Mortgage Loan Origination - ProSchools - UST Oregon Mortgage Lending Licensing, Compliance and Unique Test Areas

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98 terms

Mortgage Banker

Make, negotiates, sells or services mortgage loans

Mortgage broker

Engages in selling, or accepts funds for investment in, real estate paper

Loan originator

Individual who takes a mortgage loan application and negotiates loan terms

Loan processor

Performs clerical or support duties after receiving an application

Three years

Qualified individual must have this amount of mortgage experience

Five years

Mortgage license records must be maintained fro this period

Jarvis Jenkins was 10 days late in filing his call report with the NMLS. What is the amount Jarvis can be penalized for filing the report late?

$2500

$1000

$500

$1500

The correct answer is B. Failure to file a required report when due may subject the licensee to a penalty of not more than $100 per day for each day the report is not filed. Jarvis can be charged $1000 (10 days x $100).

The Smalltyme Mortgage Brokerage cleaned out their filing cabinets and boxed up files to be stored offsite. In order to place the files in a remote storage location, Smalltyme must meet all of the following EXCEPT:

maintain an electronic copy at the principal office.

provide notice to the Director.

be able to identify the exact location of a file.

the files are more than six months old.

The correct answer is A. Books and records can be maintained at a remote storage location if the file is more than six months old; notice has been provided to the Director; and an archiving system is in place to accurately identify the file's exact location.

Question of 25 (#23458)
In the course of an examination or investigation, the Director may do any of the following EXCEPT

prevent a licensee from traveling.

review criminal, civil and administrative history records and information.

subpoena witnesses.

require the production of documents, books and records.

The correct answer is A. In the course of an examination or investigation, the Director is authorized to review criminal, civil and administrative history information; require the production of documents, books and records; and subpoena witnesses. He does not have power to restrict a licensee's movements.

Which of the following must be licensed in Oregon?

A mortgage loan processor working for Wells Fargo Bank

A mortgage loan originator working for Mortgagors R Us

A mortgage loan processor working for Mortgagors R Us

A mortgage loan originator working for Wells Fargo Bank

The correct answer is B. Unless exempt, a person may not act as a mortgage banker, mortgage broker or loan originator in Oregon without being licensed. Persons exempt from the requirement to be licensed include a registered mortgage loan originator when acting on behalf of a depository institution. Loan processors and underwriters who are employees and not acting as sole proprietors or independent contractors are also exempt from the licensing requirements.

Penelope's mother had a very serious health issue which required Penelope to spend much of the year travelling out of state to help her mother. Consequently, Penelope was three hours short in meeting the continuing education license renewal requirements. What action can Penelope take to maintain her license?

She can borrow three hours from a friend

She can make a hardship request to the Director

She can request forbearance

She can reapply for a new license

The correct answer is B. To make up deficiencies from hardship or illness, the loan originator must submit a written request to the Director that includes a description of the hardship or illness and the reason why the loan originator was unable to meet the requirements. Upon submission of the request, the Director will make a decision as to whether and in what manner the licensee may make up his deficiency.

Tom, Nick and Terry formed a partnership in order to open TNT, a mortgage brokerage firm. Tom had been a real estate salesman for three years. Nick had been a title officer for seven years and Terry had worked in a consumer finance company for two years. Within nine months of opening their office, Nick, who served as the qualified individual, was offered a job back with the title company which he decided to accept. Will Nick's leaving affect TNT's license?

Yes, TNT will fail to satisfy the experience requirement

No, his leaving will not affect the license

Yes, the remaining partners will have to file amending documents

No, if a qualified individual is located within 60 days

The correct answer is A. TNT will fail to satisfy the experience requirement. Nick met the requirement of having three years' experience within the past five years. Neither Tom nor Terry met the requirements as Tom's experience would be credited at 1.5 years and Terry's would be credited at 1 year. TNT must satisfy the experience requirement within 30 (not 60) days, or the Director may suspend or revoke its license.

All of the following are mandatory prelicense education topics EXCEPT

appraising residential real estate.

fair lending issues.

lending standards for nontraditional mortgages.

federal law and regulations.

The correct answer is A. An individual seeking a mortgage loan originator license must satisfy the prelicensing education requirement by completing at least 20 hours of NMLS-approved course instruction, which must include three hours of federal law and regulations; three hours of ethics, including fraud, consumer protection, and fair lending issues; and two hours on lending standards for the nontraditional mortgage product marketplace. Course instruction on appraisals is not required.

An individual who takes a residential mortgage loan application or offers or negotiates the terms of a residential mortgage loan is a

mortgage lender.

loan originator.

mortgage broker.

loan processor or underwriter.

The correct answer is B. A loan originator is an individual who, for compensation or gain, or in the expectation of compensation or gain, takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan.

The Director is authorized to do all of the following EXCEPT

make, amend and rescind rules necessary to administer the mortgage laws.

retain attorneys, accountants or other professionals or specialists.

amend the Oregon Mortgage Lending Law.

establish procedures for licensing mortgage bankers or brokers.

The correct answer is C. Duties of the Director include making, amending and rescinding rules necessary to administer the mortgage laws; retaining attorneys, accountants or other professionals or specialist; and establishing procedures for licensing mortgage bankers and brokers. The Director does not, however, have the authority to amend any mortgage lending laws.

Prior to making application to renew her mortgage loan originator license, Jennie must complete how many hours of continuing education?

11 hours

8 hours

20 hours

10 hours

The correct answer is D. A mortgage loan originator must take a minimum of 10 credit hours of NMLS-approved continuing education each year.

Due to the sluggish housing market, mortgage brokers Esther and Hester decided to close down the branch office they had maintained for a number of years. Notification about the closure of the branch must be provided to the Director within how many days?

