower must occupy within: | 60 days |
| Which loan program has a mandatory UFMIP? | FHA |
| Sales price is $292k, buyer is putting down 20%, and seller is paying 4% for the buyer's closing costs. How much is the seller paying for the buyer's costs? | $11,680 |
| SRP is: | Service release premium |
| The 4 Cs: Character, Capacity, Credit, and Collateral. What is capacity? | The ability to make the monthly payment |
| The acronym PFC stands for: | Prepaid Finance Charge |
| The Cost of Funds Index is traditionally used to determine interest rates on what type of loans? | Rate adjustment on adjustable rate programs |
| The definition of a conventional mortgage is: | A loan that is in first position not insured by an agency of the federal government |
| A construction loan consists of the following? | Interest only, rising principal, draw payments and is a temporary loan |
| The term "30 basis points" expressed as percentage is? | .30% |
| If you see a product on a rate sheet referred to as a 30/15 and 180/360, what type of loan does that represent? | Balloon Mortgage |
| In a biweekly mortgage payment plan, how many extra monthly mortgage payments are made every year? | 1 |
| In order for a mortgage to be valid and enforceable, it: | Is signed by the borrower called the mortgagor |
| The VA mortgage insurance includes what type of fee? | Funding fee |
| Mortgage backed securities are a product of which marketplace? | Secondary Market |
| If a mortgage is placed on a property that already has a first lien, that second mortgage is considered to be ______ to the first: | Junior |
| If a servicer receives a "qualified written request" from a borrower for info about borrower's account, servicer must research and come to a decision as to whether there is indeed an error within how many business days after receiving the request? | 30 business days |
| If the borrower has less than a ____ down payment,and the loan to value is greater than 80%, mortgage ________ would be required on a conventional loan? | 20%, insurance |
| When would the closing disclosure be required to be redisclosed and a new three day waiting period is required? | The APR increases by .125% or more for a regular loan |
| How much is 7 months of interest for a $200k loan at 5% interest? | $5,833 |
| How often must a lender update his Do Not Call Registry database? | Every 31 days |
| How soon must a borrower occupy the home on a primary residence? | 60 days |
| If a borrower is purchasing a home with a FHA loan and the home requires Flood Insurance, how long is the rescission period after closing? | 0 days |
| If a borrower received $1,200 in rent each month on a duplex that is being purchased as an investment property, what percentage is the vacancy factor? | 25% |
| If a borrower has 2/1 buy down loan the 2 means: | The not rate is reduced by 2 percent on the first year of the loan |
| If a borrower takes a 2/1 buy down with a start rate of 4.5, what is his rate during the second year? | 5.5 percent |
| FNMA and FHLMC securitize what types of loans? | Conventional loans |
| For a veteran who qualifies for a VA loan, the amount the Veterans Administration will guarantee is called: | Entitlement |
| For which of the following reasons would it be permissible to refuse to take an application from a potential borrower? | The borrower has alluded to the fact that he/she is submitting false documents in order to qualify for a lager loan |
| Generally, which is the easiest type of loan to assume? | VA loans |
| How many days does a seller have to wait to sell a home for profit if the new homebuyer is using a FNMA loan product? | Right away, 0 days |
| Courtney would like to purchase a home from Chuck. She is unable to obtain conventional financing. Chuck decided to sell her the property, but will retain title until the purchase price is paid in full. What type of agreement have they executed? | Contract for deed |
| Describe what is the "Cost Approach" on the appraisal? | The cost to rebuild |
| Fannie Mae and Freddie Mac: | Are Government Sponsored Enterprises they buy loans FEMA stands for Federal Emergency Management Agency |
| A face to face application cannot be submitted without the Government Monitoring section completed. Choose one category of information that would be provided in this section of the 1003: | Race, gender, ethnicity of the borrower |
| Business tax returns aren't necessary for the loan if: | If the borrower owns less than 25% of the business |
| Can a VA loan be assumed? | Yes, VA may be assumable. The buyer must meet credit qualifications, but doesn't have to be a qualified military borrower |
| Is a VA Funding Fee ever refundable? | No |
| A variable rate mortgage is due to adjust. The index for this loan is the LIBOR, which is currently at 4.5%. The loan's current interest rate is 5.625%. The margin for the loan is 2.75%. The COFI is presently at 3.75%. What will the new interest rate be? | 7.25% |
| According to fair lending laws, the following can be asked of a loan applicants? | Their race |
| A fee charged by the bank for the use of borrowing money is: | Interest |
