1. Which
of the following best describes a borrower that provides a social security
number that differs from what is provided on the loan application?
Under
regulatory laws, it is considered a predatory practice for a loan originator to
do which of the following?
Delay closing of any mortgage loan
for the purpose of increasing interest, costs, fees, or charges payable by the
borrower
3. Which
of the following is the most common way that income is falsified?
Borrowers overstate income
4. Which
of the following is a condition that would make fraud more likely to occur in a
mortgage company?
Weak oversight from management
5. Which of the following best describes a situation where a borrower commits fraud in order to purchase a home for his or her use?
Fraud for housing
6. What
is used to permanently identify an MLO?
Unique identifier
7. A
loan processor or underwriter who is employed by a licensed entity may not
perform which of the following activities:
Discuss loan program or rate
8. When
can a mortgage broker employ an unlicensed and unregistered mortgage loan
originator?
Under no circumstances.
9. Which term below is defined as any individual who meets the definition of loan originator and is an employee of a depository institution or a subsidiary that is owned and controlled by a depository institution and regulated by a Federal banking agency or an institution regulated by the Farm Credit Administration and is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry?
Register loan originators
10. Which of the following is a prohibited act?
Omitting information in an
application
11. Which
of the following would have to be on an MLO’s business card?
Their NMLSR unique identifier
12. An entity will be granted a loan originator’s license if:
An entity cannot be granted a loan originator license no matter what it does
13. Under
the SAFE Act, states are required to do background checks as part of their
effective supervision. A background check includes all of the following,
except:
Education History
14. If an applicant fails the National Exam on their first attempt, how long do they have to wait to re-test?
30 Days
15. How
long is the waiting period for a person who seeks to license as an MLO if a
prior felony was pardoned?
No waiting period.
16. All
of the following are grounds for denying a license except?
Paid medical collection
on credit report.
17. An individual seeking to license as an MLO will not be approved for a license based on which of the following?
A felony conviction in last 7 years.
18. Job
functions such as taking residential mortgage loan applications or offering or
negotiating terms of a residential mortgage loan for compensation or gain,
represent the functions of which person in the mortgage industry?
MLO
19. All of these examples illustrate an individual NOT engaged in the business of a loan originator EXCEPT:
Jennifer acts as a loan originator fulfilling her duties as an employee of a non profit organization
20. How many hours of CE must MLO’s complete annually?
8
21. The
Nationwide Mortgage Licensing System was put in place to do all of the
following except?
Approved or deny application
for license.
22. All
licenses expire on what date annually?
Dec 31.
23. Business cards, stationery, brochures, signs, rate lists, or other promotional items are considered?
Advertising
24. Those
seeking to license as an MLO must complete a minimum of ____ hours of
pre-licensing education.
20 hours
25. When using the sales comparison approach to arrive at an opinion of value, an appraiser looks at which of the following?
Into the recent past to analyze similar sales
26. Which
of the following is the FTC authorized website that a consumer can use to
obtain their annual free credit report?
Annualcreditreport.com
27. Which
of the following is the maximum amount of the net adjustment value allowed on
an appraisal?
15%
28. What
is the term used for monthly payments that pay principal and accrued interest
of the loan, with a large payment at the end of the term to pay off the
remaining balance?
Balloon Payment.
29. Some
of the factors private mortgage insurance companies consider when they set
their rates and coverage parameters include all of the following except:
Borrower's age and familial status
30. Which
of the following terms is associated with the transfer of deed from one person
to another?
31. The
utilization of borrowed funds to increase purchasing power is:
Leverage
32. Another
name for underwriting is:
Risk analysis
33. When
disclosing a prepayment penalty, what must we assume?
That the loan will prepay immediately, when it is costliest
34.
According to Fannie Mae guidelines, the dollar amount of
the net adjustments for each comparable sale should not exceed ___________ of
the sales price of the comparable?
15%
35.
If you need to refinance a first mortgage and leave an
existing second mortgage in place, you must have the second lien holder sign
which document listed below?
A subordination agreement
36.
A loan with a 2/1 buy down, a current market rate of 6.5%,
and a start rate of 4.5% would have a payment based on what rate in month 30?
6.25%
37.
In a deed of trust, the power of sale in the event of
default is given from the:
Trustor to trustee
38.
Which of the following loss mitigation strategies is a
permanent change in a borrower's loan terms in response to his long-term
inability to make his payments?
Mosification
39.
Which of the following loans is an example of Open- ended
credit?
HELOC
40.