90 days

60 days

30 days

45 days

The correct answer is C. A mortgage lender, mortgage broker or mortgage loan originator must notify the Director within 30 days if a branch office is to close.

Rose and Daisy, identical twins, were both studying for their mortgage loan originator licenses. While Daisy was comfortable taking tests and always did well, Rose would get very nervous and generally fail them. To make sure her sister was able to receive her license, Daisy offered to pretend to be Rose and take the test a second time in Rose's name. What can be the consequences of this act?

Daisy could be charged with fraud

The sisters could be banned from the profession

The Director may refuse to issue the license

The sisters could be fined

The correct answer is C. An applicant that knowingly acts in a dishonest or deceitful manner in connection with the required examination is considered to have engaged in an act, practice, or course of business that operates or would operate as a fraud or deceit. In addition to other remedies available, the Director may refuse to issue the person a license as a mortgage loan originator.

Junior Jones is an experienced person who has been designated the responsibility for ensuring compliance with the Oregon Mortgage Lending Law, its rules and policies by mortgage lender Loans R Us. Junior is a

branch manager.

compliance officer.

qualified individual.

mortgage loan originator.

The correct answer is C. Every lender must designate and have in place at all times an experienced person to serve as its qualified individual, responsible for ensuring compliance with the OMLL, its rules, and policies.

Harry Hooper wants to use the assumed business name Harry's House of Lending. In order to use the name, Harry must comply with all of the following EXCEPT:

add the assumed name to its corporate bond.

register the assumed name with the Secretary of State.

place the assumed name on the client trust account.

obtain written approval from the Director.

The correct answer is D. In addition to any Secretary of State requirements for registering an assumed name, an applicant must add the assumed name to its corporate surety bond; and place the assumed name on any client trust account maintained by the licensee. Written approval from the Director must only be obtained if the name contains the words "banc," "bancorp," "bank," "banker," or "banking," "savings," "safe deposit," "trust," "trustee," "building and loan," or any equivalent term.

The SAFE Act

encourages state participation in the NMLS.

provides standards that affect uniformity, regulatory burden, consumer protection and fraud in the mortgage industry.

has provisions with which the Oregon Mortgage Lender Law's most recent amendments comply.

All of the above

The correct answer is D. The SAFE Act encourages state participation in the NMLS and provides standards to increase uniformity, reduce regulatory burden, enhance consumer protection and affect fraud in the mortgage industry. The Oregon Mortgage Lender Law was amended in 2009 to implement the SAFE Act.

A mortgage lender must notify the Director within 30 days of the occurrence of any of the following EXCEPT

the licensee's election to political office.

notification of a license revocation action taken against the licensee by any state.

a criminal conviction involving fraud or the filing of a felony indictment against a mortgage lender, or one of its officers, directors, principals, control person or experienced person.

a bankruptcy or reorganization filing.

The correct answer is A. A mortgage lender must notify the Director within 30 days of a bankruptcy or reorganization filing; being notified of the commencement of license revocation proceedings in any state; a criminal conviction involving fraud or a felony indictment against a licensee or one of its officers, directors or principals, control person or experienced person; any material litigation against the licensee; the closing of a branch office; a change in information previously submitted in an application; a change in status of an employee who is a loan originator; or the dismissal of an employee who is a loan originator due to a change in his licensing status or because of activity that would constitute grounds for dismissal. Election to political office does not require any notification to the Director.

Although his office is located in California, Rusty Carz occasionally brokers mortgage loans involving homes located in Oregon. Is Rusty required to be licensed under the Oregon Mortgage Lender Law?

No, if the purchasers are residents of California

Yes, if his commission is distributed by an Oregon closing agent

Yes, since the real estate is located in Oregon

No, if he is properly licensed in California

The correct answer is C. Any person that engages in residential mortgage transactions in Oregon as a mortgage banker or broker must be licensed or must qualify as an exempt person. Engaging in residential mortgage transactions in Oregon refers to a person conducting a mortgage banker or mortgage business involving a residential mortgage transaction originating in or directed to Oregon or real estate located in Oregon.

When the Jensen's purchased their house, the mortgage broker charged them for a survey of the property which they were told was required in order to be approved for their loan. Four years later, the Jensen's put their house on the market and decided to contact the surveyor in order to have a copy available if requested by a potential purchaser. A search of the records indicated that, not only had a survey not been done, but there was no surveyor matching the information in their closing documents. What action can the Jensen's take against the mortgage broker?

File a complaint with the NMLS

File a criminal complaint with the Attorney General

None as the limitations on filing a complaint has expired

File against the mortgage broker's surety bond

The correct answer is D. If the basis of a claim arises from the licensee making an untrue statement of material fact, omitting from a statement a material fact that would have made the statement not misleading, or not exercising care in knowing a statement was untrue, an action [against a surety bond or irrevocable letter of credit] may be commenced within three years after the residential mortgage transaction; or two years after the person bringing the action discovers the fact but, in any event, no later than five years after the date of the transaction.

Mortgage brokers, Tom and Jerry interviewed and decided to hire Perky Pye to act as a mortgage loan originator for them. In order for Perky to provide mortgage loan origination services for them, Tom and Jerry are required to

file notice with the Director.

file a W-4 with the IRS.

file a request to sponsor with the NMLS.

sign an employment contract with Perky.

The correct answer is C. All mortgage brokers or mortgage bankers employing mortgage loan originators must provide notice, in the form of a request to sponsor, to the NMLS when it authorizes a mortgage loan originator to originate mortgage loans.

A loan originator license applicant must receive a minimum score of at least ____ to pass the written exam.

