- University of New Hampshire
- Real Estate And Urban Land Economics
- Real Estate And Urban Land Economics 101
Last Modified: 2011-07-06
No 3rd party Fees
2x Finance Charges
100 to 1000 lesser
TILA Must Show
5000 + 1 Year in Jail
Financila Insitutions Serving Housing Needs
With In The Neighborhoods Where they are located
Equal Credit Opportunity Act
Federal Reserve Board of Governors
Gidance from Federal Reserve System
Ensure equal access to credit
7500$ per violation
10,000$ fine and 1 year in jail
(mip) Mortgage Insurance Premium on all
federal government inssured
Part of HUD
Class action law su
1,000 per borrower
500,000 In total Payouts
A borrower must receive the disclosure to the right to receive a copy of the appraisal required by ECOA:
(ECOA) A creditor may ask about an applicant’s marital status.
(ECOA) A creditor must notify an applicant of its intended action on an application within
(ECOA) A mortgage broker may inform an applicant that Federal law requires the broker to ask about the race, sex, marital status, and age by putting the information on a web site.
(ECOA) According to ECOA, how quickly after a credit decision must the borrower request a free copy of their appraisal report?
(ECOA) According to ECOA, how quickly must the appraisal be delivered to the borrower when they have requested said report within 90 days of a credit decision?
(ECOA) According to ECOA, one must retain proof of compliance for how long?
(ECOA) According to ECOA, the appraisal disclosure generally must be delivered to the borrower when?
(ECOA) Any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit is a:
(ECOA) ECOA protects borrowers based on:
(ECOA) Entities making business or commercial loans must maintain records or other data relating to those loans for a period of no less than ___ year(s), in order to _______________________________.
(ECOA) Entities making residential mortgage loans must maintain records or other data relating to those loans for a period of no less than _________, in order to _______________________________.
(ECOA) How many years does a consumer have to take civil action against a creditor suspected of violating the Equal Credit Opportunity Act (ECOA)?
(ECOA) If a borrower is denied a loan request due to the credit score not meeting lender's guidelines, what must be done next?
(ECOA) Once a loan application is complete according to ECOA, a credit decision must be made within:
(ECOA) The term __________ does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is either delinquent or in default or where additional credit would exceed a previously established credit limit.
(ECOA) Under ECOA, how long must one keep mortgage records?
(ECOA) Under ECOA, what information must be sent to a borrower, in writing, who has been denied?
Name and Address of leander and federal agencies who ensure compliance
(ECOA) What entity provides guidelines and rules for ECOA?
(ECOA) What agency governs ECOA?
(ECOA) What is permissible to ask about for ECOA?
What is the average origination fee at the time of transaction?
(Ethics) A responsible broker __________ arranges co-signed mortgages.
(Ethics) A self employed borrower says most of his money is ran through his business and asks, "How much money do I need to qualify?" What is the best response?
(Ethics) A vendor taking advantage of the consumer by charging unjustly high prices through fraud or lack of alternatives is called:
(Ethics) Charging borrowers above the legally set rate for this step in the loan process is:
(Ethics) What is meant by the term "ethics?"
(Ethics) Which of the following is NOT a sign of predatory lending?
Full disclosure of loan terms
(FACTA) Affiliates wishing to use consumer information for marketing purposes may do so if they either inform the consumer of the marketing or the consumer was given a chance to
Opt - Out
(FACTA) FACTA amends the _____________.
(FACTA) Which of the following need NOT be included on the credit score disclosure?
Alternative consumer reporting agencies that may be used
(FACTA) Which of the following was NOT covered in FACTA?
Telemarketing / Do Not Call
(FCRA) An adverse action would contain all of the following except:
(FCRA) How many days does a lender have to disclose the reason for denial if requested by the borrower?
(FCRA) If a wholesale lender has denied your client and a Notice of Adverse Action Letter has been faxed to the Broker; what is the broker's responsibility?
Forward it to the borrower immediately
(FCRA) What does FCRA stand for?
Fair Credit Repoerting Act
(FCRA) What is the primary purpose of FCRA?
To ensure accuracy and fairness of credit reporting
(FCRA) Who oversees credit card issuers?
