20 HOUR FINAL STUDY GUIDE

Question 1

A person who takes a residential mortgage solution possible depending on their needs and qualifications

Answer 1

MLO Job description

Question 2

What is the role of the closing agent?

Answer 2

A third party that preforms loan closings on behalf of the lender

Question 3

Unique responsibility to the states only?

Answer 3

Grant revoke and suspend licenses

Question 4

What is the purpose of ECOA?

Answer 4

New law requiring lenders to make credit available equally without discrimination based on race, color, religion, national origin, age, sex, mental status, or receipt of income from public assistant programs

Question 5

What are the APR threshold for a HOEPA lone?

Answer 5

6.5% above APR for Low risk 8.5% above the APOR

Question 6

Why is it important for an MLO to remain in good financial standing?

Answer 6

Because we’re in the industry of lending money if you’re financial character doesn’t look good institutions or consumers may question if you’re fit for the job

Question 7

What is the difference of the charm booklet and early arm disclosures? 

Answer 7

Charm booklet is to educate customers on the pros and cons associated with adjustable rate mortgages
Early arm disclosures, educate customers on their arm that they’re using on their loan specifically

Question 8

Breakdown of pre-licensing education

Answer 8

20 hours in total 30 hours fed law three hours of ethics two or more hours on standards related to nontraditional mortgages and 12 hours of undefined education

Question 9

When does respa apply

Answer 9

Govern all federally regulated loans that are secured by residential property
(1-4 unit property)

Question 10

When doesn’t Respa apply?

Answer 10

25 acres or more
no agriculture loans
no business/commercial
property loans
construction loans
bridge loans nothing
in the secondary market

Question 11

Who must be licensed in order to write mortgage loans?

Answer 11

MLOS @non-depository institutions
Mortgage brokers
Independent contractors

Question 12

What type of supporting documentation with a borrower making commission only need to send during processing?

Answer 12

Two years of tax returns

Question 13

Describe the five different types of industry fraud

Answer 13

Appraisal fraud
Builder bail out
Predatory lending
Chunking
Loan flipping

Question 14

What are the eight considerations of ability to repay

Answer 14

1 amount of new monthly payment
2 other monthly payments
3 employment
4 income and assets
5 monthly mortgage related obligations
6 DTI and residual income
7 credit history
8 current debt obligations

Question 15

How is a jumbo loan different from a super conforming loan?

Answer 15

Jumbo loans exceed standard sit by the federal housing agencies, but super conforming loans is if a buyer is in a high cost area and they lower the standards to conform the consumer

Question 16

These two forms are specific to a VA loan

Answer 16

COE or certificate of eligibility
And VA form 26–1880

Question 17

What is Respa?

Answer 17

Real estate settlements procedure act providing protection to customers the federal law that governance oversight cost associated with the mortgage and the entire real estate transaction

Question 18

How long a borrower would need to pay MIP on the FHA loan

Answer 18

MIP on a FHA loan is 11 years for loans with 90% or less if the LTV is higher than 90% mortgage insurance premium stays on for the length of the loan

Question 19

This disclosure comes from HPA and what does it tell the borrower

Answer 19

Notice of right to cancel PMI

Question 20

What did the Dodd Frank act do?

Answer 20

Besides strengthening the consumer protection responsibilities, they also established the consumer financial protection, Bureau

Question 21

What are the prohibited factors under ECOA?

Answer 21

Sex race, color, religion, national Orange, middle age, public assistance, financial counseling, health, status, property location


Question 22

What are the three most commonly used indicies for adjustments on an arm?

Answer 22

Line at 10% at net 15% and gross at 25%

Question 23

Describe tangible net benefit

Answer 23

Changes that lower the payment overtime for example lowering the interest rate or eliminating a balloon payment

Question 24

Describe the 4 forms under BSA/AML

Answer 24

Fin cen form 104
Currency transaction report
Form 105 report of international transportation report of foreign in financial accounts and suspicious activity report

Question 25

Used to inform consumers about credit through disclosures about its terms and cost

Answer 25

What is the purpose of Tila

Question 26

What is negative amortization

Answer 26

Happens when you are not paying enough to cover all of the interest due loan balances goes up instead of down

Question 27

Who is the mortagagor

Answer 27

Borrower

Question 28

What is the difference between simple interest rate and APR?

Answer 28

Simple interest is paid only on the original principle of the loan APR includes all financing cost. It provides a clear picture of the cost of the loan. 

Question 29

What does Tila say about advertisements?

