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Who is responsible for ensuring that the Closing Disclosure is delivered to the consumer? A.The creditor B.The loan processor C.The consumer D. The CFPB - ANSWER A. the creditor Which law r... estricts the sharing of information given when a consumer applies for a mortgage loan? A. Fair Credit Reporting Act B. FTC Disposal Rules C. Gramm-Leach-Bliley Act D. Consumer Regulatory Protection Act - ANSWER C. Gramm-Leach-Bliley Act Which document actually contains the borrower's promise to repay the loan? A. The deed B. The mortgage C. The note D. The TIL Disclosure - ANSWER C. The note The practice of intentionally targeting borrowers in poor or underserved areas with predatory loans is known as: A. Redlining B. Steering C. Misappropriation D. Reverse redlining - ANSWER D. Reverse redlining If a lender wants to obtain copies of a borrower's tax returns, the borrower is asked to sign what? A. 4506-T B. A waiver of financial information C. 1003 D. 1040 - ANSWER A. 4506-T An increase in fees and issuance of a revised Loan Estimate to reflect the new amounts is permitted in which of the following cases? A. The creditor failed to provide an accurate estimate of transfer taxes and wants to issue a revised Loan Estimate showing actual costs B. The consumer is not allowed to shop for flood zone determination services and the actual costs are more than the estimated costs C. The title company affiliated with the lender decides to charge more for its services than initially disclosed D. The consumer has failed to respond to a loan officer within ten business days and the lending terms have changed - ANSWER D. The consumer has failed to respond to a loan officer within ten business days and the lending terms have changed All of the following are true of FHA fixed-rate loans, except: A. They require upfront MIP on all loans B. They are available in 15- and 30-year terms C. The borrower is only required to carry MIP until the LTV reaches 78% D. The borrower must make at least a 3.50% investment - ANSWER C. The borrower is only required to carry MIP until the LTV reaches 78% Previously used as compensation for mortgage professionals, yield spread premiums must now be used: A.As referral fees paid to the broker by a settlement service provider B. As credits to the borrower to help pay settlement costs C. As commissions paid in addition to mortgage broker compensation D. As credits off of the interest rate of the loan - ANSWER B. As credits to the borrower to help pay settlement costs On which portion of the loan application would one find a street address and legal description of the property? A. Section X B. Section II C. Section XV D. Section III - ANSWER B. Section II Which of the following best describes the legal consequences of providing an inflated description of income on a loan application? A. It is not an illegal act, but may impact the consumer's credit score B. It is a violation of multiple federal lending laws and constitutes fraud C. It is not a violation of criminal laws, and any penalties imposed are civil, not criminal D. It is not illegal if the applicant inflates his or her income to secure approval for the loan but fully intends to repay the obligation - ANSWER B. It is a violation of multiple federal lending laws and constitutes fraud Which of the following is permitted as a result of a referral? A. A free monthly pass to the gym with each closing B. A well-written thank you note C. A coffee card for each client D. The names, phone numbers, and annual incomes of clients who have applied for loans - ANSWER B. A well-written thank you note What agency ensures that GSEs are using sound financial practices and have adequate capital to engage in the mortgage business? A. The Federal Housing Finance Agency B. The Department of Housing and Urban Development C. The Office of the Comptroller of the Treasury D. The Office of Federal Housing Enterprise Oversight - ANSWER A. The Federal Housing Finance Agency What is the maximum fee that may be charged for preparation of the Closing Disclosure? A. $50 B. .1% of the loan amount C. $0 D. 1% of the loan amount - ANSWER C) $0 Don is refinancing his home in order to save money. If the loan goes through, his payment will drop from $2,000 per month (PITI) to $1,500 per month (PITI). Don's gross income each month is $6,800, but he has a $300 car payment, a $150 credit card payment, and monthly alimony payments of $1,300. What is Don's housing ratio on the proposed loan? A.29% B.31% C.48% D. 22% - ANSWER D) 22% In this case, his proposed housing expense (PITI) will be $1,500/month. $1,500 / $6,800 = 22% Mishandling borrowers' funds or improperly managing their funds is a practice prohibited by: A. TILA B. FNMA C. RESPA D. GLB - ANSWER C. RESPA When a loan is characterized as "conforming," it means the loan: A. Requires no PMI B. Meets guidelines established by Fannie Mae and Freddie Mac C. Meets standards for a government program D. Is a 30-year fixe - ANSWER B. Meets guidelines established by Fannie Mae and Freddie Mac A buyer pays $200,000 for a home and gets a fixed-rate loan from his lender at 5.75%. He puts $40,000 down. What is the LTV on this loan, and does the buyer have to pay PMI? A. 80% and YES B. 90% and YES C. Unknown - need to know the term of the loan to determine D. 80% and NO - ANSWER D. 80% and NO Which of the following is true of disclosures required by the Homeowners Protection Act? A. Borrowers can accelerate payment and request to cancel MIP as soon as they reach 80% LTV B. Lenders can require homeowners to purchase PMI if they have an LTV of less than 80% under certain circumstances C. High-risk loans do not meet the guidelines of FHA, VA, or USDA D. Borrowers with lender-paid PMI are not protected by the HPA - ANSWER D. Borrowers with lender-paid PMI are not protected by the HPA An appraiser uses any one of three appraisal approaches to determine the value of a property. They are: A. Sales comparison (or market), cost, and income B Sales, cost, and comparable C. Market comparison, cost comparison, and investment approach D. Sales comparison, market comparison, and subject comparison - ANSWER A. Sales comparison (or market), cost, and income A VA loan referred to as an "IRRRL" is an: A. Interest Reduction and Refinance Loan B. Interim Rate Refinance Reduction Loan C. Interest Rate Reduction Refinance Loan D. Interest Rate Refinance Return Loan - ANSWER C. Interest Rate Reduction Refinance Loan The Smiths are buying a house for $200,000. After their 10% down payment, they've decided to pay two discount points. What is the dollar amount of the discount points? A. $2,000 B. $4,000 C. $3,600 D. $3,800 - ANSWER C. $3,600 The most commonly used type of reverse mortgage is known as a: A. Home Equity Line of Credit B. Home Equity Conversion Loan C, Home Equity Conversion Mortgage D. Home Equity Consolidation Mortgage - ANSWER C, Home Equity Conversion Mortgage The Guidance on Nontraditional Mortgage Product Risks examined and made recommendations on the use of what types of loans? A. Interest-only, payment-option ARMs, and other nontraditional adjustable-rate mortgages B. Interest-only, payment-option ARMs, and reverse mortgages C. 30-year and 15-year fixed loans made to elderly borrowers D. Payment-option ARMs, limited documentation loans, and reverse mortgages - ANSWER A. Interest-only, payment-option ARMs, and other nontraditional adjustable-rate mortgages The Telemarketing Sales Rule prohibits calls made to consumers: A. After 8:00 a.m. or before 9:00 p.m. B. Who have established a business relationship within the last 12 months C. Who have specifically asked a mortgage professional not to contact them D. Not listed on the Do-Not-Call Registry - ANSWER C. Who have specifically asked a mortgage professional not to contact them Businesses that conduct telemarketing are required to access the Do-Not-Call Registry every _______ in order to maintain an updated database of people on the Do-Not-Call List. A. 60 days B. 45 days C. 31 days D. Three months - ANSWER C. 31 days The front end ratio is A. A comparison of the borrower's total monthly obligations and gross monthly income B. A comparison of the value of the property and the amount of the loan C. A comparison of the borrower's monthly housing expense and his or her income D. A comparison of the amount of the loan and the borrower's income - ANSWER A) A comparison of the borrower's total monthly obligations and gross monthly income The regulations issued for the implementation of ECOA are known as: A. Regulation X