(FRB) Federal Reserve Board
(FRAUD) A condition that would make fraud more likely to occur in a mortgage company includes:
Weak oversight from management
(FRAUD) If an unethical broker has a borrower sign a blank loan application, he is possibly trying to pull what scam?
Falsified loan application, Unverified income.
(FRAUD) A copy of the HUD-1 Settlement statement can be used to verify the net proceeds from the sale of real estate. Which of the following could be a warning sign of a potential problem?
The sales price differs from the sales contract
(FRAUD) If a mortgage originator assists a borrower or an appraiser in fraudulent activity, that originator:
Could be indicted as a conspirator
(FRAUD) If the social security number on the credit report is invalid or differs from the loan application, the borrower may be ____________ . (choose the best answer)
using a false identity
(FRAUD) The practice of sneaking a burdensome provision into the loan contract without the borrower’s knowledge is known as what?
(FRAUD) What is a "straw buyer"?
A buyer who accepts a fee for the use of his/her social security number and other personal information on a mortgage application
(FRAUD) What won’t happen if fraud is found in a loan?
The loan will be forgiven
(FRAUD) When you are working a deal with a real estate agent, you inquire about a carry back. The real estate agent tells you to just call the title company and have them draw up something that looks good. What should the next step of the originator be?
Notify the authorities
(FRAUD) Which of the following could be a red flag for a borrower that is using a property as an investment instead of their primary residence?
Live in the same neighborhood
(FRAUD) Which of the following is NOT an example of fraud?
Stated Income Loans
(FRAUD)If a mortgage originator assists a borrower or an appraiser in fraudulent activity, that originator:
Could be indicted as a conspirator
(General Mortgage Knowledge) 30/15 and 180/360 represent what type of loan?
Balloon Mortgage; 30 year amortization with 15 year balloon
(General Mortgage Knowledge) A 3/1 is a(n):
(General Mortgage Knowledge) A borrower elects to have a 2/1 buydown on an FHA loan at 6.5% fixed interest rate. The loan will have an interest rate that is permanent at?
(General Mortgage Knowledge) A borrower has a 40% DTI ratio, $500 in monthly debts, and $5k in monthly income. What is the highest PITI the borrower can qualify for?
(General Mortgage Knowledge) A borrower must notify the creditor of any intent to rescind on a loan by midnight of the third day after:
Whichever of the above comes last
(General Mortgage Knowledge) A borrower’s payment is based on a starting rate of 4.5% on an FHA 2/1 buydown. What is the borrower’s permanent rate?
(General Mortgage Knowledge) A builder has a single loan from his local bank that he has used to fund the construction of multiple homes. He does not want to pay off the entire loan balance when he sells a single home, so he makes sure his mortgage has?
A release clause
(General Mortgage Knowledge) A complaint for housing discrimination would be handled by:
(General Mortgage Knowledge) A copy of the HUD1 may be requested by the borrower how many days prior to the closing?
One (1) day
(General Mortgage Knowledge) A credit report would have:
Account information, public records, and delinquent accounts
(General Mortgage Knowledge) A creditor must notify an applicant of its intended action on an application within how many days after the application is received?
Thirty (30) days
(General Mortgage Knowledge) A lender that has a lien in first position gives them priority over other liens except?
Unpaid property taxes
(General Mortgage Knowledge) A loan processor may send out a form to verify the past two (2) years of employment history, gross income, as well as verify the probability of continuing employment. This form is referred to as the:
(General Mortgage Knowledge) A loan where payments do not cause the principle to decrease is:
(General Mortgage Knowledge) A Margin is best defined as:
The amount added to the index to adjust a rate
(General Mortgage Knowledge) A property is valued at $300,000. There is a first and second mortgage with a CLTV of 75%. The second mortgage has a balance of $30,000. What is the amount of the first mortgage?
(General Mortgage Knowledge) A VA Funding Fee is refundable if the loan is paid in full prior to which of the following?
(General Mortgage Knowledge) A variable rate mortgage is due to adjust. The index for this loan is the LIBOR, which is currently at 4.5%. The loan’s current interest rate is 5.625%. The margin for the loan is 2.75%. The COFI is presently at 3.75%.
(General Mortgage Knowledge) A(n) ___________ is a loan with an interest rate that can adjust monthly and offer a borrower a number of payment options, such as a 30 year fixed payment, 15 year fixed payment, interest only and a minimum monthly payment.