Answer 29

Only available credit terms may be advertised Any disclosure of information and ad must be clear If the APR can change after consideration, you must say it If you use trigger terms like down payment, you must say amounts terms, and spell out APR fully annual percentage rate

Question 30

List out a characteristics of a qualified mortgage

Answer 30

Points and fees kinetic 3% of the loan amount for loans greater than or equal to $130,461 or 8% Arms are underwritten based on the maximum interest rate in the first five years 5 to 1, seven to one, 10 to 1 hybrid arms Income assets are verified and documented No negative or interest only payments Fix rate mortgages are underwritten based on a fully schedule Maximum term is 30 years or less No balloon payments two times or more than normal payment APR over APO must be less than the following limits for loan limits

Question 31

What time frame are you allowed to contact client in?

Answer 31

8 AM to 9 PM in their time zone

Question 32

What is non-public personal information or NPPI

Answer 32

Information like Social Security, your bank account, balance, etc.

Question 33

What are three ways that a loan can become a section 32 loan under Tilla what are all the names for this type of loan?

Answer 33

If the fees 5% on loan amount of $26,092 or more or total points in fees compared to the loan amount if the loans APR is more than 6.5% above the APO 8.5% for a mobile home

Question 34

List the sections of TILA and briefly describe their purpose

Answer 34

Section 32 homeowner equity protection act provides protection for borrowers receiving high cost loans Section 35 higher priced mortgage loans Made to help customers who have qualification limits Section 36 The loan originator rule CFPB added this to address the concerns over the influence of compensation for MLOS

Question 35

Fair credit reporting act versus FACTA

Answer 35

Fair credit reporting act insurance customers accurate, and fair credit reporting by credit reporting agencies Factor was born to prevent identity theft mainly was invented because of the boom of the Internet

Question 36

Two disclosures that come from TRID

Answer 36

Loan estimate and closing disclosure

Question 37

Describe the steps in the title process

Answer 37

Title Completed title report Technical review Preparation of commitment Title insurance

Question 38

Who draws the flood zone map who determines if flood insurance is needed?

Answer 38

Special flood, hazard area SFHA 

Question 39

How many state in territorial mortgage regulated entities are there?

Answer 39

59

Question 40

What is another name for the safe act?

Answer 40

Secure and fair enforcement act

Question 41

T OR F A non-conventional loan can only be used to finance primary residencies

Answer 41

False

Question 42

T AND F Only the main borrow has the right to send if it apply transaction

Answer 42

False

Question 43

In order to verify collateral and underwriter will take a look at the appraisal in the home inspection

Answer 43

True if they also have an home inspection

Question 44

T OR F A first time VA homebuyer with a 0% down payment wire set funding fee of 2.15%

Answer 44

True

Question 45

T or F All non-conventional loans are government backed

Answer 45

True

Question 46

T or F A conventional loan is a private loan meaning it is not back by the government

Answer 46

False

Question 47

HMDA detects patterns of discrimination in landing transactions, true or false

Answer 47

False

Question 48

The FHA requires counseling

Answer 48

False

Question 49

The three payment types on an option. ARM are flat payments, fully amassed payments and principal only payments true or false.

Answer 49

True

Question 50

The margin is the lenders profit and remain the same the entire time of the loan

Answer 50

False

Question 51

Caps or voluntary limits as to how high or high low and interest rate on arm can adjust at any given time true or false

Answer 51

True

Question 52

BSA/AML is overseen by the department of treasury and fINCen

Answer 52

True 

Question 53

Tila gives us terminology of adverse action, true or false

Answer 53

False that is Ecoa

Question 54

UFMIP stands for up Fort mortgage insurance premium t or f

Answer 54

True

Question 55

The most common approach in appraisal is the cost approach

Answer 55

False

Question 56

Section 8 of the Ula requires Amos to ask about borrowers race, ethnicity and sex 

Answer 56

True

Question 57

The URAR is form 1003 True or false

Answer 57

False form 1003 is the urla

Question 58

The three types of reverse mortgages are single purpose, proprietary, and FHA hecm

Answer 58

True

Question 59

When there is a change in circumstance, we will redisclose the LE to our Borrower

Answer 59

True

Question 60

Eco requires at the lender submits the L/AR yearly t or f

Answer 60

False

Question 61

For ctlv we take combined balances of all liens or loans that a borrower has T or F

Answer 61

False only house

Question 62

True or false adverse action means credit is approved

Answer 62

False