Study sets, textbooks, questions
Upgrade to remove ads
Terms in this set (99)
The annual percentage rate (APR) is the
relationship between the total cost of borrowing and the actual amount borrowed.
What is not a protected class according to the federal Fair Housing Act?
What is not a triggering term according to TILA, requiring additional disclosing in advertising?
Terms to fit your budget
Under which federal legislation does the consumer have the right to receive a copy of the appraisal report on a dwelling that is to be used as collateral for a loan?
What is the most common appraisal approach used in appraising single-family housing?
sales comparison approach
A borrower closed a loan last week with ABC Mortgage Company. Her name is on the National Do Not Call Registry and on ABC's internal do not call list. What does ABC do?
cannot call her because she is on ABC's internal list.
Of these, who is responsible for the accurate accounting of all monies due to and from the parties in a real estate sale?
settlement or escrow agent
What regulation forbids the seller to require the use of a particular title company as a condition of sale?
MDIA is an amendment to what law?
A Mortgage Servicing Disclosure Statement is required by what law?
The initial Loan Estimate on an ARM loan indicates an APR of 6%. The APR changes to 6.125% prior to close. Does this require a redisclosure
Which act provides a specific definition of a nontraditional loan?
Secure and Fair Enforcement Mortgage Licensing Act
The Homeownership and Equity Protection Act does NOT require a lender to verify a borrower's ability to repay the loan if the...
borrower plans to sell the current dwelling within a year
A borrower elects to lower his settlement costs by paying a slightly higher interest rate. This appears on the Closing Disclosure as a?
credit to the borrower
A lender learns that a real estate agent encouraged an appraiser to hit a specific value for a property. The lender can do what?
can use the appraisal and close the loan if the lender can document that the appraisal does not materially misrepresent the value.
Which federal legislation requires that the borrower have the right to receive a copy of his or her credit report, without charge, annually?
A lender is offering an ARM loan that is fixed for the first three years. When advertising that loan, the word fixed". What else must accompany it?
must be accompanied by the fixed time period.
Which law ensures lenders use an annual percentage rate (APR) so that the borrowers have the information they need to make informed comparisons?
Where do the funds for FHA loans come from?
A borrower elects to buy down the interest rate on his mortgage loan. This appears on the Loan Estimate as a?
charge to the borrower
A mortgage loan originator hands the borrower a Loan Estimate in his office the day after the application was completed. The MLO can charge the borrower for an appraisal when?
Mortgage insurance premium (MIP) may be cancelled for FHA loans when?
after a minimum of 11 years if the beginning loan balance is less than 90% of its appraised value
A straw borrower is someone who
allows his name and information to be used to obtain a mortgage, but does not intend to live in the house.
If a new Loan Estimate is required because of a changed circumstance, it must be disclosed and received by the borrower ____ days prior to consummation of the loan
In order for a junior mortgage on a primary residence to be considered a higher-priced loan, the APR must exceed the applicable average prime offer rate by at least
When a Loan Estimate is provided to a borrower, it is considered to be provided in good faith when the actual closing costs are lower as shown on the
Closing Disclosure (CD)
The document used by the VA to determine the maximum mortgage amount is a(n)
The rate that is used to amortize the mortgage loan and determine the monthly loan payments is known as the
Which law prohibits MLOs from influencing an appraiser to overstate the value of a home in order to get the loan approved?
Steering consumers to loan products that would result in greater compensation for a MLO is prohibited by what legislation?
A high-cost loan that results in negative amortization is illegal under what law?
Higher-priced loans are defined by which law?
The clause in the mortgage that makes the note due in full upon sale or transfer of a property is called a(n)
An MLO is considered to have an affiliated business relationship with a title company to whom it refers business if it has an ownership interest of more than
The MLO tells an applicant on public assistance not to waste his time filling out an application and paying any fees since she won't qualify. What federal law has the MLO violated?