70%.

65%.

80%.

75%.

The correct answer is D. A mortgage loan originator license applicant must pass a written licensing test with a minimum score of 75 percent. He may take the test three consecutive times with an interval of 30 days between each attempt. However, if he fails in all three attempts, he must wait six months before taking the test again.

An applicant for a mortgage loan originator license must do all of the following EXCEPT

submit an application.

pay a nonrefundable application fee.

obtain a $100,000 surety bond.

undergo a criminal history and credit check.

The correct answer is C. A mortgage loan originator applicant must submit an application, pay the license and NMLS application fees, submit fingerprints for a criminal record check and provide an authorization for a credit check. A loan originator must be covered by the surety bond of the mortgage lender for which he conducts mortgage business.

Mortgage broker Gabby Straw closed a residential mortgage loan in his own name. He is required to retain the same records as a

investor funding a residential mortgage loan.

mortgage broker in any transaction.

mortgage banker funding a residential mortgage loan.

consumer finance company funding a residential mortgage loan.

The correct answer is C. A mortgage broker that closed a residential mortgage loan in the name of the broker is required to retain the same records as a mortgage banker funding a residential mortgage loan.

A licensee must keep the documents from each loan application on file for ____ years from the date the loan is closed, denied or withdrawn.

one

three

five

two

The correct answer is C. A licensee must keep the documents from each loan application on file for five years from the date the loan is closed, denied or withdrawn.

Ownit Lending follows state law in using a private company to conduct the required state criminal record check on each mortgage loan originator it employs. The results must be maintained for

three years after the mortgage is no longer employed by Ownit.

four years after the mortgage is no longer employed by Ownit.

two years after the mortgage is no longer employed by Ownit.

one year after the mortgage is no longer employed by Ownit.

The correct answer is A. The result of the state criminal records check must be maintained in a secure location, separate from personnel records, for three years after termination of a mortgage loan originator's employment and then destroyed in a secure manner.

Flay Key submitted an application for a mortgage loan originator license that was missing some key information. He was notified of the deficiencies through the NMLS but failed to provide the information within 30 days. Under the OMLL, what will happen to Flay's license application?

It will remain incomplete.

It will be provisionally approved.

It will remain unapproved.

It will be considered abandoned.

The correct answer is D. An applicant who submits an incomplete application will be notified by the Director through the NMLS of the deficiencies and will have 30 days from the date of the notice to correct them and complete the application. If the applicant fails to do so, the application will be considered abandoned.

I have read the NMLS Mortgage Loan Originator T/F Testing Handbook and know the name and location of the test provider administering my test.

The correct answer is A. The NMLS Mortgage Loan Originator Testing Handbook includes full information about scheduling your test. We highly recommend you read it from cover to cover; it is available at the NMLS website NMLS Testing.

T/F I know exactly which items I can and cannot take with me to the SAFE loan originator test site.

The correct answer is A. You must take a current government-issued identification card that includes your photo and signature with you to the test facility. Acceptable ID includes driver's license, passport, military ID, alien registration card. No personal belongings will be allowed in the testing room. The test administrator will provide you with a basic calculator and scratch paper.

T/F The NMLS requires that Online Instructor-Led courses be completed with session start and end dates. Sessions can be changed ONLY for serious circumstances such as medical emergencies. I understand that there is a $50 fee for changing my session if a serious circumstance occurs and I am unable to complete within my session time frame.

The correct answer is A. NMLS requires that Online Instructor-Led courses be completed within session start and end dates. We can ONLY change a session for serious circumstances such as medical emergencies. There is a $50 fee for changing sessions, so it is important that you are enrolled in a session you know you can complete by the end date.

T/F I know how and where to obtain my NMLS unique identifier and that I must use it to register for the SAFE mortgage loan originator test.

The correct answer is A. Before registering to take your SAFE mortgage loan originator test, you will need to register with the NMLS at the NMLS website to obtain your six-digit unique identifier number. Check with your manager to determine if your company has additional requirements related to registering with the NMLS. You will need your unique identifier number by the time you finish this course so ProSchools can send NMLS your credit hours (your identification number is required to transmit your credit hours).

T/F Licenses may earn a "best efforts" fee in a loan transaction even though no loan is actually obtained for the borrower.

F

T/F Financing terms must be available to borrowers at the time they are advertised.

T

T/F Advance fees paid by a borrower must be refunded within 48 hours of rejecting a loan.

F ??72 hours

T/F Certain license funds are not considered commingled if removed from a trust account w/in 30 days.

T

T/F Making a material omission in connection with a report filed with any government agency is prohibited conduct for a licensee.

T

T/F An ad that contains a specific interest rate does not need to include and additional finance terms.

F

T/F Licensee ads may not contain the phrases "verified as eligible" or "preapproved."

F

T/F The Director may cancel a license if the licensee fails to maintain the required surety bond.

T

T/F The Director may impose a civil penalty of up to $5,000 for each violation of the mortgage laws.

T

Jeanette was a mortgage loan originator employed by mortgage broker Bennet Surf. Bennet's friend, who also owned a brokerage, called asking if Bennet could suggest someone who could fill in temporarily while the mortgage loan originator who worked for him took maternity leave. Bennet asked Jeannette if she would be interested and she agreed to work for both brokers during the time the other mortgage loan originator was out. Is this permissible?

Yes, since it was a temporary position

Yes, since Jeanette had her mortgage broker's approval

No, it is prohibited

No, unless the other broker files a sponsorship request

The correct answer is C. It is prohibited for a mortgage loan originator to be employed by or to originate loans for more than one mortgage banker, mortgage broker, mortgage lender, or independent mortgage agency at the same time.