(General Mortgage Knowledge) An application cannot be submitted without the Government Monitoring section completed. Choose one category of information that would be provided in this section of the 1003.
Race, gender, ethnicity of the borrower
(General Mortgage Knowledge) An appraiser would use a form _________ to certify completion of repairs or construction to a property.
(General Mortgage Knowledge) Business tax returns aren’t necessary for the loan if:
Less than 25% is owned by borrower
(General Mortgage Knowledge) Can a VA loan be assumed?
Yes, VA may be assumable. The buyer must meet credit qualifications, but doesn’t have to be a veteran.
(General Mortgage Knowledge) Concerning FHA loans, a mortgage insurance premium is required until/for:
MIP is required on an FHA loan for a period of five years, even if the equity position is better than 20%. The MIP is used to build a pool the FHA draws on to pay claims on loans in default.
Courtney would like to purchase a home from Chuck. Because of her prior credit problems, she is unable to obtain conventional financing. Chuck decides to sell Courtney the property, but he will retain title until the purchase price of the property is paid in full.
Contract for deed
(General Mortgage Knowledge) Definition of the term "fully indexed accrual rate" as it applies to a mortgage is the:
Interest rate accruing on an FRM
(General Mortgage Knowledge) Describe what is the "Cost Approach" on the appraisal.
The cost to rebuild subject property
Fannie Mae and Freddie Mac:
Are Secondary Market Institutions
(General Mortgage Knowledge) FNMA and FHLMC securitize what types of loans?
Conventional loans programs are loans not guaranteed by GNMA. The conventional market includes banks and other financial institutions that make loans using their own funds. FNMA and FHLMC are GSEs, established by congress to support the home mortgage industry. The role of the GSEs is to package mortgage into pools and sell them to investors. This is otherwise known as "securitizing"
(General Mortgage Knowledge) For a veteran who qualifies for a VA loan, the amount the Veterans Administration (VA) will guarantee is called:
(General Mortgage Knowledge) For which of the following reasons would it be permissible to refuse to take an application from a potential borrower?
The borrower has alluded to the fact that he/she is submitting false documents in order to qualify for a larger loan
(General Mortgage Knowledge) How many days does a seller have to wait to sell a home for profit if the new homebuyer is using a FNMA loan product?
Right away, 0 days
(General Mortgage Knowledge) How many days to you have to send out the Appraisal Disclosure Notice?
Thirty (30) days
(General Mortgage Knowledge) How much can the APR change on a loan prior to closing without having to redisclose the APR?
(General Mortgage Knowledge) How soon must a borrower occupy the home on a primary residence?
Sixty (60) days
(General Mortgage Knowledge) If a borrower is purchasing a home with a FHA loan and the home requires Flood Insurance, how long is the rescission period after closing?
Zero (0) days
(General Mortgage Knowledge) If a borrower takes a 2/1 buy down with a start rate of 4.5, what is his note rate?
(General Mortgage Knowledge) If a borrower takes a 2/1 buy down with a start rate of 4.5, what is his rate during the second year?
(General Mortgage Knowledge) If a lender agrees to subordinate a loan, what has occurred?
The borrower has obtained a second mortgage/lien
If a servicer receives a "qualified written request" from a borrower for information about an account, the servicer must research the borrower’s inquiry and come to a decision as to whether there is indeed an error within how many business days after receiving the request?
Sixty (60) business days
(General Mortgage Knowledge) If the borrower has less than a ______ down payment, mortgage insurance is required. Usually, the lenders will submit the loan package to a mortgage guaranty insurer at the same time the lender is underwriting the loan.
(General Mortgage Knowledge) In a bi-weekly mortgage payment plan, how many extra mortgage payments are made every year?
(General Mortgage Knowledge) In order for a mortgage to be valid and enforceable, it…
Is signed by both the mortgagee and mortgagor
(General Mortgage Knowledge) Instead of mortgage insurance, every VA loan includes what type of fee?
(General Mortgage Knowledge) Mortgage backed securities are a product of which of the following?
(General Mortgage Knowledge) Out of the loans below, which has mandatory MIP?
MIP is required on all FHA loans.