The lender usually does not allow the source of a borrower's down payment to be
MLOs are prohibited from doing what with an appraiser?
telling an appraiser a minimum value needed to approve the loan
Which law requires MLOs to provide borrowers with a Loan Estimate of closing costs?
At what point can a lender charge a loan application fee?
three business days after mailing the required disclosures
A mortgage loan originator is NOT required to provide a Loan Estimate if the borrower
withdraws the application within 3 business days.
Which participant in the loan process would be most likely to overvalue a property?
While it is unlawful to consider race when underwriting a loan, what federal legislation requires that this information be included on the loan application?
Home Mortgage Disclosure Act
Which government agency makes loans when no local lender is available?
USDA Rural Development
Which act provides a specific definition of a nontraditional loan
Secure and Fair Enforcement Mortgage Licensing Act
The MLO tells an applicant on public assistance not to waste his time filling out an application and paying any fees since she won't qualify. What federal law has the MLO violated
What is the required down payment on a Rural Development loan?
Qualifying guidelines on an FHA loan are? HE/DTI
31% housing ratio and 43% total debt ratio.
What type of scam entails homeowners who are encouraged to refinance their property over and over until little or no equity remains?
Fannie Mae is the more common name of the
Federal National Mortgage Association
When a numerical error has occurred to Closing Disclosure and the initial Closing Disclosure has been delivered to the borrower, the creditor must
What is the adjustable number used to compute the interest rate on an ARM called?
A mortgage loan originator who supplies a revised Loan Estimate to a borrower must maintain the related documentation for at least
If a mortgage loan originator or real estate agent suggests to a client that he move to a particular area to reside in a community that he will fit into, that MLO or real estate agent would be guilty of
A mortgage loan originator must retain evidence of compliance with the Truth in Lending Act for at least ____ years after disclosures were required to be made.
How long does a lender have to cure a tolerance violation?
30 days after settlement
If a property has a sales price of $300,000 and an appraised value of $290,000 with a loan amount of $250,000 and a subordinate lien of $10,000, what is the combined loan-to-value?
The cost of discount points, whether paid temporarily or permanently to lower the interest rate, is based on what?
the loan amount
Identify the monthly interest-only payment amount for a loan amount of $200,000 with a note rate of 6.00%
$1,000. 200k x 6%= 12k / 12(months)= $1,000
The ______________ is the result of the sale price or appraised value minus the sum of the loan amounts being obtained for the property.
When the initial loan amount is multiplied by the note rate, the result is known as the
annual interest charge
What is the PITI payment divided by the gross monthly income?
what isn't included in the down payment amount?
Broker Julie advertises low interest rates and APR. However, when qualified applicants come in, she sells them on a different loan with a slightly higher rate and more fees. If the borrowers agree to the terms, do you think that Julie did anything wrong?
Yes, she could be accused of using a bait and switch tactic to earn more in fees from the customer.
What terminology is the only correct way to ask a client about his marital status?
Are you married, unmarried, or separated?
When is an MLO EXEMPT from the policies of the Federal Civil Rights Act?
never; an MLO is not exempt from civil rights laws affecting property
MLO Tim was helping his cousin Ann obtain a mortgage. He knew that Ann was planning on retiring in 3 months, resulting in a significant decrease in income, but chose to ignore that fact so that she could get the loan. This might be considered an example of
It is a violation of which law to discriminate against a potential borrower on public assistance?
The act of redlining may be defined as
refusing to make loans on property in certain neighborhoods for discriminatory reasons.
Mortgage Servicer ABC has received a payoff request from Borrower Brenda. Mortgage Servicer ABC must respond to Brenda's request within how many days?
7 business days
To protect the security, confidentiality and integrity of customer information, the Federal Trade Commission adopted the
safe guard rules
Borrower Keith has failed to keep his home insured. Lender Lucy has the right to
charge for force-placed insurance.
he BSA requires financial institutions to maintain specified financial records and report financial transaction larger than
The MARS Rule requires financial institutions to disclose information to prevent distressed homeowners from
receiving misleading information may cause then to make uninformed or incorrect loan decisions.