| A lender that has a lien in first position gives the lender priority over other liens except? | Unpaid property taxes |
| A loan adjustment based on the LIBOR is affected by the: | London Interbank Offered Rate an index |
| 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: | VOE |
| A loan where payments do not cause the principle to increase or decrease is: | Interest only |
| A man has applied for a loan and his home apraised for $225,000, he is taking out a loan for $165,150 and has agreed to pay 1 discount point on the loan and 2.5% broker fee. What is the total amount he will pay in discount and broker fees? | $5,780 |
| A property is valued at $300,000. There is a first and second mortgage with a CLTV of 75%. The second mortgage has a balance of $30,000. What is the amount of the first mortgage? | $195,000 |
| A credit report would include: | Account information, public records, and delinquent accounts |
| A creditor may ask about an applicant's marital status (T/F)? | True, as long as the information is not used to determine whether credit will be extended |
| A creditor must notify an applicants of its intended action on an application within how many days after the application is received? | 30 days |
| A borrower's payment is based on a starting rate of 4.5% on a FHA 2/1 buydown. What is the borrower's permanent rate? | 6.5% |
| 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 release clause |
| A complaint for housing discrimination would be handled by? | HUD |
| A copy of the HUD1 and the Closing Disclosure may be requested by the borrower how many days prior to the closing? | 1 day |
| A couple has qualified for a $250,000 loan. They are told the broker fee will cost 2 points. What is the dollar amount on that fee? | $5,000 |
| A borrower must notify the creditor of any intent to rescind on a loan by: | Midnight of the third business day |
| A borrower obtains a 30 year fixed interest only loan for $200,000. The interest rate for the loan is 6%. What is the borrower's initial payment? | $1,000/month |
| A borrower obtains a 30 year fixed rate mortgage for $160,000. The interest rate for the loan is 6.25%. What is the borrower's P&I payment? | $985.15 |
| $125k sales price, 80k first mortgage, $24,500 second mortgage, and $137k appraised value. What is the LTV and CLTV? | 64 and 84 |
| $237k sales price, 10,000 deposit, and 20% down payment. How much more does the borrower need to bring to closing for the down payment in addition to the deposit? | $37, 400 |
| The "margin" is best defined as: | The lender's profit |
| The 3 in a 3/1 ARM is: | The 3 year fixed rate term |
| A borrower elects to have a 2/1 buydown on an FHA loan at 6.5% fixed interest rate. The loan will have an interest rate that is permanent at? | 6.5% |
| Origination fees are what tolerance? | Zero |
| What kind of a charge is a broker fee? | Finance charge |
| A loan contains prepayment penalties. Which of the following documents would a borrower review to confirm this? | TIL Disclosure and promissory note, HUD1 and the GFE. Loan Estimate, Closing Disclosure |
| For the purposes of rescinding a loan transaction, "business days" includes everyday of the week except: | Sundays and legal public holidays. Called the "mailbox rule" |
| 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? | Any on of the five |
| Who must receive a Notice of their right to Cancel in a refinance transaction? | Anyone with ownership interest in the property |
| John & Jane Brown are coowners of a property and are entering into a refinance transaction that is subject to rescission. John is provided with one copy of Notice of Right to Cancel and Jane receives no disclosures. What is their deadline for rescission? | Three years after closing |
| The penalties for paying or accepting an illegal referral fee are: | Fines of up to $10,000 and up to one year in prison |
| What Act created FHA in 1934 and Fannie Mae in 1938? | The National Housing Act |
| BSA refers to: | Bank Secrecy Act |
| FINCEN is: | Financial Crimes Enforcement Network |
| SARS are: | Suspicious activity reports |
| Who evaluates, approves, or denies a loan application on behalf of a lender? | Mortgage Loan Underwriter |
| What is the entity that collects, payments, makes distributions, and reports loan activity? | Mortgage Loan Servicer |
| What is a government agency that guarantees loans for qualified military borrowers? | Veterans Administration |
| What insurance is designed to protect the owner and lender against loss due to a hazard in the residential real estate world? | Hazard Insurance |
| What is the government agency that deals with housing issues? | Housing and Urban Development (HUD) |
| Who can originate, sell, and service a mortgage loan? | Mortgage Banker |
| Who places and negotiates loans with a lender/investor on behalf of a borrower? | Mortgage Broker |
| Who negotiates rates and takes applications on behalf of a mortgage company? | Mortgage Loan Originator |
| Who is the person responsible for verifying and coordinating the information in a loan file? | Mortgage Loan Processor |