(General Mortgage Knowledge) SRP is:
Paid to a lender and represents the value of the servicing
(General Mortgage Knowledge) The 4 Cs: Character, Capacity, Credit, and Collateral. What is capacity?
The ability to make the payment (income and assets)
(General Mortgage Knowledge) The acronym PFC stands for
Prepaid finance charges are items paid at closing such as discount points, prepaid interest, etc. TILA defines PFCs as any finance charge paid separately in cash or by check before or at the closing or withheld from the proceeds of the credit.
Withc loan has an assumable clause
VA permits for an assumption.
(General Mortgage Knowledge) The Cost of Funds Index is traditionally used to determine interest rates on what type of loans?
Rate adjustments on adjustable rate programs
(General Mortgage Knowledge) The definition of a conventional mortgage is:
A loan that is not an FHA, VA or RHS mortgage
(General Mortgage Knowledge) The term "30 basis points" expressed as percentage is?
(General Mortgage Knowledge) There are three usual approaches to determining the fair market value of a property: Which one does not belong?
The three usual approaches to determining a value for a residential property are income, cost, and sales approach.
(General Mortgage Knowledge) This loan product is typically for borrowers over 62 years old who have built substantial equity or have paid their home in full and wish to cash out the equity in their home.
Reverse Annuity Mortgage
(General Mortgage Knowledge) USDA loans are primarily for properties located in:
The USDA rural development programs are made for the purpose of assisting low-income borrowers to purchase homes in the rural areas.
(General Mortgage Knowledge) USDA, FHA and VA are all purchased by which of the following?
(General Mortgage Knowledge) VA loans require which of the following?
VA Funding Fee
Correct! FHA insures loans and VA guarantees loans. Instead of mortgage insurance premiums (MIP), VA requires an up-front VA funding fee. This fee depends on the amount of the down payment and the duty status of the veteran, along with a few other factors.
(General Mortgage Knowledge) What are the differences between Freddie, Fannie, and GNMA?
Freddie and Fannie are GSEs and GNMA is not
(General Mortgage Knowledge) What are the words behind the acronym APR?
Annual Percentage Rate
required by TILA "cost of credit"
(General Mortgage Knowledge) What best describes discount points paid on a mortgage loan?
Permanently buys down rate
(General Mortgage Knowledge) What best describes the COFI index?
Cost of funds index
(General Mortgage Knowledge) What does POC mean?
Paid Outside of Closing
(General Mortgage Knowledge) What does the acronym USDA represent?
United State Department of Agriculture
(General Mortgage Knowledge) What does the Federal Housing Administration (FHA) do?
(General Mortgage Knowledge) What does the VA do for a loan?
(General Mortgage Knowledge) What does title insurance cover or protect against?
Any unpaid liens prior to the borrower purchasing the property
(General Mortgage Knowledge) What entity insures FHA loans?
Federal Housing Administration
Correct! Commonly known as FHA, it was created by congress in early 1930s to promote home ownership. In 1965, FHA became part of HUD.
(General Mortgage Knowledge) What factor do lenders analyze in order to determine if a borrower will be financially able to meet the demands of a loan repayment?
Correct! Existing debt and the ratio to a borrower's income (DTI Ratio) is the primary factor in a lender's discussion as to the ability to repay debt
What is a Conventional loan?
Any loan NOT insured by the government
What is a jumbo loan?
A loan that exceeds the maximum loan limits backed by FNMA and FHLMC (loans in excess of $417,000)
(General Mortgage Knowledge) What is a short sale?
When the lender agrees to a reduced payoff on a loan when the subject property is sold
(General Mortgage Knowledge) What is FNMA's primary purpose in the secondary market?
Correct! FNMA and FHLMC securitize loans. In this process, bonds are issued for pools of loans and lenders are able to obtain the investment in the bonds as a renewal source of funds which is used to make more loans
(General Mortgage Knowledge) What is one of the many roles of the Federal Housing Administration?
(General Mortgage Knowledge) What is required for a FNMA 4-Plex investment property?
6 months reserves
(General Mortgage Knowledge) What is the 2009 conforming loan limit for a one-family property?
$417,000 (this goes up to $625,500 for high cost areas)
(General Mortgage Knowledge) What is the definition of a "business day"?