Babee Blue services the loans held by her employing mortgage banker. She is required to provide each borrower with an annual statement showing for the preceding 12 months all of the following EXCEPT:

the unpaid principal balance of the mortgage loan.

A. B. C. the interest paid.

amounts deposited to and disbursed from escrow during the statement period.

the financial institution in which escrow funds are held.

The correct answer is D. It is a dishonest, fraudulent, or illegal practice for a licensee to fail to provide a borrower with an annual statement showing for the immediately preceding 12 months: the unpaid balance of the mortgage loan; the interest paid; amounts deposited into escrow; and amounts disbursed from escrow during the statement period.

As part of her responsibilities, mortgage broker Gelli Bean maintains the books and records relating to the company's client's trust account. As such, she must all of the following EXCEPT:

maintain a subsidiary ledger for each account.

file a report with the Director.

maintain a list of every employee with signatory authority.

reconcile the account.

The correct answer is B. For each of its trust accounts a mortgage banker or mortgage broker must maintain books and records; reconcile the account at least monthly and sign and date the reconciliation upon its completion; set up and maintain a subsidiary ledger for each trust account, showing receipts and disbursements and maintaining a running total of every transaction pertaining to the trust account; and maintain a list of every employee who has signatory authority to disburse funds held in the trust account and the date his authority begins and ends.

The Director may cancel a mortgage lender's license for any of the following reasons EXCEPT if the person

has filed for personal bankruptcy.

cannot be located after a reasonable search.

has ceased doing business as a mortgage banker or mortgage broker.

has failed to maintain the required surety bond or irrevocable letter of credit.

The correct answer is A. The Director may cancel a mortgage license if he finds that the applicant or licensee has ceased doing business as a mortgage banker or mortgage broker; has failed to maintain the required surety bond or irrevocable letter of credit; or cannot be located after a reasonable search.

Xena is obtaining a mortgage for the purchase of a first home by Hercules. What is the maximum interest rate allowed on the loan?

The percentage available and that Hercules will accept

9%

8%

10%

The correct answer is A. Oregon has a statutory interest rate of nine percent. However that limitation is not applicable to any loan secured by a first lien on real property or made to finance the acquisition of real property and secured by any lien on that property.

Jerome negotiated a loan that would require a prepayment penalty for the term of the loan rather than a fixed period of time. He failed to provide the required written prepayment notice to the borrowers before the closing of the loan. Jerome's actions are

negligent.

dishonest, fraudulent, or illegal.

incompetent.

acceptable.

The correct answer is B. A licensee is guilty of engaging in dishonest, fraudulent, or illegal practice or conduct if it negotiates a residential loan agreement that includes a provision for a prepayment penalty without providing a written notice to the borrower that says "Notice to Borrower: Do not sign this loan agreement before you read it. This loan agreement provides for the payment of a penalty if you wish to repay the loan prior to the date provided for repayment in the loan agreement."

The Director may cancel an application or license if he determines that the following circumstances apply to the applicant or licensee EXCEPT

the applicant or licensee cannot be located after a reasonable search.

the applicant or licensee has failed to update information in the NMLS as required.

the applicant or licensee has ceased doing business as a mortgage baker or mortgage broker.

the applicant or licensee has failed to maintain the required corporate surety bond or irrevocable letter of credit.

The correct answer is B. The Director may cancel an application or license if he determines that the applicant or licensee has ceased doing business as a mortgage banker or mortgage broker; cannot be located after a reasonable search; or has failed to maintain the required corporate surety bond or irrevocable letter of credit.

A mortgage broker or mortgage lender licensee may not make a false statement in a filing with the Director or during an investigation conducted by the Department or another government agency, or knowingly or willfully make any omission of a fact which is

important.

obtainable in writing.

material.

verifiable.

The correct answer is C. A mortgage broker or mortgage lender licensee may not make any false statement, or knowingly and willfully make any omission of a material fact, when filing a document or report with the Director or the NMLS or during an investigation conducted by the Department or another government agency.

A mortgage lender must reconcile a trust account at least

monthly.

daily.

quarterly.

annually.

The correct answer is A. A mortgage lender must maintain books and records for each trust account. It must reconcile a trust account at least monthly so that the reconciled bank balance equals the sum of balances in the individual owner's ledger accounts and the balance in the trust account check register or journal of receipts and disbursements.

A mortgage licensee may

solicit, advertise or contract for specific financing as long as the terms may be reasonably available in the near future.

operate an unlicensed mortgage lending business for 30 days during the grace period.

maintain a separate client trust account for a branch office.

provide required disclosures by referring the applicant to websites and legal citations.

The correct answer is C. A mortgage loan originator may not solicit, advertise or contract for specific financing terms unless the financing terms are available to a borrower at the time; operate a business that requires a mortgage loan originator license without holding a valid license; or fail to disclose or provide information required by Oregon mortgage law or other state or federal laws, rules or regulations, including certain prescribed notices. A licensee is permitted to maintain a separate trust account for a branch office.

Abby Normal is preparing the final Truth in Lending disclosure to be given to the Frankensteens. She will show the commissions involved with the transaction as part of the

costs paid outside closing.

third-party costs.

principal.

interest.

The correct answer is D. Any commission, bonus, fee, premium, penalty or other charge, compensation, or gratuity paid by the borrower as a consideration, compensation, or inducement for obtaining a loan will be deemed as part of the interest charged on the loan.

When Muny Baggs proofs an advertisement he intends to run in the local newspaper, Muny always check to make sure his name on file with the Director is present and also his

NMLS number.

Oregon-issued license number.

principal office address.

his toll-free telephone number.