B. Regulation C C. Regulation B D. Regulation E - ANSWER C. Regulation B In accordance with Section 8 of the Real Estate Settlement Procedures Act, a mortgage broker may receive compensation for which of the following? A. Taking information to be used in a loan application and submitting the file to processing B. Referring a borrower to a real estate agent C. Submitting a loan to a lender D. The reasonable value of goods and/or services actually performed or provided - ANSWER D. The reasonable value of goods and/or services actually performed or provided All of the following are part of the underwriter's review of collateral, except: A. Sales contract B. Flood zone verification C. Bank statements D. Appraisal - ANSWER C. Bank statements The initial Loan Estimate must be delivered at least how many days prior to consummation? A.Seven business days B.There is no timing requirement C.Three business days D.One business day - ANSWER A.Seven business days Under RESPA, the initial escrow account statement: A. Is due no later than the time of settlement B.Is due no later than the time of application C.Is due no later than 45 days after settlement D. Is due no later than 45 days after application - ANSWER C.Is due no later than 45 days after settlement Each violation of federal law prohibiting bank fraud may lead to a penalty of up to ________, imprisonment for up to ________, or both. A. $50,000; 40 years B. $100,000; 50 years C. $1 million; 30 years D. $2 million; 10 years - ANSWER C. $1 million; 30 years Which of the following individuals would not be permitted to hold POA for a borrower? A.The borrower's parent B. The borrower's child C. The borrower's mortgage loan originator D. The borrower's fiancé - ANSWER C. The borrower's mortgage loan originator An ARM loan has a 4.00% start rate, and it is time for the first adjustment to be made. It has a periodic cap of 1% and a lifetime cap of 5%. Assuming that the rate is going to increase, what will the rate be after its first adjustment? A. 9.00% B. 4.00% C. 7.00% D. 5.00% - ANSWER D. 5.00% A mortgage broker structures a higher-priced loan with two points in borrower credit because the borrower has limited cash to close, and suggests the borrower use the premium generated to subsidize the closing costs. After consideration, the borrower agrees and moves forward. This is: A. Illegal and ethical B. Illegal and unethical C.Legal and unethical D. Legal and ethical - ANSWER D. Legal and ethical This is calculated by dividing PITI by the borrower's monthly gross income: A. Net tangible benefit B. Housing expense ratio C. Total debt ratio D. Loan suitability - ANSWER B. Housing expense ratio Regulations in Section 32 of Regulation Z deal strictly with: A. Licensing standards placed in effect by the Housing and Economic Recovery Act B. The interactions between mortgage professionals and real estate agents C. Consumer protections triggered by high-cost loan scenarios D. The amount a borrower should expect to be charged as an annual percentage rate - ANSWER C. Consumer protections triggered by high-cost loan scenarios A buyer pays $200,000 for a home and gets a fixed-rate loan from his lender at 5.75%. He puts $40,000 down. What is the LTV on this loan, and does the buyer have to pay PMI? A. 90% and YES B. 80% and YES C. 80% and NO D. Unknown - need to know the term of the loan to determine - ANSWER C. 80% and NO When may a homeowner request PMI to be cancelled? A. When the lender informs him/her that it is terminating PMI B. As soon as his/her equity position reaches at least 22% C. As soon as the five-year required minimum is met D. As soon as his/her equity position is 20% or greater - ANSWER D. As soon as his/her equity position is 20% or greater In an adjustable-rate mortgage, this term refers to the maximum amount by which the interest rate may vary during its lifetime. A. Lifetime cap B. Payment cap C. Periodic rate adjustment cap D. Annual cap - ANSWER A. Lifetime cap An FHA loan is insured by the federal government against: A. Flood or other hazard B. Market fluctuation C. Fraud or misappropriation D. Foreclosure - ANSWER D. Foreclosure The generally accepted appraisal standards in the United States are known as: A.ASB B. FinCEN C. USPAP [Show More]

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