When most creditor’s functions are open for RESPA ,and Monday through Saturday, excluding federal holidays under TILA
(General Mortgage Knowledge) What is the funding fee on a USDA loan?
(General Mortgage Knowledge) What is the maximum entitlement amount for a veteran?
(General Mortgage Knowledge) What is the maximum gross adjustment on the appraisal?
(General Mortgage Knowledge) What is the maximum LTV for FHA loans?
What is the only term for a USDA loan?
(General Mortgage Knowledge) What is the primary purpose of Fannie Mae?
Provide mortgage market liquidity
What is the term for when a title changes owners?
(General Mortgage Knowledge) What is used to determine the interest rate change on an ARM?
Index and Margin
(General Mortgage Knowledge) What is used to determine the value of a home when doing a VA loan?
Certificate of Reasonable Value
(General Mortgage Knowledge) What three items best describes what a lender/underwriter should consider when making a credit decision?
Credit, Capacity, and Collateral
(General Mortgage Knowledge) What transfers or changes ownership interest in real property from one person to another person?
(General Mortgage Knowledge) What type of loan would not have to be repurchased?
No bid loan
(General Mortgage Knowledge) When a borrower reaches 62 years of age and he has significant equity in his home, which of the following mortgage programs would best assist that person if he is in need of additional living expenses, access to funds for home repair or other needs?
HECM, otherwise known as Home Equity Conversion Mortgage, is a reverse mortgage. These loans are based upon age and equity. They are not repayable as long as the borrower remains in the home
(General Mortgage Knowledge) When a loan application is denied, how many days does a borrower have to request a copy of the appraisal report?
Ninety (90) days
(General Mortgage Knowledge) Where would the reset period for an ARM be shown?
Note, TIL, and DOT
(General Mortgage Knowledge) Which best describes an FHA loan?
A loan that is backed by the Federal Government
(General Mortgage Knowledge) Which form number represents the Request for a Copy of the Tax transcripts?
(General Mortgage Knowledge) Which loan is assumable?
Which of the following best defines a loan that doesn't meet the loan limits of FNMA and FHLMC?
non conforming loan is specifically one that doesn't conform to the FNMA and FHLMC loan limits or guidelines.
Which of the following fees affect the APR?
(General Mortgage Knowledge) Which of the following is defined as the cost of credit expressed as dollar amount?
(General Mortgage Knowledge) Which of the following loan programs does not require credit or income documentation and doesn't require repayment?
A reverse mortgage is a loan program available to those who are at least 62 years of age. The loan is based upon the equity they have in their home and doesn't require a credit decision nor income to qualify.
(General Mortgage Knowledge) Which of the following loans does not require annual or monthly mortgage insurance?
15 year FHA loan at 85% LTV
(General Mortgage Knowledge) Which of the following loans might be used to finance a loan amount that is in excess of GSE's loan limits?
(General Mortgage Knowledge) Which of the following terms defines the method in which a lien is removed from property when payment is made in full?
A reconveyance clause is included in states that use a deed of trust. It removes the lien on the property when payment in full is made. A defeasance clause is a similar provision that allows a borrower to redeem property once the loan is paid in full.
(General Mortgage Knowledge) Which of the following terms specifically refers to a loan that is not obtained through a program of the federal government?
(General Mortgage Knowledge) Which of the following would address the principal and interest payments due on a loan?
(General Mortgage Knowledge) Which of the following would best help an appraiser determine a home value?
Closed sales similar to, and in close proximity to, the subject
(General Mortgage Knowledge) Which of the following would not be found on a credit report?
Payments made to creditors who do not send data to a repository
(General Mortgage Knowledge) Which type of disclosure must have a statement that payment or loan terms can change?
Adjustable Rate Mortgage Disclosure
(General Mortgage Knowledge) Which would be associated with an impound/escrow account?
(General Mortgage Knowledge) Who gets a right to rescind notice when 2 borrowers are on the loan and both will owner-occupy the property?
Both Borrowers: Each get 2 copies of the right to rescind and 1 disclosure
(General Mortgage Knowledge) Why are FHA loans beneficial to lenders?
They are insured by the federal government
(GLB) Any non-public, personal information a customer offers to a financial institution (paper, electronic, or otherwise) that the institution or its affiliates handles or maintains is considered to be
(GLB) Under GLB, mortgage lenders and brokers, check cashers, pay day lenders, and credit counselors are all examples of what?