The correct answer is B. All advertisements used by a mortgage lender or loan originator must contain the licensee's Oregon-issued license number, name or assumed business name which is on file with the Director.

It is a violation of the Oregon Mortgage Lender Law to engage in mortgage lending activities without a valid license. A person or entity that engages in such activities may be fined up to $______ for each day the violation occurs up to a maximum of $______.

$2,000; $10,000

$1,000; $5,000

$3,000; $15,000

$5,000; $20,000

The correct answer is D. The Director may impose a civil penalty of up to $5,000 for each separate violation of the Oregon Mortgage Lender Law or a rule or order of the Director. Each violation is a separate offense, subject to a separate penalty, and each day the same violation occurs is a separate violation. A violation that continues for more than one day is a continuing violation, subject to a maximum penalty of $20,000.

The unique identifier of a residential mortgage loan originator must be clearly shown on all of the following EXCEPT

e-mails to co-workers.

residential mortgage loan application.

business cards.

advertisements.

The correct answer is A. A licensed mortgage loan originator must display his unique identifier on any residential mortgage loan application, solicitation, advertisement, promotional material or website he uses in connection with his business. There is no requirement to place the unique identifier on e-mails to co-workers.

Ripoff Mortgage Broker received notice on December 20 from the Director of the filing of an order revoking their license for violations of the Oregon Mortgage Lending Law. Ripoff decided to ignore the notice and let their license expire on December 31. What can the Director do in this situation?

Maintain Ripoff's license in an active state until the matter is finalized

Revoke their license

Nothing as the license will no longer be active

Request assistance from a court

The correct answer is B. The Director may enter a final order revoking a license, even if it has expired, if the initial order of revocation was issued prior to the license expiration date.

Done Quick Loans hired several additional mortgage loan originators during the previous calendar year and increased the number of loans they were able to obtain and close. Although the additional loans required Done Quick to increase their surety bond, they failed to do so. As the bond covering the mortgage loan originators was inadequate, the Director

inactivated all mortgage loan originator licenses.

instituted a forced placement of the required surety bond.

suspended Done Quick's license.

fined Done Quick.

The correct answer is A. The Director may place a loan originator's license in an inactive status if he finds that the loan originator is either not covered, or is insufficiently covered, by a corporate surety bond. With subsequent evidence of acceptable coverage, the Director will return the license status to "approved."

An individual may not be employed by a mortgage banker or mortgage broker as a loan originator for all of the following reasons EXCEPT

he was convicted of violating any of the mortgage rules.

he failed his licensing test six times.

his employment violates conditions imposed on his license for violations of the OMLL.

his license was suspended by the Director.

The correct answer is B. An individual may not be employed by a mortgage banker or mortgage broker as a loan originator if he was convicted of violating any of the mortgage rules; the Director has suspended his license or prohibited his employment as a loan originator; his employment violates conditions imposed on his license by the Director for violations of the OMLL; or his employment violates an order of the Director, a state or federal agency or a court of law.

The Nerdles have written a check to the Happy Housing mortgage brokerage to cover expected third-party costs. Prior to accepting the check, their mortgage broker gave them a list allowing a choice of the type of account they wanted their money to be placed in. This list included all of the following EXCEPT:

a federally insured interest-bearing account.

the brokerage's business account.

a noninterest bearing account.

a neutral Oregon escrow depository.

The correct answer is B. The parties having an interest in any trust funds may choose how the funds are to be held. They may be placed in a noninterest-bearing account; federally insured interest-bearing account (the interest may not benefit the licensee unless agreed to in writing before the funds are deposited); or in a neutral Oregon escrow depository.

Trex Mortgage Lenders require loan applicants to pay for services in advance. As such, Trex is permitted to

maintain a separate trust account for prepayments.

maintain a separate journal for prepayments.

place the prepayments in their business account.

maintain an account at a neutral escrow depository.

The correct answer is A. If a licensee requires its loan applicants to pay for services in advance, it may maintain a separate escrow account for prepayments. The prepaid funds must remain in the trust account until either the services are performed or the loan is rejected.

Mortgage broker Gary Greedie had not been careful with his money and now had several garnishments attached to his business checking account. When he received his next commission, he placed in his client's trust account instead of his business account. Is Gary permitted to do this?

No, it is a prohibited act

Yes, as long as he clearly identifies the deposit in his ledger journal

No, as he is scamming his creditors

Yes, he is the signor on both accounts so it is permitted

The correct answer is A. Trust funds are not subject to execution or attachment for any claim against the mortgage banker or mortgage broker. As such, it is prohibited to keep any funds or money other than actual trust funds in a trust account.

A person may use a certification or professional designation

if the designation is a degree or certificate evidencing completion of an academic program at an institution of higher learning.

to enhance his advertising appeal.

obtained from an organization primarily engaged in the business of sales and marketing instruction.

that is self-conferred.

The correct answer is A. A mortgage licensee may not use a certification or professional designation to indicate or imply that it has special certification or training it does not have. Conduct of this type is dishonest, fraudulent and illegal when used in connection with residential mortgage loan business activities. A person may, however, use a job title, degree or certification to indicate seniority or standing within an organization or to indicate an individual's area of specialization within an organization. A degree, certificate or designation evidencing completion of an academic program at an institution of higher education may also be used.

A licensee can freely use which of the following in advertising?

The phrase "wholesale rates"

The word "preapproved"

The phrase "verified as eligible"

The licensee's assumed business name

The correct answer is D. All advertisements a licensee uses must contain the licensee's Oregon-issued license number, name or assumed business name on file with the Director. An advertisement may not use certain words or phrases, including "wholesale rates," "preapproved" or "verified as eligible."