| What is the government agency that insures loans? | Federal Housing Administration (FHA) |
| What is the government agency that is the conservator of Fannie Mae and Freddie Mac? | Federal Housing Finance Agency (FHFA) |
| What is a federally chartered private institution, also referred to as a Government Sponsored Enterprise (GSE), that | buys and sells residential mortgages? |
| What is the seven member committee that controls the Federal Reserve System and is responsible for monetary policy and the regulator of commercial bank? | Federal Reserve Board |
| What is a government owned entity that guarantees principal and interest payments to investors of mortgage backed securities? | Government National Mortgage Association (Ginnie Mae) |
| What financial service corporations were created by congress to provide liquidity on the secondary market by buying and selling residential mortgages? | Government Sponsored Enterprise (GSE) |
| What is the public corporation that insures depositor’s deposits in member banks? | Federal Deposit Insurance Corporation (FDIC) |
| What is the entity, created under the Dodd Frank Act, responsible for consumer protection? | Consumer Financial Protection Bureau (CFPB) |
| What is a lender that uses its own funds to close loans but generally does not service loans? | Correspondent Lender |
| What are the federally chartered private institutions, also referred to as a Government Sponsored Enterprises (GSE), that buy and sell residential mortgages? | Fannie Mae and Freddie Mac |
| Who provides an opinion of value based on various appraisal methods? | Appraiser |
| What is an attorney, title company, or escrow company that prepares the closing documents and transacts the closing on a mortgage loan transaction? | Closing Agent |
| What is the entity, created under the Dodd Frank Act, which is responsible for consumer protection? | Consumer Financial Protection Bureau (CFPB) |
| What is a lender that uses its own funds to close loans but generally does not service loans? | Correspondent Lender |
| Who is an unrelated individual, who shares a committed relationship with the primary wage earner, currently resides in the same household as the primary wage earner, and intends to occupy the security property with the primary wage earner? | Domestic Partner |
| If a second lien is retained and the first is refinanced, then the instant that the first is paid the second would be in first position. The process of the second remaining in second position is? | Subordination |
| What loans carry more risk than is allowed in the prime market generally having higher interest rates? | Subprime Loan |
| What loans are qualified for military borrowers guaranteed by the Veterans Administration? | VA Loans |
| What is a loan that includes the remaining balance on an existing first, plus an additional amount requested by the borrower? | Wrap Around Mortgage |
| What is a loan secured by a primary residence and is not a 30 year fixed rate product? | NonTraditional Loan |
| What is a penalty for paying the mortgage or a portion of the mortgage earlier than the due date? | PrePayment Penalty |
| What is a mortgage issued for the purchase of real property called? | Purchase Money Mortgage |
| What is a refinance transaction where either the rate is reduced and/or the term is reduced? | Rate and Term Refinance |
| What is a mortgage loan guaranteed by the USDA to encourage borrowers to live in rural parts of the country? | Rural Housing Service Loan |
| What market place exists to provide leverage to the primary market by purchasing loans and providing liquidity to the primary market to continue lending? | Secondary Mortgage Market |
| What is the process of purchasing loans on the secondary market, converting them into pools, and then selling mortgage backed securities? | Securitization |
| What is a conventional loan that does not meet secondary market requirements? | NonConforming Loan |
| What is the clause which stipulates that the entire debt is due immediately if the mortgagor defaults under the terms of the contract? | Acceleration Clause |
| What is the calculation or formula a lender uses that outlines the required payments, which includes the monthly principal and interest, to extinguish a debt over a predetermined period? | Amortization |
| What is the method of selling real estate wherein the property purchaser agrees to take over the primary liability for payment of an existing loan? | Assumption |
| What is it called when a lump sum is due because the amortization schedule did not pay out the mortgage? | Balloon Mortgage |
| What is a mortgage payment schedule based on payments every 2 weeks resulting in one extra payment per year over the monthly pay cycle resulting in lower interest and paying off the loan earlier? | Bi Weekly Mortgage Payment |
| What is a mortgage that usually covers more than one parcel of land and allows the purchaser of individual lots to be released from the liability of the blanket mortgage through a partial release clause? | Blanket Mortgage |