(GLB) Under GLB, mortgage lenders and brokers, Check Cashers, Pay day lenders, and
(Good Faith Estimate) After reviewing the trade off table, the borrower decides to accept the loan with the lower rate and higher settlement costs. What is the next step for this loan?
A new GFE must be provided if the customer would happen to choose a loan with a lower rate and higher settlement costs after reviewing the trade off table
(Good Faith Estimate) Many of the changes to the RESPA rule are designed with what purpose in mind?
(Good Faith Estimate) Once the good faith has been delivered, what is the only fee that can be collected for three business days?
Credit report fee
(Good Faith Estimate) What is the fine for a RESPA violation?
The penalty for a violation of section 5 of RESPA is $7,500 per occurence.
What is the maximum percentage that a settlement service selected by the originator can INCREASE?
(Good Faith Estimate) What is the maximum that a disclosed origination charge can INCREASE?
(Good Faith Estimate) What is the minimum time the disclosure for settlement costs be valid?
10 business days
(Good Faith Estimate) What line items would you find escrow items on the GFE?
(Good Faith Estimate) What unethical practice is the new Good Faith Estimate designed to reduce?
Bait and Switch
(Good Faith Estimate) When disclosing a prepayment penalty, what must we assume?
That the loan will prepay immediately, when it is costliest
(Good Faith Estimate) Which of the following fees is not included on the GFE?
Real Estate Broker Fees
RESPA mandated disclosure?
HUD-1 Settlement Statement
Good Faith Estimate
Regulation Z Disclosure
(Good Faith Estimate) Who is responsible for providing the Good Faith Estimate (GFE) to the borrower when the loan is originated by an entity that is acting as a mortgage broker?
(HMDA) A mortgage broker may inform an applicant that Federal law requires the broker to ask about the race, sex, marital status, and age by putting the information on a web site.
True, as long as the applicant consents and can access the information for ninety (90) days
(HMDA) One purpose of HMDA and Regulation C is to provide the public with information that will help show whether financial institutions are serving the ________________________ of the neighborhoods and communities in which they are locat
Housing credit needs
(HMDA) Redlining is best defined as which of the following?
Failing to lend to certain geographic areas
(HMDA) What does HMDA stand for?
Home Mortgage Disclosure Act
(MDIA) For the initial disclosures, what is the definition of "business day?"
A day where the creditor is customarily open to the public for carrying on substantially all of the creditor’s business functions
(MDIA) What fees may be collected prior to the 3 business day waiting period?
Credit Report Fee
(MDIA) Which of the following would be considered an acceptable reason to waive the waiting period?
The property secured by the loan will be offered up for sheriff’s sale during the waiting period
(Nontraditional Mortgage Guidance) A lending arrangement where either a closed-end second-lien or a home equity line of credit (HELOC) is originated simultaneously with the first lien mortgage loan, typically in lieu of a higher down payment, is commonly referred to as a:
(Nontraditional Mortgage Guidance) Non traditional mortgages usually have:
A lower introductory payment
(Nontraditional Mortgage Guidance) What is a major concern of the Interagency Guidance for non-traditional mortgages?
(Nontraditional Mortgage Guidance) What were the biggest issues for a buyer with non-traditional mortgages?
Borrowers did not understand payment terms
(Nontraditional Mortgage Guidance) Which of the following is NOT a risk associated with a Payment Option ARM loan?
Lower monthly payments are a FEATURE not a RISK often associated with Payment-option loans
(Nontraditional Mortgage Guidance) Which of the following is not a risk associated with nontraditional mortgages?
Fixed rate loans are traditionally not considered "non-traditional" loans
(Nontraditional Mortgage Guidance) Which one of these areas is not addressed by the agencies guidance on nontraditional mortgage guidance?
Appraisal and fair market value practices are not covered in this guidance. Guidance for appraisals are generally covered by USPAP.
(Red Flags Rule) Because Red Flags is Risk Based, your program must be appropriate to the ___________ and __________ of your business or organization and the nature and scope of its activities.