Which of the following must be reported to borrowers on the
Loan Estimate as required under TILA (TRID)?
Total Interest Percentage (TIP)
41.
The Consumer Financial Protection Bureau was responsible
for combining the disclosure information from which of the following two (2)
laws?
TILA and RESPA
42.
Under TILA, a consumer lawsuit must begin within ___
year(s) of the actual violation?
1 year
43. What is the fine for a violation of TILA where an MLO consistently understates the APR to borrowers?
Five thousand dollars
($5,000) and or one (1) year imprisonment unless class action, then five
hundred thousand dollars ($500,000) or one percent (1%) of net worth
44.
Which of the following are prepaid finance charges?
Origination
and broker fees
45.
If advertising a mortgage loan with a 6.99% APR under the
TILA, what other information is required to be disclosed in the advertisement?
Monthly payments, down payment, and loan amount
46.
The Truth-In-Lending Act compels creditors (or brokers
acting as a creditor agent) to disclose which of the following to borrowers who
are refinancing a primary residence?
That they are entitled to a three (3) business day right of rescission period
47. What rescission period are borrowers who are refinancing a primary residence, entitled to which must be disclosed by lenders according to the TILA?
Three (3) business day rescission period
48.
A copy of the Closing Disclosure can be used to verify the
net proceeds from the sale of real estate. Which of the following could be a
warning sign of a potential problem?
The sales price differs from the sales contract
49. Which is a recurring cost after Closing?
Escrow Account Collections
50.
Which of the following is included in the finance charge
and must be calculated into the APR under TRID?
Mortgage broker fee
51. The Truth-In-lending Act is interpreted by what regulation?
Regulation Z
52.
The interest rate of an ARM is comprised of the ___________
and the _________?
Index/margin
53.
Telemarketers must maintain records of promotional
materials and telemarketing scripts. How long must they be maintained?
24 months
54.
Which of the principal parts of the GLB Act protect
consumers from individuals and companies that obtain their personal financial
information under false pretenses?
Pre-texting provision
55.
What entity provided guidelines and rules for ECOA?
CFPB
56.
Which of the following must be reported to borrowers on the
Loan Estimate as required under TILA (TRID)?
Total interest payment (TIP)
57.
FACTA was an update and amendment to which of the
following?
FCRA
58.
The document that presents a final, detailed list of the
fees and financial accounting of the mortgage loan is known as what?
Closing disclosure
59.
Which of the following entities is responsible for
monitoring compliance with advertising rules?
FTC
60.
What does the APR represent in a mortgage transaction?
The actual cost the borrower will pay for the loan with all the interest added on to the loan balance
61. Which of the following reasons best describes why Congress chose to adopt the provisions of HMDA?
Financial institutions had contributed to the decline of geographic areas by not providing financing
62.
Which two entities below created and manage the NMLS&R?
CSbS/ARBMR
63.
Under ECOA, the length of time that adverse credit
collection information may appear in a credit report is regulated by:
Regulation B
64.
Redlining is best defined by which of the following
practices?
Making all or certain lending programs unavailable based on geographic boundaries
65.
What activities does HMDA prohibit of lenders?
Redlining
66.
After the collection of a statistical data, lenders are
required to forward that information to the regulator by what date under Home
Mortgage Disclosure Act?
March 1
67.
Nonpublic personal information (NPI) does not include which
of the following?
Publicly available information
68.
If advertising a mortgage loan with a 6.99% APR under the
TILA, what other information is required to be disclosed in the advertisement?
Monthly payment,down payment, and Loan amount
69.
Under the Guidance on Sub-Prime Mortgage Loans, the CSBS
considers all of the following to be a predatory lending practice except:
Charging higher rates to
risky buyers
70.
What is the primary objective of the Gramm-Leach Bliley
Act?
The provisions of the Act restrict the disclosure of nonpublic customer information
71.
When can you ask about religion under ECOA?
Never, any under circumstances.
72.
The Dodd-Frank Act minimum standards for mortgage loans
have eliminated which of the following types of loans?
No Income Verification loans (NIV)
73.
If a financial institution violates the GLBA, they are
subject to a penalty of _________ per violation?
100,000
74.
According to ECOA, how quickly must the appraisal be
delivered to the borrower when they have waived the early disclosure and the
loan is denied?
30
days
75. Which of the following is included in the finance charge
and must be calculated into the APR under TRID?
Mortgage broker fee
76. Any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit is which of the following?
Creditor
77.
What federal law prohibits making a high cost loan to a
customer without verifying the customer’s ability to repay the loan?
HOWPA
78.
