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Florida Residential Mortgage LIcense
Terms in this set (144)
Anti - coercion law
What law prohibits a lender from requiring mortgage insurance through any agent or company?
Who supervises all activities of the OFR?
Mostly fraud related activities
What are examples of prohibited practices under Chapter 494?
A person exempt from licensure under the law.
Who can a fee or commission related to a mortgage loan transaction be paid to under chapter 393?
The nature of the relationship, ownership, or financial interests.
The estimated charge.
The financial benefit.
That alternative sources may be chosen by the borrower.
The licensee or their relative owns or controls 10% or more of any class of equity securities in person prov. services
What disclosures need to be provided to the borrower in the case of a conflict of interest?
additional products or services are provided by the licensee or licensee's family member.
1% is the key figure of ownership.
In what cases would a licensee have a conflict of interest?
in a central location and in an alphabetical or numerical sequence.
How are files for each mortgage transaction to be maintained by mortgage brokers?
mortgage broker agreement
copy of signed closing statement or
documentation of denial or cancellation
What must each mortgage brokerage file contain?
A copy of the written commitment issued by the mortgage broker, AND a copy of the written commitment provided by the lender.
If the mortgage broker issues a written commitment for the loan on behalf of the lender, what must be maintained in the file?
Name of applicant
Date of application
Disposition of the mortgage loan application
Name of lender, if applicable
What must the journal of mortgage brokerage transactions include?
A copy of the GFE
Copy of the closing statement or documentation
demonstrating that the application was cancelled
Copy of a lock-in agreement
Copy of a written commitment
Copy of written disclosures of a conflict of
What must mortgage lender files include? (not brokers)
As soon as practical, but no later than 30 business days after the date of closing.
Within how many days must a mortgage assignment be recorded?
It must insure the non-institutional investor against the "unmarketability" of the mortgage interest in the property.
It must specify any superior liens that exist against the property.
If a title insurance policy is issued, what must it include?
Loans of of $1000 or less = $250
Loans between $1K and $2K = $250 for the first $1k
and $10 for each additional $100.
Loans between $2K and $5K = $350 for first $2K
plus $10 for each additional $100
Loans greater than $5K = $250 plus 10% of the entire mortgage loan.
What are the maximum fees for mortgage loans.
Loans of $5760 and over, divide the gross proceeds by 11 and add $227.27
What is the maximum commission for a loan?
The percentage of downpayment required
That a higher rate or points could be required
That restrictions as to the maximum principal amount of the loan offered could apply.
It is a violation of the law for any person to advertise that an applicant will have unqualified access to credit without disclosing what material limitations on the availability of credit exist.
What do this limitations include? (but not limited to)
That the rate could change or not be available at commitment or closing.
If a specific interest rate is advertised, what else must be disclosed?
Is it okay for lenders to advertise mortgage loans and rates if it is not available to a reasonable number of qualified applicants?
For how long must advertisements and scripts be maintained?
Within how many days at the end of the fiscal year must the audited financial statements be submitted?
The financial services commission.
Who appoints the director of the OFR?
At the foreclosure sale
When does equitable right of redemption end?
A "notice of non-compliance" issuance.
Failure to keep a mortgage transaction journal will result in what penalty for the first offense?
What dollar amount change in fees would be considered material?
Net proceeds of the loan
Are maximum commissions from a loan based on net proceeds of the loan, or net total from the GFE?
Florida law requires a licensee to keep records of a mortgage transaction for how long?
General provisions as they apply to mortgage professionals.
Part 1 of Chapter 494.
Florida laws applicable to mortgage brokers and loan originators.
Part 2 of Chapter 494.
relates to mortgage lenders.
Part 3 of Chapter 494
Does a branch manager of a broker shop have to be licensed?
A statement by the lender setting forth the terms and conditions upon which the lender is willing to make a particular mortgage loan to a particular borrower.
Define: Loan commitment
Compensation from any source received by a mortgage broker acting as a loan originator.
Define: Loan origination fee
Spouse, father, mother, children, brothers, sister.
Spouses father, mother, brothers, sisters,
Spouses of person's children, brothers, or sisters.
Who is considered to be a relative by definition?
Authorizing a mortgage lender to service a loan for more than four months.