| What is a temporary loan where the borrower may be selling a home to purchase another and gets a temporary loan on the home for sale? | Bridge Mortgage |
| What is a refinance transaction where the proceeds from the refinance are used to provide cash to the borrower and/or pay for debts not secured by the property being used as security for the loan? | Cash Out Refinance |
| What is a promise by a lender to advance funds to the borrower if the conditions of the loan requirements are met? | Commitment |
| What is a conventional loan that meets secondary market guidelines and does not exceed the conforming loan limits currently at $417,000? | Conforming Loan |
| What is a temporary loan for the construction period that is characterized by draw payments, interest only payments, and rising principal as phases of the project are completed? | Construction Loan |
| What is a construction loan where the permanent financing is included? | Construction to Permanent Mortgage |
| What is a residential mortgage loan in first position which is not insured or guaranteed by an agency of the federal government? | Conventional Loan |
| What is it called when the lender’s interest in the property has been extinguished by the borrower meeting the terms of the mortgage or security instrument? | Defeasance Clause |
| What is a mortgage loan that meets the requirements of FHA and insures the lender against the borrower’s default? | A FHA Insured Mortgage |
| What is a mortgage that is recorded before any other liens and is the first to be paid in the event of a default by the borrower? | First Mortgage |
| What is a mortgage loan guaranteed or insured by an agency of the government? | Government Loan |
| What is a revolving account secured by real estate generally in a junior position to the first mortgage? | Home Equity Line of Credit (HELOC) |
| The minimum repairs to qualify for an FHA 203K rehab loan are $_________ | 5000 |
| If a seller is selling a house less than ______ days from the date the house was purchased, the sale will not be eligible for FHA financing | 90 |
| The TILA/RESPA Integrated Disclosure Rule amends RESPA sections ____ and ___ | 4/5 |
| A change that makes the APR inaccurate by increasing it more than 1/8th for a regular loan after the initial disclosure will require a new ______ day waiting period | 3 |
| The Closing Disclosure must be provided to the applicant at least______ business days prior to consummation using the mailbox rule | 3 |
| A revised Loan Estimate must be delivered to the applicant no later than _____ days prior to consumamtion using the mailbox rule | 4 |
| The SAFE Act passing Score is ______ | 75% |
| The SAFE Act prelicense education requirement includes ______ hrs federal law, _____ hrs Ethics, ______ hrs nontraditional lending products, and ______ hrs electives | 3/3/2/12 |
| The SAFE Act annual renewal education requirements are ______hrs federal law, ______hrs ethics, _______hrs nontraditional lending and ______ hour elective | 3/2/2/1 |
| The national test has _______ questions and ____ are scored | 125/115 |
| A State regulatory department over residential mortgage financing can charge a civil penalty for noncompliance up to $________ per violation | $25,000 |
| A Consumer Reporting Agency (CRA) must address disputes within ________ days | 30 |
| The Red Flag identity theft program is a mandatory program and includes ______ red flag items created by the FTC | 26 |
| The Telemarketing Sales Rule requirement for consumers that are on the DoNotCall registry are the following: A business can contact a consumer up to______ months after the final transaction, _____ months if only an inquiry was made | 18/3 |
| The potential criminal penalty for mortgage fraud is up to $_________ and _________ in prison or both | $1,000,000, 30 years |
| Mortgage loan compensation agreement records must be retained for _______ years | 3 |
| The Dodd Frank Act Title ______ regulates the mortgage industry | IV |
| The Dodd Frank Act requires the lender to provide a copy of the appraisal promptly but no later than _____ days prior to closing a loan | 3 |
| ECOA record retention is ______ months | 25 |
| Liability for violating ECOA could result in a penalty of up to ________ and in a class action suite $_______ and _____% of net worth whichever is less | $10,000/$500,000/1% |
| The Home Mortgage Disclosure Act (HMDA) requires reporting for depository institutions that have assets greater than $_______ and nondepository institutions that close more than ______ owner occupied loans a year and or have 10 million in assets includin | 43 million/100 |
| Violation of the Fair Housing Act could result in criminal penalties of up to $_______ and or _______ year in prison | $100,000/1 |
| The Fair Credit Reporting Act (FCRA) is Title _____ of the Consumer Credit Protection Act | VI |
| FCRA was permanently extended by the Fair and Accurate Credit Transaction Act (FACTA) in ________ | 2003 |
| Under FCRA a bankruptcy may be reported on a credit report for ______ years and other derogatory credit for a period of ______ years | 10/7 |