While a creditor/ broker does not have to advertise every
single plan offered, it is unlawful to conceal what from consumers?
More consumer-
friendly plans
79.
If a servicer receives a “qualified written request” from a
borrower for information about an account, the servicer must research the issue
and either resolve it, or justify their actions and communicate the decision
within how many business days after receiving the request?
80. Which of the following best describes the importance of Ethics in the mortgage industry?
If a mortgage agent or company behaves unethically, it is not only the reputation of that agent or company that is harmed, but also the reputation of the mortgage industry as a whole.
81. How
long is the Loan Estimate good from the initial time it is provided?
10 Days
82. Enforcement
of the USA Patriot Act is done primarily by which of the following?
FINCEN
83. If
you need to refinance a first mortgage and leave an existing second mortgage in
place, you must have the second lien holder sign which document listed below?
A subordination
agreement
84.
Which of the following loans is an example of Open- ended
credit?
HELOC
85.
A lender accepts a new computer from a title vendor in
order to conveniently order title services directly from the vendor.
Which of the following would this be considered?
Illegal and unethical
86.
While trigger terms require disclosures of credit terms
under TILA do general advertising terms also require disclosure?
No if they do not refer
to repayment period length or down payment cost
87.
Regulation Z applies to entities that extend credit if
which of the following conditions are met?
a.
The credit is offered to consumers
b.
The credit is subject to finance charge and payable in more than four
installments
c. The credit is primarily for personal, family or household purposes
d. All of the above
89. What form does an Appraiser use to certify
construction is complete?
442
90. What are the potential patterns, practices,
or specific activities indicating the possibility of identity theft considered to
be?
Redflags
91. What
is the objective of the Dodd-Frank Act?
To promote the financial stability of
the US by improving accountability in the financial systems
92. FACTA
was an update and amendment to which of the following?
FCRA
93. This type of notice is given to consumers who are not customers, in lieu of full initial notice, when the lender has no plans to share nonpublic personal information about them
Short- form notice
94. Discharge
Papers issued by any US armed service are known as:
95. The
Truth in Lending Act requires two (2) additional disclosures for adjustable
rate mortgages on a consumer's principal dwelling with a loan term greater than
twelve (12) months when the rate can change after the consummation of the loan.
One disclosure is a booklet titled "Consumer Handbook on Adjustable Rate
Mortgages." Which of the following is the other required disclosure?
96. The
practice of a lender not requiring a nontraditional loan borrower to thoroughly
document income or assets is known as?
Low-Doc or No-Doc Loans
97. Individuals
wishing to evaluate how a geographic area is being serviced by the lending
community should do which of the following?
Search the HMDA data available to the
public for just that reason
98. What
does the APR represent in a mortgage transaction?
The actual cost in the form of an
annual interest rate the borrower will pay for credit
99. Which
one of the following areas is not addressed by the agencies' guidance on
nontraditional mortgage guidance?
Appraisal and fair market value
practices
100. What
is the definition of a “business day” under the revisions to TILA and MDIA as
it relates to the initial disclosures?
101. Which loan product allows for down payment of borrower’s own funds, gift funds or housing authority grants?
FHA
102. All of the following are protected classes of ECOA except?
Handicap
103. How do public officials, attempting to manage the stability of neighborhoods and communities, rely on HMDA data?
It helps them target public investments from the private sector into areas of need
103. How
many APRs are there for a loan?
1 APR
104. Which
of the following is not a risk associated with nontraditional mortgages?
Fixed rate loans
105. When
advertising for a variable rate, which of the following does not have to be
included?
An explanation of how the changes to the APR will be made
106. What
may an underwriter use as a basis of approving a mortgage loan application?
Receipt of public assistance
107. Which
of the following best describes the Home Mortgage Disclosure Act?
HMDA is a disclosure law that relies upon public scrutiny for its effectiveness
108. The FTC Disposal Rule requires that individuals who have contact with consumer information must dispose it properly. How does the Rule dictate disposal?
The Rule does not dictate the method but requires the individual to define the reasonable method
109. According to Fannie Mae guidelines, the dollar amount of the net adjustments for each comparable sale should not exceed ___________ of the sales price of the comparable?
15%
110. The
Federal National Mortgage Association is which of the following?
GSE
111. If the loan program allows payments on a real estate transaction purchase that are insufficient to service the debt, the result will be:
Negative
amortization
112. Under ECOA, entities making residential mortgage loans must maintain records or other data relating to those loans for how long
25 months
113. Assume you have a customer who has a fixed income and does not show any prospect of additional earnings in the next few years. Which of the following would be an appropriate product for this customer?