Define: Servicing endorsement
Chapter 673 - Uniform Commercial Cod
Chapter 697 - Instruments Deemed Mortgages
and the Nature of a Mortgage
Chapter 712.26 - Waiver of Release of Liens
Chapter 687 - Lending Practices
Chapter 120 - Administrative Procedures Act
What are the other state laws and regulations that are important for this test?
Form used by business entities seeking a license
Form used by Individuals seeking a license
Form used to open a branch office
Form used by individuals seeking a license as an MLO
If somebody has unpaid medical expenses, will that hinder him from getting a license?
3 years for foreclosure.
1 year for bankruptcy.
5 years for foreclosure for a broker.
Within how many years will a foreclosure prevent somebody from getting an MLO license?
60 days, 120 days
How many days does a mortgage lender have to satisfy net worth requirements? How many days if the licensee notifies the Office?
10 years... "account for all time"
For how many years must an applicant for an MLO license provide employment history?
How many days does a licensee have to report convictions or pleas of "no contest"?
Within 30 days or within two business days after the date the licensee first received the notice of change.
Within how many days must each licensed mortgage broker which proposes to change any of the control persons listed on the initial application file an amendment through the NMLS?
$375, plus $100 for the trust fund and $25.25 for further background checks.
How much does it cost to renew a mortgage broker license?
$475 plus $100 for the Trust Fund.
How much does it cost to renew a mortgage lender license?
$260, which inclues a $150 renewal fee
How much does it cost to renew a loan originator licnese?
3 business days
If a licensee notifies the Office that it will maintain the books, accounts, and records at a location other than the principal place of business, within how many days must the licensee make the books available for review?
A "notice of noncompliance" for the first offense and $500 fines for each additional offense.
What is the penalty for maintianing books at a location other than the principal place of business?
A fund that ensures payment to consumers who suffer a financial loss due to fraud or deception on behalf of a mortgage oranginator. $20 for each individual
What is the Mortgage Guaranty Trust Fund? How much per individual?
Each individual licensee is required to pay $__
into the fund, and each mortgage brokerage and
mortgage-lending business will be required to pay
$___ into the fund. This fee is in addition to the
regular application fee. Collection continues
annually until the fund reaches $_ million at
which time the collection fee will be discontinued.
Following discontinuation, the fee is not re-imposed until the fund's value drops below $_ million.
Mortgage broker agreement
Copy of a signed closing statement or
documentation of denial or cancellation of the
mortgage loan applciation
What must each file for a mortgage transaction contain?
Failure to update the transaction within how many business days will result in disciplinary action?
3 business days
When must the licensee notify the borrower of material changes in the closing statement?
Administrative Procedures Act
Which act has to do with notifications, hearings,
What number of days is relevent to the Administrative Procedures Act?
Notice of noncompliance
What is the order of penalities for violation of Ch. 494?
What is the maximum fine for a violation of Ch. 494 laws?
$1,000 per day up to $25,000
What is the daily fine for an unlicensed person acting in the capacity of a licensee?
3 occurences and a percentage greater than or equal to 20% of the files examined.
What is the definition of "numerous instances" of incomplete files for brokers?
First, a notice of non-compliance and then a $500 fine for every subsequent instance.
What is the penalty for non-compliance with the journal laws?
Prison term up to five years and up to a $5000 fine.
What is the penalty for a third degree felony?
30 years of prison and up to $10,000 in fines.
What is the penalty for a first degree felony?
A law that provides an exemption from property taxes, which is deducted from a property's assessed value if the owner qualifies.
What is the Homestead Exemption Law?
By March 1st
When must applicants file for the Homestead Exemption Law?
The lender must not require the applicant to get a particular type of mortgage insurance through a particular company
What is Florida's Anti-Coercion Law?
Is Florida a title theory or lein theory state?
The OFR (The Office of Financial Regulation) AKA The Office.
They are responsible for overseeing banks, credit unions, savings associations, etc. also licenses and
What is the regulatory authority in the state of Florida and what is it responsible for?
The Financial Services Commission (The Commission)
Members that make up The Commission include: The Governor, Attorney General, Cheif Financial Officer and Commissioner of Agriculture Commission
Who is the head of the OFR and the Office of Insurance Regulation.