| A one phone call fraud alert request can include an alert on a credit file for _______days and _______ years if a police report is filed and submitted to the CRA | 90/7 |
| Under HOEPA If the points and fees charged by the lender exceed _____% of the loan amount then the loan is a “high cost loan” | 5% |
| A loan that exceeds the HOEPA thresholds for APR and points and fees is subject to section CFR 1026.___ of TILA/Reg. Z. Also known as a section____ loan and a “high cost loan” | 32/32 |
| A “Higher Priced Mortgage Loan” HPML uses the “Average Prime Offer Rate” APOR as a threshold. If the APR for a first lien loan exceeds the APOR by ______% or greater or by _______% or greater for a second or subordinate lien loan then the loan is subject | 1.5%/3.5% |
| If a loan is a HPML loan then the minimum period to escrow for taxes and insurance, regardless of the LTV, is _______ years | 5 |
| The criminal penalty for violating Regulation Z/TILA is up to a $________ fine and or _______ years in prison | 5000/1 |
| The individual civil penalty for violating TILA/Reg. Z is a minimum of $______ up to a maximum of $_________ | $400/$4000 |
| The civil penalty for a class action suit is $________ or ___% of net worth which is less | $500,000 and 1% |
| The Equal Credit Opportunity Act (ECOA) is Title _____ of the Consumer Credit Protection Act | VII |
| ECOA requires a notice of action taken notice to be provided within ______ days of receiving an application for credit, denying an application or denying an incomplete application | 30 |
| ECOA requires a notice of action taken within ______ days of a counter offer that is not accepted | 90 |
| ECOA requires a copy of an appraisal or any evaluation of the subject property within ______ days prior to the loan closing, and ______ days after it is determined the loan will not close | 3/30 |
| If a person on title does not receive the notice of the right to rescind then the right to rescind the transaction extends to ______ years | 3 |
| If a borrower rescinds a loan the lender has _______ days to return all monies paid in connection with the loan and cancel the security instrument | 20 |
| The record retention period for retaining the TILA disclosures is ______ years | 2 |
| The Home Owners Equity Protection Act (HOEPA) has established the “annual prime offer rate” APOR, as the basis for determining if a loan is a high cost loan. If the APR exceeds the APOR by more than _______% for a first lien greater than $50,000 loan amou | 6.5%/8.5% |
| As a general rule the APR is considered accurate if it is not more than _____ of 1 percent above or below the previously disclosed APR on regular transactions | 1/8th |
| The Mortgage Disclosure improvement Act (MDIA) has a ___, _____, ______ rule | 3,7,3 |
| A borrower has until midnight of the _____ business day to rescind a loan on a primary residence. Saturday is included in the rescission days | 3rd |
| The civil penalty for violating RESPA section 8 is ______ times the amount of the money received | 3 |
| The TruthInLending Act is Title _____ of the Consumer Credit Protection Act | 1 |
| If there is an ARM loan, the CHARM booklet and the specific ARM program disclosure are considered early disclosures and are required to be delivered to the borrower within ______ business days of receiving the application | 3 |
| How much can the creditor or closing agent charge the borrower for preparing the Closing Disclosure? | zero |
| Escrow collection and other requirements are covered under RESPA section: | 10 |
| An analysis of an escrow account must be done _______ a year | once |
| The section of RESPA that addresses kickbacks and excessive fees is RESPA section: | 8 |
| RESPA records must be retained for a period of _______ years | 5 |
| The criminal penalty for violating RESPA is up to a $________ and ______ year in prison or both | $10,000/1 |
| The origination fee on the Loan Estiate has a _____ tolerance | zero |
| The period to provide a refund for a tolerance violation on the Loan Estimate is______ days after consumamtion | 60 |
| The lender is allowed to collect a _____ month cushion reserve on an escrow account | 2 |
| After an annual escrow account analysis if there is a surplus of greater than $_____ the lender has _____ days to send a check to the borrower for the surplus amount | $50/30 |
| If there is a shortage in the escrow account, after the annual analysis, greater than one month escrow, the lender can add the amount to the total escrow amount and collect it over a _____ month period | 12 |
| The servicing disclosure requirements are covered under RESPA section: | 6 |
| For _____ days from the date of transfer the new servicer may not charge the borrower a late fee or report a negative rating to the consumer reporting agency | 60 |
| The borrower has the right to review the Closing Disclosure ______ day(s) before consummation | 1 |
| RESPA does not cover loans over _____ acres but those loans are covered under TRID | 25 |
| RESPA and TRID requires that early disclosures be provided to the consumer no later than ______ business days after receiving the loan application unless the loan is denied within ______ days | 3/3 |