So long as the funds are removed from the account within 30 days, it not considered to be prohibited commingling of funds if a licensee deposits which of the following into a client trust account?

Earned interest income due the licensee

Fees due the licensee

Both A and B

None of the above

The correct answer is C. A licensee may not commingle in a client trust account trust funds received and the licensee's personal funds. However, it is not considered commingling if the funds are earned interest income which has not been transferred but is accruing to the licensee based on a written agreement with the client or they are fees earned by the licensee but not yet transferred. Such funds must be removed from the account within 30 days.

Landem Loans opened a branch office in a community that was 55 miles from the principal office. Landem felt it was impractical to attempt to physically transport every client's trust account deposit made at the branch to the principal office in a timely manner. To meet state requirements for depositing, Landem opened a separate client's trust account for use by the branch office. By doing so, Landem has accepted responsibility for

balancing the branch client's trust account.

maintaining a separate set of ledgers for the branch office.

supervision and oversight of the branch office trust account.

designating a responsible person to handle the client's trust account.

The correct answer is C. If a branch office maintains a separate client trust account, a separate bookkeeping system must also be maintained at the branch office with copies of all documents showing deposits into and withdrawals from the trust account provided to and maintained at the main office of the licensee. The licensee is responsible for supervision and oversight of the branch office trust account or escrow deposit activities.

Before a closing can be scheduled, mortgage broker Bill Bosco requires that each file is carefully checked to ensure the disclosures have been provided as required under which federal law?

Reals Estate Settlement Procedures Act and Regulation X

Truth in Lending Act and Regulation Z

Fair Credit Reporting Act

Equal Credit Opportunity Act

The correct answer is B. Prior to closing a mortgage loan or mortgage banking loan, the mortgage licensee must make disclosure required under the Truth in Lending Act and Regulation Z.

A negative ____________ loan is a mortgage loan under which a borrower's scheduled payment is insufficient to pay the accruing interest on the loan.

amortization

Among the services which a foreclosure consultant may offer a homeowner is a ____________ from a beneficiary or mortgagee.

forbearance

In an equity conveyance transaction, an equity purchaser must timely record the ____________ of agreement.

memorandum

Any person maintaining a consumers' personal information must develop and maintain reasonable ____________ to protect the security, confidentiality and integrity of the personal information.

safeguards (These are means of protection.)

BilkU Mortgage Lenders were investigated by the Attorney General at the request of the Division of Finance and Corporate Securities after a number of complaints were received from consumers that they were not being given the required cancellation information when signing an equity conveyance contract, an unlawful trade practice. After notification from the Attorney General, BilkU must do what in order to avoid further prosecution?

Make restitution to the affected parties

Execute and deliver an assurance of voluntary compliance

Cease entering equity conveyance contracts

Request a hearing

The correct answer is B. After receipt of notification of the violation, the person must, within 10 days, execute and deliver an assurance of voluntary compliance, setting out what actions, if any, he intends to take with respect to alleged unlawful trade practices.

If a property is resold within _____ after an equity seller enters into an equity conveyance contract, the equity purchaser must pay the seller an amount equal to at least 82 percent of the equity recapture payment from the resale.

36 months

24 months

12 months

6 months

The correct answer is B. If a property is resold within 24 months after an equity seller enters into an equity conveyance contract, the equity purchaser must pay the seller an amount equal to at least 82 percent of the equity recapture payment from the resale.

All of the following are considered professional real estate activities when performed for compensation EXCEPT

performing inspections upon real estate.

managing real estate.

listing real estate for sale.

performing real estate marketing activities.

The correct answer is A. A person engages in professional real estate activity when for compensation, or with the intention or expectation of receiving compensation, the person, among other activities, lists or offers, attempts or agrees to list real estate for sale; engages in the management of real estate; or performs real estate marketing activities. Performing home inspections is not a professional real estate activity.

Foreclosure consultant Sylvan Glade was a partner, along with a contractor, and a real estate broker, in the Woodland Investment Group. Woodland purchased homes in foreclosure prior to a court-ordered sale. The contactor would do whatever repairs or renovations necessary and the real estate broker would list the home and place it on the market. Is this a permitted activity on Sylvan's part?

Yes, as long as she was fulfilling her contract to assist the homeowners

Yes, provided the homeowner was informed she was a partner in Woodland

No, unless approved by the Director

No, this is a prohibited act

The correct answer is D. It is prohibited for a foreclosure consultant to, directly or indirectly, acquire an interest in a residence in foreclosure or default from the homeowner with whom the foreclosure consultant is working. This includes any interest transfer which may occur through a member of the foreclosure consultant's family or through a subsidiary, affiliate, or related entity to which he or a member of his family is a primary member, shareholder, or owner.

Which of the following is a negative amortization loan?

A $35,000 loan in which the loan balance, together with all mortgage loans secured by the same property, and the value of the property have a loan-to-value ratio of 45 percent

A loan with a term of 12 months on which the borrower pays interest only when the entire loan balance comes due

A loan on which a borrower's scheduled payments do not cover the accruing interest on the loan

A reverse mortgage

The correct answer is C. A negative amortization loan is a mortgage loan or mortgage banking loan under which a borrower's scheduled payment is insufficient to pay the accruing interest on the loan. Such a loan does not include a bridge loan, which has a term of less than 18 months and on which the borrower must pay only interest until the entire unpaid loan balance comes due; a mortgage loan in which the principal amount is less than $50,000 and the balance of the loan, combined with all mortgage loans secured by the same property, and the value of the property has a loan-to-value ratio of not more than 50 percent; or a reverse mortgage.

Which of the following would be considered a foreclosure consultant?