Who is involved?
For final approval and adoption of rules developed by each Office.
What is the Commission responsible for?
3 Divisions, and 1 Bureau:
Division of Financial Institutions: Oversees banks, credit unions, non-depository trusts.
Division of Finance: Protects by licensing and regulating
Division of Securities :Protects the investigating public from unlawful securities activities.
Bureau of Financial Investigations: Conducts financial investigations into suspected fraudulent and unlicensed activity.
How is the OFR broken down?
Require compliance with Florida slate laws
Issue mortgage lending licenses
Approving licenses and continuing education courses for mortgage lenders
Monitor licensee behavior
Issue and serve subpoenas and subpoenas to produce evidence
Conduct investigations into possible violations
What is the commissioners duties?
Individual, partnership, or corporation, or trust that has the power to direct the management and
policies of a company(10%)
Define: Control Person
In house is an employee of Mort. Broker or Mort. Lender who ONLY engages in Loan Processing.
Contract LP is and independent contractor of a MB or ML that is LICENSED as a Loan Orig. and ONLY engages in LP.
What is the difference between a In House Loan Processor and a Contract Loan Processor?
A change that would be important to the borrower as far as their decision making.
1. A change in the interest rate previously offered.
2. A change in the type of loan offered
3. A change in fees to be charged, resulting in total fees greater than $100.
Define Material Change and 3 examples
What is a Loan originators Initial Licensing fee?
Cannot collect more than $50,000 from the fund for any claim. claims against any one license cannot exceed $250,000
Borrowers seeking recovery for actions on the Mort Guar. Trust Fund cannot collect more than ($ amount).
Claims against any one license may not exceed
Seeking an endorsement - $250,000
Not seeking an endorsement - $63,000
What are the minimum net worth requirements for:
1. seeking an endorsement
2. not seeking an endorsement
Lender must notify the Office within 2 days and immediately stop taking new loan applications.
If the servicing endorsement net worth of $250,000 is not met, who must the lender notify and what actions need to be taken?
Lender must submit a copy of their financial audit report for the most recent fiscal year documenting their net worth.
What does a lender submit when indicating whether or not they will be seeking a servicing endorsement on
the application form?
Within 10 years
Within how many years can a person not be eligible to apply for a license with a financial misdemeanor?
A principle loan originator
Who must each mortgage broker or lender business designate to supervise the business and employees?
To be licensed as a loan originator and may not be a principle loan originator for more than one business at any given time
What are the terms to being a Principle loan originator?
he/she must demonstrate to the Office that he/she has been engaged in the mortgage business for at least 1 year prior to the position.
What are the requirements for a loan principal originator to supervise a mortgage broker business
An application for licensure will be approved or denied within how many days?
within 30 days
The Office will notify the applicant for licensure of an errors or omissions to fix within how many days?
within the past 15 years
Felony conviction or guilty plea for a violent crime or drug offense that constitutes an act of moral turpitude
in the past how many years will you not be accepted for licensure?
After the date of conviction, entry of plea of nolo contendre or felony involving fraud.
any action of bankruptcy, voluntary or involuntary, after the action is complete.
any change in to the initial app or any amendment for (report to NMLS) after the change is effective.
The following must be reported to the OFR within 30 days: 3 of them
If a mort. broker or lender proposes to change any control persons listed on the initial application, they must file an amendment through NMLS no later than 30 days prior to the change or 2 business days after the date the licensee first received notice of the change.
If changes to personal info and updates, what must be reported to the OFR 30 days prior to change?
Licenses are valid for 1 year and expire on what date?
License suspension and a fine of up to $500
Violations of renewal rules can result in ?
within 7 days of when events occurred.
All records must be updated on a current basis meaning?
3 business days of written request
If books and records are requested by the OFR, and those items are kept at a location other than their
principle place of business, how many days must they be provided after written request.
2 years after the date of publication which includes commercial scripts of radio or TV
Records of advertisements must be maintained for ?
Wood Destroying Organisms Report (WDO)
Upon the approval the lender may ask for this report as it reveals possible damage due to termites and other similar organisms
WDO Clearance Letter
At closing, the lender will ask for ? issued by an inspector that certifies that has been repaired
Whenever there is reason to believe, either by complaint or otherwise, that a violation has been committed or is about to be committed.