Lender Hank must alert homeowner Grace at least ____ days before he charges for a force-placed insurance policy.
Within how many days after the submission of a complete loan workout application, must the mortgage servicer inform the borrower if there is an option to save the home
Borrower Carolyn has missed a mortgage payment. Mortgage Servicer ABC must try to establish contact with Carolyn no later than ______ days and must provide mortgage workout options that may be available within 45 days of the missed payment.
The purpose of the Bank Secrecy Act is to
target potential criminal and terrorist activities
Which act requires financial institutions to maintain appropriate records and file reports for investigations or proceedings?
Which term is BEST defined as the item that gives a lender the right to declare the entire loan balance due immediately because of borrower default or for violation of other contract provisions?
Which of the following terms is best defined as the condition in which a debtor pledges personal or real property as security for a debit, typically without giving up possession of it?
During the consultation stage of the loan process, when the goal is an actual mortgage loan approval for a purchase, what must be examined to ensure the MLO can comply with the stated terms?
Desktop Underwriter and Loan Prospector are both
automated underwriting systems
Underwriting is the step of the loan process when?
documentation, borrower information, and various risk factors are evaluated to make a loan decision.
The Equal Opportunity Act requires a lender to communicate a credit decision within how many days after receiving a completed application?
The Closing Disclosure allows a buyer to see the total amount of money necessary to purchase the property which is also known as the?
What term is best defined as the division of expenses between buyer and seller in proportion to the actual amount of the item represented by a particular expense as of the day the loan is funded?
A trust deed is one type of ______________ that requires a debtor to hypothecate his/her property as a condition of the loan.
What type of clause often appears in blanket mortgages so the developer can sell completed homes before having to pay back the loan?
partial release clause
What type of lien has the highest priority and gets paid first?
real estate property tax
The combined total of all lien balances of a property divided by the lesser of the sale price or appraisal value is known as
When a buyer borrows money from another source to pay part of the purchase price or closing costs it is called
A loan that meets the criteria necessary to be sold in the secondary market is a
Mortgage loans set up like a standard 30-year conventional loan with a bi-weekly payment plan are usually paid off in how many years?
22 to 26 years
The Mortgage Call Report contains two (2) report areas that are required to be submitted
For violations of the SAFE Act, state and Federal authorities do NOT have the authority to
impose a prison sentence
Fred works for a registered broker, and earns a salary as well as a commission for every residential loan application he takes for his employer. Fred must be a
licensed mortgage originator
MLO Danny's act is considered to be for "compensation or gain" when he
receives something of value.
The maximum amount of penalty for each act that is in violation of a SAFE Act requirement is
What percentage is the fee threshold that triggers HOEPA disclosures?
Students also viewed
Module 11 Exam
Mortgage Lending Principles & Practices Ch. 11 - 15
What The $?!... NMLS Math Exam Study Guide!
Sets found in the same folder
Mortgage Study Guide
Mortgage Lending Principles & Practices 8th Editio…
Other sets by this creator
Needs Discovery questions
Disclosure & Retention
Which neurotransmitter is affected by antispychotic medications? a. Epinephrine. b. Dopamine. c. Norepinephrine. d. Acetylcholine. e. Serotonin.
Use the table discussed earlier to find the monthly checking-account service charge for the following accounts. Tina's Italian Grocery, $62$ checks, average balance $\$1834$.
Explain the difference between depreciation, depletion, and amortization.
The declaration, record, and payment dates in connection with a cash dividend of $1,250,000 on a corporation’s common stocks are August 1, October 15, and November 14. Journalize the entries required on each date.
Recommended textbook solutions
Myers' Psychology for AP
David G Myers
Elliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson
Principles of Economics
N. Gregory Mankiw
Principles of Economics
N. Gregory Mankiw
Other Quizlet sets
peds Exam 3
Memory and Cognition (Baddeley): Ch. 5- Learning