| Most third party fees on the Loan Estimate have a _____ % tolerance | 10% |
| The borrower has a minimum of ______ business days to accept the estimate of charges on the Loan Estimate | 10 |
| The Loan Estimate has _____ pages | 3 |
| A servicer must acknowledge a written request from a borrower within _____ days and respond to the issue within ____ days | 5/30 |
| A servicer who transfers a loan to another servicer must notify the borrower in writing of the impending transfer within ______ days prior to the transfer | 15 |
| A servicer receiving the transferred loan must notify the borrower in writing within _____ days of receiving the transferred loan | 15 |
| One discount point is equal to ____% of the loan | 1% |
| _______ basis points equals______ discount point | 100/1 |
| The USDA Rural Housing Service loans will guarantee ______% in the event of the borrowers default | 90% |
| The USDA/RHS loans allow ______% financing | 100% |
| USDA/RHS loans have income limits based on ______% of the US median income | 115% |
| The minimum age to get a reverse mortgage is: | 62 |
| A temporary 2/1 buydown loan means that the note rate is reduced by _____% in year one and ______% in year two | 2%/1% |
| The upfront mortgage ins on a full qualifying FHA loan is______% of the loan amount and can be financed: | 1.75 |
| A borrower can get a prorated refund of FHA mortgage insurance for _____ years when refinancing from one FHA loan to another | 3 |
| VA allows _______% percent financing | 100% |
| On a VA guaranteed loan the maximum entitlement that is reflected on the certificate of eligibility is: | $36,000 |
| If a VA borrower has already left the military the borrower must have a ________ reflecting an honorable discharge | DD214 |
| In the event of default VA will guarantee up to ______% of $______ | 25%/$417K |
| VA charges an upfront funding fee for most borrowers, the funding fee for a borrower using their entitlement for the first time putting down less than 5% is: | 2.15% |
| The minimum cash investment from a borrower on a FHA loan is: | 3.5% |
| FHA allows _______% of the funds needed at closing to be a gift | 100% |
| Maximum seller contributions towards closing costs and prepaid items on a FHA loan are____% of the sales price | 6% |
| The most popular FHA loan program is the Section ________ insured mortgage | 203B |
| After a borrower closes on a loan transaction they have _____ days to move in | 60 |
| If a FHA borrower defaults the lender will receive _______% of the loss | 100% |
| Fannie Mae allows ____ % of the face amount of the insurance policy as the deductible | 5% |
| If a borrower is using rental income to qualify and the amounts are not already included on the tax return only _____% of the actual rental income can be considered. There is a _____% deduction for vacancy and maintenance | 75%/25% |
| A borrower who has more than ______% in commission earnings or who owns more than _____% of a company is considered self employed | 25%/25% |
| A representative credit score is the middle of ______ scores or the lower of _____ scores and the lender will not underwrite a loan with _______ score | 3/2/1 |
| A borrower can use _____ % of a stock portfolio account for reserves | 100% |
| A borrower can use_______% of the vested interest in a retirement account for reserves | 60% |
| Fannie Mae requires insurance coverage equal to the lesser of ______% of the insurable value of the improvements as determined by the insurer or the unpaid principal balance as long as it equals _____% of the insurable value | 100%/80% |
| Maximum age for credit documentation is _____ days and ________ days for new construction | 90/120 |
| The minimum credit score for Fannie Mae and Freddie Mac is: | 620 |
| The IRS form number for a lender to obtain a copy of the borrower’s tax transcript is: | 4506T |
| Nontaxable can be grossed up: | 25% |
| To be used in loan qualification, income must meet the _______ year likelihood of continuance test | 3 |
| Income qualifying requires the verification of the most recent _______ days of earnings | 30 |
| If the LTV is equal to or greater than 90% the maximum seller contribution is _____ % of the lower of the sales price or appraised value | 3% |
| The maximum seller contributions for an investment property is: | 2% |
| A limited cashout refinance allows the borrower to get cash back, the lower of $_____ or _____% | $2000/2% |
| The full appraisal form for an interior and exterior inspection of a single unit property is the Fannie Mae form number_____ | 1004 |
| The exterior only appraisal for a single family unit is a Fannie Mae form number______ | 2055 |
| Seasoned funds have been in the bank for____ days or more | 60 |
| If a debt has no payment associated with the debt, the underwriter will allocate _____ of the debt as a qualifying payment | 5% |
| The number of months nontraditional credit is evaluated, for loan approval is: | 12 |
| The Uniform Residential Loan Application is a Fannie Mae form number: | 1003 |