When may the OFR conduct an investigation of any licensee?
A licensed attorney or title company
Who must deposit any money for disbursement at a loan closing, that an investor provides?
Any requirement for title insurance or legal opinion of title is the responsibility of who?
an application fee, credit report fee, property appraisal fee, or other 3rd party fee
Before obtaining a written commitment from a mortgage lender, a mortgage broker may not accept any fee in connection with a mortgage loan other than? 4 of them
Waiver of notice
A borrower may waive their right to receive a notice of a material change if the extension of credit is needed to
meet a bona fide emergency. what document is this?
unless there is a written Mortgage Broker Agreement.
executed within 3 business days of the application.
this document is between the broker and borrower and is signed and dated by the principle loan originator or branch manager.
A loan originator fee is prohibited unless there is?
when does this document need to be executed?
who is this document between and who signs and dates this ?
services to be provided by the mortgage broker, and the amount and terms of the loan origination fee that the mortgage broker is to receive. the statement cannot be no less that 12 point boldface type.
What is the mortgage broker agreement made up of?
Nature of the relationship with the lender and how compensation is paid by the lender.
The exact amount of any payment by the lender disclosed within 3 business days after the mortgage broker is aware of the amount.
If the broker is to receive any payment from a lender, that amount must be disclosed in the written mortgage agreement stating the following.
Broker cannot make mortgage loans or commitments, can furnish a lock-in rate and program on behalf of the lender if there is a written commitment from lender on behalf of the borrower for the loan.
GFE signed and dated by the borrower, any excess of the actual cost must be returned within 60 days for withdrawl or closing.
The mortgage broker must also disclose the following to a borrower:
Florida Administrative Weekly
Regarding the approval, denial, or renewal of a license, the OFR of the financial services commission will publish this where?
a notice of the application will be published within 21 days after receipt.
Within 21 days after publication of notice
When will they publish the information in the Florida Administrative Weekly?
When can you request a hearing?
Within 21 days after notice
Constitutes a waiver of any right to a hearing.
Impose a fine in an amount ... for each count or separate offense not exceeding $25,000 for each count or separate offense
If a person fails to request a hearing within how many days, what happens? 2 questions
admin fine of up to $1,000 per day.
Conducts business at an unlicensed branch office
Unlicensed person acts as a loan originator, a mortgage broker, or a mortgage lender
an administrative fine of up to what, but not to exceed $25,000 cumulatively, for each day that a mortgage broker or mortgage lender... 2 things
if good cause is found that there will be immediate harm to the public.
the Office can immediately suspend a mortgage loan originator, broker, or lender license if..?
Any felony or crime involving fraud, breach of trust, money laundering, etc.
What constitutes an immediate danger to the public health, safety, or welfare?
the penalty is $300 for numerous offenses
a numerous offense is at least 3 occurrences and 20% or more of files examined
What is the penalty if a Mortgage Broker or lender fails to maintain loan files for a numerous offense?
What constitutes a numerous offense?
the licensee is noncompliant
The office can petition the court of the county where the person subpoenaed lives or has their place of business if?
when is a cease and desist order effective?
1st degree felony.
prison term of 30 years and a fine of $10,000.
Habitual/repeated violations can result in a life sentence
If the value of money or property unlawfully obtained exceed $50,000 and there are 5 or more victims, what Conviction is this and what is the prison term and fines? what if this is habitual and keeps occuring?
3rd degree felony.
results in a prison term of 5 years and $5,000 fine
Habitual/repeated violations result with a prison term of 10 years and a $5,000 fine.
for knowingly violating any of the violations of a 1st degree felony conviction is what kind of conviction?
what is the term and fine?
For habitual/repeated violations?
By April 1st
Real estate taxes in Florida are due annually when?
Nov. 1st - 4% Dec. 1st - 3% Jan.1st- 2% Feb.1st - 1%
Homeowners may pay their taxes early at a discounted rate:
Nov 1st? Dec. 1st? January 1st? February 1st?
delinquent fee of 3% through May 31st.
Unpaid taxes become a tax lien on the property if not paid in a reasonable time and can lead to foreclosure.