Size and complexity
(Red Flags Rule) The potential patterns, practices, or specific activities indicating the possibility of identity theft are considered to be:
Potential patterns, practices, or specific activities indicating the possibility of identity theft activities are called Red Flags
(Red Flags Rule) The Red Flags rule is:
To prevent identity theft
(Red Flags Rule) Which one of the following is NOT a purpose of the Fair and Accurate Credit Transactions Act (FACTA)?
Improve the processing time of credit reports
(RESPA) A broker pays for the title services on behalf of the developer. In return, the developer agrees to refer all buyers to the broker. Who is in violation of RESPA-Section 8?
Both the broker and the developer
RESPA prohibits payment or accepting things of value for referrals.
(RESPA) A referral fee can be paid if:
ABA exists and borrower is informed of fee
(RESPA) According to RESPA guidelines, failure to comply with Section 8 could result in which of the following?
$10,000 fine and a prison term of one (1) year for each incident
(RESPA) According to RESPA, a lender is permitted to charge a fee for the preparation of the settlement statement if
Under no circumstances
(RESPA) All of the following violate RESPA
A lender retains a portion of a fee paid to a surveyor for completion of a survey report
Wrong, one may only pay or receive a fee for providing bona-fide loan related services actually performed.
A mortgage broker agrees to pay a builder for the referral of the builders clients to the broker
A mortgage broker accepts a fee for sending its customers to a specific real estates sales associate
(RESPA) Compensation under RESPA can be shared in what scenario?
Affiliated business arrangement referral with disclosure
(RESPA) Federal law establishes a ________ day transfer period in which no late fees can be charged to a borrower who sends his or her payment to the original servicer, rather than the new one, before the payment's due date.
sixty (60) day transfer period in which no late fees can be charged to a borrower who sends his or her payment to the original servicer, rather than the new one, before the payment’s actual due date.
(RESPA) For class action lawsuits seeking damages for non-compliance with residerntial mortgage regulations, the offending servicer must pay anamount not exceedng:
For class action lawsuits, the offending servicer must not pay more than one thousand dollars ($1000) per borrower and the total of those payouts cannot exceed five hundred thousand dollars ($500,000) or one percent (1%) of the servicer’s net worth—whichever is less.
(RESPA) How many months cushion are allowed under the escrow account rules?
Two (2) months
(RESPA) If a lender must provide the borrower a copy of their appraisal if requested within 30 days of the request, how many days does the applicant have to request it?
(RESPA) If a servicer receives a "qualified written request" from a borrower for information about an account, the servicer must research the borrower's inquiry and come to a decision as to whether there is indeed an error within _______ business days after receifint the request.
(RESPA) Lenders must provide the Settlement Cost Information Booklet (either by hand delivery or mail) within _________ business days after receiving the application from the potential borrower.
(RESPA) RESPA covers:
(RESPA) RESPA imposes restrictions on which of the following?
Amount collected for escrow accounts
(RESPA) RESPA mandates disclosure requirements for which types of loans?
An FHA 203k rehab loan to buy and repair a duplex
(RESPA) The best way to describe the GFE is:
A close estimate of fees using the broker’s knowledge
(RESPA) The difference between the GFE and HUD-1 is:
Estimate vs. actual
(RESPA) The Uniform Settlement Statement must conspicuously and clearly itemize all charges to the borrower and the seller in connection with the settlement, as well as indincating whether any title insurance premium included in the charges covers or insures the following:
The Uniform Settlement Statement must conspicuously and clearly itemize all charges to the borrower and the seller in connection with the settlement, as well as indicating whether any title insurance premium included in the charges covers or insures the lender's interest in the property, the borrower's interest, or both.
(RESPA) What is the primary purpose of RESPA
Advance disclosure of closing costs and prohibitions on referral fees
(RESPA) When can a borrower be charged for a HUD-1 preparation?
(RESPA) When originating a mortgage loan for a company that has an ABA title company, one can pay a fee for referral if….
No referral fee is allowed; only dividends can be paid
(RESPA) YSP must be shown on the:
GFE and HUD-1
(TILA) What is the federal agency responsible for issuing and implementing regulations for TILA?
The Federal Reserve
(TILA) What is the fine for a violation of TILA?
$5,000 and or 1 year imprisonment unless class action then $500,000 or 1% of net worth
(TILA) _______________ must be reported to borrowers in the Truth in Lending disclosure.