| The 1003 loan application has ______ sections | 10 |
| Verification of employment (VOE) covers the most recent _______ years | 2 |
| Verification of deposit (VOD) covers the most recent ____ days | 60 |
| A verification of rental (VOR) and a verification of mortgage (VOM) covers the most recent ______ months | 12 |
| The housing payment and total debt ratios as a percentage of gross monthly income for standard FHA financing are: | 31/43 |
| The housing payment and total debt ratios as a percentage of gross monthly income for standard VA financing are: | 41/41 |
| If a lender collects credit scores on a borrower the lender must disclose the scores to the borrower and must also give ____ reasons for each score | 4 |
| The range for credit scores under the FICO scoring model is: | 300-850 |
| Payment history makes up what percentage of a credit score? | 35% |
| The maximum points and fees for a $100,000 loan or greater on a qualified mortgage is: | 3% |
| The maximum DTI for a General Qualified Mortgage is: | 43% |
| The minimum time a creditor must keep a loan and not sell it to maintain QM status for Small Creditor QM and Balloon QM is: | 3 years |
| The housing payment and total debt ratios as a percentage of gross monthly income for standard conventional financing are: | 28/36 |
| The SAFE Act defines a nontraditional mortgage as any product other than a ____ year fixed rate mortgage | 30 |
| The maximum loan term for a qualified mortgage is: | 30 years |
| The Home Owners Protection Act requires lenders to automatically terminate mortgage insurance when the loan reaches____ of the original value | 78% |
| Home Owners Protection Act allows a borrower to request cancellation of the mortgage insurance when the borrower can prove a ________ % equity position | 20% |
| A good payment history under the Home Owners Protection Act means no _____ lates in the last 24 months and no _____ lates in the past 12 months | 60/30 |
| A fully amortized 30 year loan would have payments based on _____ months and the loan is due in ______ months | 360/360 |
| A 30 year mortgage with a 15 year balloon would have payments based on ____months and the loan would be due in____ months | 360/180 |
| A biweekly payment plan has ____ monthly payments within the year | 13 |
| Number of units allowed in residential mortgage financing: | 14 |
| In a conventional loan private mortgage insurance and escrows are required when loantovalue is greater than: | 80% |
| An adjustable rate mortgage that has a fixed rate for 5 years and can change annually is a_______ ARM. The rate is rounded to the nearest ______ | 5/1, 1/8th, or .125 |
| Conventional conforming loan limit for a single family unit is: | $417,000 |
| Which division of the Office of Financial Regulation (OFR) is the one that licenses, examines, and regulates nondepository financial services companies and other related industries in the state of Florida? | Division of Finance |
| Which is a responsibility of the Division of Finance within the Office of Financial Regulation? | conduct examinations of mortgage brokers |
| To protect the citizens of Florida by providing regulation of businesses that promote the growth and development of the economy and by enforcing the banking, securities and financial laws of the state is the mission of the: | Office of Financial Regulation |
| What transactions still require the RESPA GFE and HUD1 after the TRID changes? | Loans originated by lenders that perform 5 or fewer loans per year and Reverse mortgages |
| TRID amended RESPA sections: | 4 and 5 |
| Identify two temporary loan types: | Bridge loan and Construction loan |
| The Special Information booklet is generally required for what kind of transaction? | Purchase, where lenders close 5 or fewer loans a year |
| Paying a referral fee to encourage a real estate agent to share clients is a violation of: | RESPA section 8 |
| At what point can a lender charge a late fee after a loan has been transferred? | After 60 days |
| Under RESPA what is considered a business day? | Any day the creditor's offices are open for business |
| If a loan is being transferred to a new servicer the servicer transferring the loan is required to notify the borrower how many days prior to the transfer? | 15 days |
| What kind of loans will RESPA not cover? | Temporary loans and business purpose loans |
| Name three characteristics of a construction loan: | Rising principal, interest only,and draw payments |
| When will RESPA cover raw land? | If there is an intent to build within 2 years |
| RESPA is regulated by: | Consumer Financial Protection Bureau |
| The closing process under RESPA is called: | Settlement |
| RESPA is: | Real Estate Settlement Procedures Act |
| RESPA is Regulation: | X |
| The following RESPA disclosure is an accounting of actual costs: | HUD 1 |
| What are the three RESPA early disclosures? | Settlement booklet, Good Faith Estimate, and Servicing disclosure for lenders that make 5 or fewer loans annually |
| When are the RESPA early disclosures required? | At application or within 3 business days of receiving the application |