Taxes not paid by April 1st are charged a delinquent fee of? through when?
If unpaid taxes are not paid in a reasonable time what happens and what can this lead to?
1 day before the closing date.
How are property taxes in Florida paid?
the seller will pay his/her portion of property taxes when?
Designed to protect the value of the residents home from property taxation, creditors, and situations arising from the death of a spouse.
between Jan 1st and March 1st in each year the exemption is sought.
In Florida, residents have to file an application to qualify for a homestead exemption between?
Owner occupied residences and mobile homes
A Homestead exemption can only be used on what kind of residencies?
The first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000, applies to the assessed value between $50,00 and $75,000 and only to non school taxes.
Every person who owns and resides on real property in Florida on Jan. 1st and makes the property his/her permanent residence is eligible to receive a homestead exemption up to ?
excluded from the homestead exemption.
Sales tax and other non- property taxes are ?
The Financial Services Commission.
A borrower must sign an Anti-coercion statement under rules adopted by?
Title Theory. The assumption is that the lender owns the property until the debt is paid and has a right to possess the home if the borrower defaults. When the debt is paid in full, the legal title is given back to the borrower.
what states, when mortgages are completed, the lender receives legal title to the home while the borrower keeps an equitable (reasonable or fair) title.
Lien Theory. The mortgage, or deed of trust, is the lien against the property and if the borrower defaults, the lender will be have to set up a foreclosure proceeding in the order to get the legal title to the property.
This is why the borrower signs a promissory note, states that they agree to repay the loan.
what state, the borrower/homeowner keeps both legal and equitable title.
This is the order in which liens are filed against a property.
Federal Tax Liens
Real estate tax liens
what are the general priority of liens?
choices are: Federal Tax Liens (IRS), Voluntary Liens (mortgage), Real estate tax liens, Mechanic liens
The right of redemption
Florida Statute Chapter
The mortgagors right to reclaim their real property that has been foreclosed upon?
Where is this found?
1 day before the borrower is required to sign the agreement.
A mortgage broker, mortgage lender, or loan originator must provide a borrower with a written agreement for loan modification services how in how many days?
No fees may be collected prior to providing all services included in the agreement for loan modification services.
After borrower signs the agreement, they must receive a copy within how many hours?
Must be printed in at least 12 point UPPERCASE
Must be signed by both parties( mort professional and borrower)
Name, address, and a detailed description of services must be stated on the agreement by the mort professional
The amount of charges and fees the borrower must pay for each service.
Borrowers right to cancel the agreement within 3 business days of signing without any penalties or obligations.
Statement that if the borrower does cancel the agreement, all payments made by the borrower must be returned to
them within 10 days after cancelation.
What are the requirements to the loan modification agreement?
actual damages, attorney's fees, and any court cost incurred.
Violations of the Loan modification agreement can result in?
Florida - Fair Lending Act
States proper procedures to eliminate abusive lending practices and primarily focuses on high-cost home loans and equity based lending.
High-cost home loans
A mortgage loan transaction that is secured by the consumers principal dwelling, other than a reverse mortgage or open end credit plan transaction, if the annual percentage rate of the transaction will exceed by more than *10% the yield on Treasury securities
High-Cost Home Loans
The total points and fees payable by the borrower will exceed the greater of 8% of the total loan amount or $400.
The prepayment penalty does not exceed 3 years
Borrower is offered another loan without prepayment penalty
a High cost home loan cannot contain a provision for a prepayment penalty unless:
A high cost home loan having a term of less than 10 years cannot contain terms in which the regular periodic payments would not fully amortize the outstanding principle balance.
This does not apply when the payment schedule is adjusted to account for the seasonal or irregular income of the borrower
Prepayment penalty of balloon payments?
fee cannot exceed 5% after 15 days of a borrower being late.
A mortgage lender cannot charge fees to modify, renew, etc of a high cost loan, or to defer payments for each 12 months of the length of the loan.
The late payment fee cannot exceed (blank) after (Blank) days of a borrower being late
The right to cure - 45 days
A mort. lender must provide the borrower with a notice of the right to cure default on a high cost loan within (blank) days with the name and phone number of the person the borrower can make the payment to.
An owner must own how much of the company?