(TILA) A borrower would be required to receive a CHARM booklet and ARM disclosure for all but which of the following scenarios
A borrower decides to lock in a on a 2-1 buydown program
(TILA) A Truth In Lending Statement must show all of the following?
(TILA) According to TILA, which is required for an ARM?
(TILA) Evidence of compliance with the TILA must be retained for at least ______ year(s) after the date of disclosure.
(TILA) If a trigger term is used when advertising a ___________ credit plan, the other major terms (including APR) must also be disclosed.
(TILA) If we are advertising a mortgage loan with a 6.99% APR under the TILA, what other information is required to be disclosed?
When the APR is used, you have met the TILA requirements. No additional information must be included.
(TILA) Regulation Z applies to businesses that extend credit if which of the following
Correct! Regulation Z's provisions cover any advertisement for a consumer credit arrangement that involves all of the following: • Must be offered to a "natural person" (i.e. an individual). • Must be for personal, family, household, or agricultural purposes. • Must include a finance charge or be repaid in more than four (4) installments.
(TILA) The TIL Disclosure is provided within:
3 business days of application
(TILA) The Truth in Lending Act compels lenders to disclose to refinance borrowers that they are entitled to a __________ business day rescission period.
(TILA) The Truth in Lending Act is also known as what?
(TILA) The Truth in Lending form must be given:
Within 3 business days after application
(TILA) TILA advertising requirements state that if the payment is shown in an ad:
Must also show terms of loan, APR, and down payment
(TILA) TILA is part of what act?
Consumer Credit Protection Act
(TILA) TILA requires all of the below information to be disclosed to the applicant when they are applying for an Adjustable Rate Mortgage
Frequency of changes in the APR
Possibility of changes in the payment amount over time
Index used to determine the ARM
(TILA) Under TILA, as it relates to the initial disclosures, what is the definition of a "business day?"
A day where the creditor is customarily open to the public for carrying on substantially all the creditor's business functions
(TILA) Under TILA, which of the following is included in the finance charge calculation?
Mortgage broker fee
(TILA) What does the Truth in Lending Act require mortgage originators to disclose to the borrower?
Credit terms for the transaction
(TILA) What is on the TIL?
The interest rate
The payment schedule
Total of payments
(TILA) Which are all prepaid finance charges?
Origination fee and broker fee
(TILA) Which of the following payments must be made by the lender in both individual and class action lawsuits for violations of the Truth in Lending Act?
(TILA) Which transactions are not covered under TILA?
Business and commercial
(TILA) While a lender does not have to advertise every single plan he or she offers, it is unlawful to conceal more ______________ plans
(TILA) While __________ terms require disclosures, general advertising terms do not, because they do not refer to repayment period length or down payment cost.
While trigger term statements are specific enough to warrant a full disclosure of other terms involved in the advertised credit plan, more general statements do not require such disclosures, because they do not refer to repayment period length or down payment cost
A Lender is allowed to deny an applicant based upon which factors?
Applicants income is unstable
Advertising an attractive interest rate which is not available is a violation of which of the following?
Based upon the Fair Lending Laws, you are only permitted to ask a loan applicant:
The ECOA permits loan officers to ask an applicant to provide their race for the purpose of meeting HMDA requirements. You are not permitted to inquire of religion and childbearing intentions.
False information submitted by an applicant on a federally covered loan, the applicant's penalty may include?
Up to 30 years incarceration and a $1,000,000 fine
Federal fair lending laws exclude _________ from consideration when originating a loan.
ECOA (Regulation B) and the Fair Housing Act permit consideration of adequacy and stability of income and employment or poor credit history yet the Fair Housing Act does prohibit discrimination based on family status, including pregnancy, potential pregnancy, or adoption as long as the applicant meets the lenders underwriting guidelines
Gramm-Leach-Bliley defines nonpublic information as?
The borrowers current asset information
If a consumer is denied credit, the ECOA requires the lender to forward the Notice of Adverse Action. This notice provides all of the following information except:
If a creditor did not inform the borrower within 30 days of a credit decision that was considered an adverse action, the creditor violated which law or supporting regulations?
one way to remember that ECOA requires an adverse action notice is thinking of ECOA prohibits discrimination by procrastination (delaying a decision until applicant withdraws loan application)
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