A
30-year fixed rate loan
114. What type of loan requires reporting under the Home Mortgage Disclosure Act?
Loans purchased for the purpose of
servicing those loans
115. What
fees may be collected prior to the 3-business day waiting period?
Credit report fee
116. One purpose of the HMDA and Regulation C is to provide the public with information that will help show whether financial institutions are serving what component of the neighborhoods and communities in which they are located?
Ensuring that the housing credit needs
of communities are met
117. Which
of the following is NOT a risk associated with a Payment Option ARM loan?
118. Which
of the following safeguards were NOT covered under FACTA?
Telemarketing/ Do Not Call
provisions
119. The
Truth-In-lending Act is interpreted by what regulation?
120. If
a loan processor has evidence that a loan originator has influenced the value
of an appraisal through coercion, what does the law require the processor to
do?
121. What
is the Federal agency responsible for issuing and implementing regulations for
TILA?
CFPB
122. What is the purpose RESPA was created?
Facilitate Shopping
123. What measures did the Dodd-Frank Act enact to eliminate predatory loan originator compensation practices?
Restricts compensation being paid to
originator by any other source if the borrower in any way is paying fees that
compensate the originator
124. Freddie
Mac is also known as which of the following?
Federal Home Loan Mortgage Corporation
125. Which
type of property or transaction is not covered or protected under RESPA?
6-unit apartment complex
126. How
many years must evidence of compliance with TILA be retained after the date of
disclosure?
3 years
127. In
addition to the loan origination fee listed on the LE, according to TRID what
fees may a lender charge for making a loan:
Underwriting fee
128. How
much must the APR change on a fixed-rate loan for the loan to be considered out
of compliance?
More than 1/8th % on a regular loan
129. Which
of the following would restrict the CRA from supplying prescreened consumer
report information on a potential borrower?
130. When
is the creditor required to provide the LE to a borrower?
131. A borrower would be required to receive a CHARM booklet and ARM disclosure for all but which of the following scenarios?
A borrower decides to lock in a on a 2-1 buydown program
132. According
to ECOA, A creditor shall notify an applicant of an action on the application
(including an adverse action) within _____ days after receiving a completed
application concerning the creditor's approval of, counteroffer to, or adverse
action on the application?
30 Days
133. In
a deed of trust, the power of sale in the event of default is given from the:
Trustor to the trustee
134. If the servicing lender assigns, sells, or transfers servicing rights to the loan to another servicer, who is required to send a notice of the transfer form?
Both the transferor and the transferee
135. Choose the best definition for the Federal Housing Administration (FHA).
A federal agency within HUD that provides mortgage insurance for residential
mortgages
136. Under the Dodd-Frank Act appraisal independence rules, is a there a restriction for a lender attempting to break into a new market from paying an appraisal company 50% more than the customary charge to get good service?
Yes, the law dictates that fees be customary and reasonable for the geographic market
137. A
final payment at the end of a loan term to pay off the entire remaining
principal and interest balance NOT covered by payments during the loan term is
called what?
A Baloon
138. What is the responsibility of a mortgage loan originator who discloses to consumers inaccurate information provided to him or her by the credit bureau?
The mortgage loan originator cannot be held responsible for inaccurate information furnished by the credit bureau
139. The CFPB regulates “covered persons” who engage in offering or providing “consumer financial services or products” These include:
Providing check cashing, check collection, or check guarantee services
140. Dodd-Frank
Prohibits MLO compensation that varies based on which of the following?
141. ECOA
protects borrowers based on:
Physical Characteristics
142. The
Consumer Financial Protection Bureau was responsible for combining the
disclosure information from which of the following two (2) laws?
143. In
a month with 30 days and a purchase closing on the 4th day of the month, how
many days of interest would the title agent be required to collect?
145. Which
one of the following is NOT a purpose of the Fair and Accurate Credit
Transactions Act (FACTA)?
Improve the processing time of credit reports
146. What
is the task of the Bureau of Consumer Financial Protection within the Federal
Reserve?
To
regulate consumer financial products and services in compliance with federal
laws
11 Years
148. A
copy of the Closing Disclosure can be used to verify the net proceeds from the
sale of real estate. Which of the following could be a warning sign of a
potential problem?
149. Under
HOEPA, which of the following predatory lending practices is not prohibited?
Lending with due regard for a
borrower’s ability to repay the loan
150. Dodd-Frank prohibits compensation that varies based on
which of the following?
An interest-only payment
Modification