An attorney providing his client with advice about his debts

A financial advisor who, for compensation, promises to assist a homeowner in obtaining a loan

A mortgage broker who discusses refinancing options with a homeowner facing foreclosure

A state-regulated bank offering consultation to a client facing foreclosure

The correct answer is B. A foreclosure consultant is a person that, directly or through association with another, makes a solicitation, representation or offer to a homeowner to, in return for compensation from the homeowner,perform a service resulting in, among other actions, assistance to the homeowner in obtaining a loan or advance of funds. Not included in the definition of a foreclosure consultant is an Oregon-licensed attorney, if performing services within an attorney-client relationship; a state- or federally regulated bank, trust company, savings and loan association, credit union or insurance company; and an Oregon-licensed mortgage banker or mortgage broker.

Strong Armor attempts to enforce an obligation that is owed or due to any commercial creditor by a consumer as a result of a consumer transaction. Strong is a

mortgage servicer.

foreclosure consultant.

debt consultant.

debt collector.

The correct answer is D. A debt collector is any person who, by any direct or indirect action, conduct or practice enforces or attempts to enforce an obligation that is owed or due to any commercial creditor by a consumer as a result of a consumer transaction.

Pan Piper has entered into contract with the Rizzos that will transfer the interest in the Rizzos' residence to Piper allowing Piper to obtain legal or equitable title to all or part of the residential property. Pan Piper is a

equity seller.

loan modification consultant.

equity purchaser.

foreclosure consultant.

The correct answer is C. An equity purchase is a person that enters into an equity conveyance that transfers to it an interest in residential real property sufficient to allow it to obtain legal or equitable title to all or part of the property.

All of he following public records are exempt from disclosure unless it can be shown that disclosure in a particular instance is in the public interest EXCEPT

information provided by participants in a mediation.

information relating to the appraisal of real estate before its acquisition.

a personnel discipline action.

records pertaining to litigation to which a public body is party once litigation is concluded.

The correct answer is D. Under Oregon law, every person has a right to inspect any public record of a public body. However, certain public records are exempt from disclosure unless it can be shown that disclosure in a particular instance is in the public interest, including records pertaining to litigation to which a public body is a party if the complaint has been filed or prior to a complaint being filed, if a filing is likely to occur. This exemption does NOT apply to litigation which has been concluded. Other records which are exempt include information relating to the appraisal of real estate prior to its acquisition; a personnel discipline action, or materials or documents supporting that action; and data and information provided by participants in a mediation.

A copy of a foreclosure consulting contract must be provided to the homeowner at least ______ before the contract is signed.

48 hours

three business days

24 hours

three calendar days

The correct answer is C. A written foreclosure consulting contract is required for any services that a foreclosure consultant provides to a homeowner, and a copy of the contract must be provided to the homeowner at least 24 hours before it is signed.

Under the Unlawful Trade Practices Act, a person who solicits potential customers by telephone or door to door must provide his identification and who he represents

at any point before ending the conversation.

within 30 seconds after beginning conversation.

within five minutes after beginning conversation.

within two minutes after beginning conversation.

The correct answer is B. Under the Unlawful Trade Practices Act, a person who solicits potential customers by telephone or door to door must, within 30 seconds after beginning conversation, provide his identification and who he represents; explain the purpose of his call; provide a clear and understandable description of the goods or services offered for sale; and inquire whether the person being solicited is interested in listening to a sales presentation and, if not, immediately discontinue the solicitation.

When mortgage lender Barton Townes prepares a foreclosure notice, he is required to include all of the following information EXCEPT:

the statewide telephone number for handling consumer inquiries.

the name of the party that will be conducting the foreclosure sale.

the telephone number for the Oregon State Bar's Lawyer Referral Services.

the web address for the Oregon State Bar.

The correct answer is B. A foreclosure notice form must include the following information: the statewide telephone contact number for handling consumer inquiries, including those related to mortgage foreclosure; the telephone number for the Oregon State Bar's Lawyer Referral Service; and the Oregon State Bar, information and a directory of legal aid programs, and information on federal loan modification programs.

The Whales had entered a foreclosure consulting contract with Amber Gris. They subsequently decided to cancel the contract. Prior to the contract cancellation, Amber had ordered a title report, and requested a realtor to perform a broker's price opinion for a total of $250 in expenditures. The Whales will have how many days from the date of cancellation to reimburse Amber for the moneys she advanced.

14 days

60 days

30 days

90 days

The correct answer is B. Upon cancellation, a homeowner has up to 60 days to pay for any services performed in good faith under the contract and/or to repay any moneys paid or advanced under the contract by the foreclosure consultant. If allowed under the contract, the homeowner must also pay up to nine percent interest per year on amounts owing.

A foreclosure consultant may

take a wage assignment for the payment of compensation.

receive compensation from a third party for arranging entry into an equity conveyance by the homeowner with whom the consultant is working.

acquire an interest in a residence in foreclosure from the homeowner with whom the consultant is working.

take a power of attorney from the homeowner for the purpose of obtaining documents.

The correct answer is D. It is prohibited for a foreclosure consultant to take a wage assignment, lien on real or personal property or other security for the payment of compensation; directly or indirectly acquire an interest in a resident in foreclosure or default from the homeowner with whom the foreclosure consultant is working; receive compensation from a third party for facilitating or arranging for entry into an equity conveyance by the homeowner with whom the foreclosure consultant is working; or take a power of attorney from a homeowner, EXCEPT for the purpose of obtaining or inspecting documents.

The Deckards entered into a foreclosure consulting contract with Perry Winkle. After consulting with their lender, they believe they will be able to modify their loan without any assistance from Perry and have decided to cancel their contract. The Deckards can cancel their contract in any of the following manner EXCEPT

telephoning Winkle .

e-mailing it to Winkle's e-mail address.

faxing it to Winkle's fax number.

mailing it to Winkle's the physical address.