| When would a RESPA early disclosure not be required? | Loan is denied within 3 business days of receiving the application |
| What are the two conditions that could trigger the RESPA Affiliated Business Arrangement disclosure? | Greater than 1% ownership and an associate relationship |
| Our origination fee on the GFE has a _______ tolerance | Zero |
| An origination fee includes fees that are: | Retained by the lender or the broker |
| Our origination fee does not include the following fees: | Third party fees |
| Third party fees on the GFE has the following tolerances: | 10% |
| The section of RESPA that addresses servicing disclosure requirements is: | Section 6 |
| The section of RESPA that addresses escrow accounts is: | Section 10 |
| The section of RESPA that addresses kickbacks and excessive fees is: | Section 8 |
| The period required to retain RESPA documents is: | 5 years |
| The penalty for violating RESPA is: | $10,000 and/or 1 year in jail |
| A borrower can request a copy of the HUD1 ____ day(s) before closing. Applies to lenders that make 5 or fewer loans annually | 1 |
| Can the closing agent charge the borrower for preparing a copy of the HUD1? | No |
| If there is a surplus in a borrower's escrow account greater than $50, what is the lender required to do? | Send a check to the borrower within 30 days |
| What laws were amended to create the new TRID rule? | RESPA sections 4 and 5 and TILA |
| What booklet is required to be provided to the applicant at application, or within 3 business days of application, for purchase transactions? | The Tool Kit |
| How many pages does the Loan Estimate have? | 3 |
| How many pages does the Closing Disclosure have? | 5 |
| What is the TIP on the new TRID disclosures? | Total interest paid over the life of the loan compared to the amount financed, disclosed as a percentage |
| What does it mean when an applicant signs the Loan Estimate or the Closing Disclosure? | They have received the disclosures |
| The form number for the Loan Estimate is: | H24 |
| The form number for the closing disclosure is: | H25 |
| What is required for the applicant to receive electronic delivery of the disclosures? | Electronic consent to receive documents electronically |
| How are fees listed on the new TRID disclosures? | Alphabetically |
| When is an application considered to have been received? | When the six pieces of information have been received |
| What date did the TRID go into effect? | October 3, 2015 |
| What business day rule applies to determining when the Closing Disclosure should be delivered? | The mailbox rule. All calendar days except Sunday and legal public holidays |
| If an interest rate is locked after the Loan Estimated has been delivered, how long does the lender have to deliver the revised Loan Estimate to the applicant? | 3 business days |
| What is the difference between the regular three business days and the mailbox rule definition of three business days? | The regular definition is any day the lender is open for business and the mailbox rule is all calendar days except Sundays and legal public holidays |
| Which would not trigger a new three day waiting period after delivering the Closing Disclosure? The APR on a fixed rate loan increases by 1/8th , The Loan Product changes, The Seller contribution increases by $150 and a prepayment penalty is added? | Seller contribution increases by $150 |
| What federal agency has enforcement and rule making authority over TRID? | Consumer Financial Protection Bureau (CFPB) |
| Who is responsible for the timing and accuracy of the Closing Disclosure? | The Lender |
| If a mortgage broker originates a loan and receives the application, who is responsible for the accuracy and the timing of the Loan Estimate? | The Lender |
| TRID is an acronym for: | TILA RESPA Integrated Disclosures |
| What forms were integrated to create the Loan Estimate? | Good Faith Estimate and the early TIL disclosure |
| What forms were integrated to create the Closing Disclosure? | The HUD1 and the final TIL disclosure |
| When should the applicant receive the Loan Estimate? | Within 3 business days of receiving the application |
| When should the applicant receive the Closing Disclosure? | At least 3 business days before consummation |
| How soon after placing the Loan Estimate in the mail can the loan close? | 7 business days |
| If the Closing Disclosure has been provided to the applicant, can a new revised Loan Estimate be provided if there is a change of circumstances? | No, the Loan Estimate may not be provided after the Closing Disclosure has been provided |
| How many days before consummation must the last revised Loan Estimate be delivered? | 4 business days |
| If the revised loan estimate is mailed, how many days before consummation must it be placed in the mail? | 7 business days |
| Which of these transactions would not be covered under TRID? Construction loan, reverse mortgage, vacant land, closed end transaction? | Reverse mortgage |
| What law required the disclosures under TRID be integrated? | Dodd Frank Act |
Created by:
Tarakling