The correct answer is A. A homeowner may cancel a foreclosure consulting contract at any time by giving written notice of the cancellation to the foreclosure consultant at a physical address specified in the foreclosure consulting contract; at a facsimile number or at an e-mail address specified in the foreclosure consulting contract.

One-Stop Mortgage Lending received notice from the company that maintained their offsite computer records that the system had been breached and the personal information of their customers was now compromised. One-Stop must alert their customers within how many days of confirmation the breach occurred.

Within five days

Within 72 hours

Within seven day

As soon as possible and without unreasonable delay

The correct answer is D. The disclosure notification must be made as soon as possible and without unreasonable delay. Timing of the notification may take into account the legitimate needs of law enforcement in order not to compromise any investigation.

May a debt collector write to a debtor at his place of employment without the debtor's permission?

No, not under any circumstances

Only if the envelope does not reveal the communication is from a debt collector

Only if no home address is reasonably available

Both B and C

The correct answer is D. While collecting or attempting to collect a debt, it is prohibited for a debt collector to communicate without the debtor's permission or threaten to communicate with him at his place of employment. However, the debt collector may write to the debtor at his place of employment if no home address is reasonably available and the envelope does not reveal that the communication is from a debt collector.

When meeting with the Canyons, equity purchaser Joshua Tree failed to deliver the required cancellation notice along with the equity conveyance contract. How long do the Canyons have to cancel their contract?

24 hours from the delivery of the contract

Three day from delivery of the contract

Three days from the delivery of the cancellation form

Five days from delivery of the contract

The correct answer is C. The period during which the equity seller may cancel the equity conveyance contract does not commence until he has been provided with the cancellation form.

An equity seller may cancel an equity conveyance contract before the earlier of a foreclosure sale of the residence in foreclosure or midnight of the ____ business day after the equity seller signs a document transferring an interest in the residence in foreclosure.

third

tenth

fifth

seventh

The correct answer is A. An equity seller may cancel an equity conveyance contract before the earlier of a foreclosure sale of the residence in foreclosure or midnight of the third business day after the equity seller signs a document transferring an interest in the residence in foreclosure.

For purposes of a breach of security, personal information is defined as a consumer's first name and/or initial and last name in combination with any of the following EXCEPT

address and telephone number.

passport number.

financial account number.

driver's license number.

The correct answer is A. Personal information is defined as a consumer's first name and/or initial and last name in combination with one or more of elements which include the consumer's Social Security number; driver's license number or state identification number issued by the Department of Transportation; passport number or other United States-issued identification number; financial account number, credit or debit card number in combination with any code or password that would permit access to a consumer's financial account; or any combination of information sufficient to permit a person to commit identity theft.

Signed and Sealed Mortgage Brokers worked with an information security consultant to ensure their system had the reasonable safeguards necessary to protect the personal information of applicants and borrowers. As part of their safeguards Signed and Sealed also established procedures for

providing notice in case of a breach.

disposing of the data.

encrypting the information.

training protocols for employees accessing the information.

The correct answer is B. Any person maintaining consumers' personal information in the course of its business must develop, implement, and maintain reasonable safeguards to protect the security, confidentiality, and integrity of the personal information, including the manner in which it disposes of data.

Jacob Marlee is brokering a mortgage loan that is considered a negative amortization loan under state law. If the loan includes a prepayment penalty, what is the maximum time period in which it is allowed?

48 months

36 months

24 months

12 months

The correct answer is C. A negative amortization loan may not contain a prepayment penalty beyond the first 24 months after the date on which the loan is made.

A foreclosure consulting contract which contains a provision requiring a homeowner to waive any of his rights under the Mortgage Rescue Fraud Prevention Act

must be notarized.

must be given to the homeowner at least 48 hours before it is signed.

requires the homeowner to undergo financial consultation before signing.

is void.

The correct answer is D. A foreclosure consulting contact is void if it contains a provision requiring the homeowner to waive any of his rights under the Mortgage Rescue Fraud Prevention Act.

The Bevas noticed a piece of property that was vacant. They liked to location and were interested in ascertaining whether or not it might be available for purchase. As there were no real estate signs, or any other indication of who held the property, the Bevas went to the county recorder's office to research records to see who held the deed. Are the Bevas allowed to do this?

No, there is no indication the property may be available

No, property records are confidential information

Yes, public records can be inspected by anyone

Yes, since the property is vacant

The correct answer is C. Under Oregon law, every person has a right to inspect any public record of a public body. A public record is any writing or sound recording that contains information relating to the conduct of the public's business including court records, mortgages and deed records that are prepared, owned, used or retained by a public body.

Mortgage broker Sergio Mendoza is fluent in Spanish and often assists in negotiating mortgage loans for borrowers who are more comfortable speaking Spanish. When working with a borrower with whom he has communicated in Spanish, Sergio is required to provide all of the following materials in both English and Spanish EXCEPT:

disclosures required under TILA and Regulation Z.

the HUD-1a Settlement Statement.

a statement that loan transaction documents will be in English and the borrower may need assistance with translation.

a Good Faith Estimate as required under RESPA and Regulation X.

The correct answer is B. If a licensee advertises or solicits business and subsequently negotiates or offers to negotiate a residential mortgage transaction in a language other than English, the licensee must give the following materials to the borrower in both English and the other language: a Good Faith Estimate as required under RESPA and Regulation X; disclosures required under TILA and Regulation Z; and a statement that loan documents will be in English and that the borrower should obtain assistance with any translations, if necessary.

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