MCQs 1of4 Flashcards by Antonio Rullo

A discount point is BEST described as a charge the borrower pays to

a. A lender to decrease the 
    interest rate on the 
    mortgage loan
b. A mortgage broker at the  time of application to obtain a favorable rate
c..The seller  as part of the closing costs of a loan
d. A lender to ensure against foreclosure

a. A lender to decrease the
interest rate on the
mortgage loan

How well did you know this?

Not at all

Perfectly

A buyer has made an earnest money payment of $5,000. The buyer pays an additional $2,000. in option money to be credited at closing on a property with a sale price of $160,000. If the required down payment is 20%, how much additional money will the buyer need to provide toward the don payment at closing?

a. $32,000
b. $27,000
c. $30,000
d, $25,000

d, $25,000

How well did you know this?

Not at all

Perfectly

If an applicant works 40 hours a week and is paid $13.52 per hour, what is the applicants monthly income?

a. $2,136.20
b. $2,343.47
c. .$2,379.52
d. $2,487.68

b. $2,343.47

Hourly x hours worked during week x weeks in a year (52) / 12 months

How well did you know this?

Not at all

Perfectly

The requirements for private mortgage insurance is generally discontinued when the loan -to-value ratio falls below.

a. 20%
b. 50%
c..80%
d, 90%

c..80%

How well did you know this?

Not at all

Perfectly

Which of the following documents itemizes all settlements costs including lender charges?

a. Agreement of Sale
b. HUD-1/Closing Disclosure
c..Form 1003
d, Forbearance agreement

b. HUD-1/Closing Disclosure

How well did you know this?

Not at all

Perfectly

According to the Truth-in-Lending Act (TiLA), the term refinance applies to:

a. A change in payment 
    schedule
b. A reduction in annual 
    percentage rate
c..the renewal of a single 
    payment obligation with no 
    change in the original 
    terms
d, The satisfaction of an 
    existing obligation and its 
    replacement by a new 
    obligation

d, The satisfaction of an
existing obligation and its
replacement by a new
obligation

How well did you know this?

Not at all

Perfectly

What does a loan originator use to determine the estimated value of a property based on an analytical comparison to similar property sales?

a. An appraisal
b. A market survey
c..An area survey
d, A cost-benefit analysis

a. An appraisal

How well did you know this?

Not at all

Perfectly

Which of the following methods of disclosure does NOT meet the requirements of the Equal Credit Opportunity Act (ECOA)?

a. E-mail
b. Mailed letter
c. Telephone
d, Faxed letter

c. Telephone

How well did you know this?

Not at all

Perfectly

The term “20 basis points” expressed as a percentage is

a. 0.02%
b. 0.20%
c..2.00%
d, 20.00%

b. 0.20%

How well did you know this?

Not at all

Perfectly

According to the Truth-in-Lending Act (TILA), which of the following fees is EXCLUDED from the calculation of the annual percentage rate?

a. Hazard insurance
b. Wire transfer
c..Prepaid interest
d, Mortgage insurance
premiums

a. Hazard insurance

How well did you know this?

Not at all

Perfectly

FHA loans are:

a. Partially guaranteed
b. 100% insured
c. Exempt
d, Entitled

b. 100% insured

How well did you know this?

Not at all

Perfectly

The late fee for a conventional loan is:

a. 3% of principle and interest
b. 4% of principle and interest
c. 5% of principle and interest
d, 10% of principle and interest

c. 5% of principle and interest

How well did you know this?

Not at all

Perfectly

A funding fee is required for a:

a. FHA loan
b. VA loan
c. Jumbo loan
d, Conventional loan

b. VA loan

How well did you know this?

Not at all

Perfectly

A Mortgage Insurance Premium is required on:

a. FHA loan
b. VA loan
c. Jumbo loan
d, Conventional loan

a. FHA loan

How well did you know this?

Not at all

Perfectly

The Mortgagee is:

a. Borrower
b. Lender
c..Closing Agent
d, Mortgage broker

b. Lender

How well did you know this?

Not at all

Perfectly

The borrower does NOT sign which document

a. Deed
b. HUD-1/Loan Disclosure
c..Mortgage
d, Note

a. Deed

How well did you know this?

Not at all

Perfectly

Which document is usually NOT recorded?

a. Assignment of mortgage
b. Note
c..Deed
d, Mortgage

b. Note

How well did you know this?

Not at all

Perfectly

A mortgage title insurance policy is NOT:

a. Based loan amount
b. Transferable
c..Optional
d, Required by the lender

c..Optional

How well did you know this?

Not at all

Perfectly

Which parties sign the deed?

a. Grantor, Grantee and two 
    witnesses
b. Grantor and two witnesses
c. Grantee and two  
    witnesses
d, Grantee only

b. Grantor and two witnesses

How well did you know this?

Not at all

Perfectly

When the mortgagor and the mortgagee title insurance policies are issued at the same time, this is known as:

a. Simultaneous issue
b. Concurrent issue
c. Subsequent issue
d, Dual issue

a. Simultaneous issue

How well did you know this?

Not at all

Perfectly

A shrubbery is on example of an:

a. Encumbrance
b. Easement
c. Entitlement
d, Acceptable title
impediment

d, Acceptable title impediment

How well did you know this?

Not at all

Perfectly

A loan on personal property only is known as:

a. Package mortgage
b. Chattel mortgage
c. Furnishing mortgage
d, Exotic mortgage

b. Chattel mortgage

How well did you know this?

Not at all

Perfectly

Which of the following is not a characteristic of a Tenants in Common form of ownership

a. Equal shares
b. Buy at different times
c. Right of survivorship
d, Ability to share

c. Right of survivorship

How well did you know this?

Not at all

Perfectly

PITI payments do NOT include which of the following:

a. Principal
b. Funding Fee
c. Hazard Insurance
d, Interest

b. Funding Fee

How well did you know this?

Not at all

Perfectly

Who does Fannie Mae hold responsible for the quality of an appraisal? a. Appraiser b. Borrower c. Mortgage d, Lender

d, Lender

Which law is known as Regulation B? a. Truth-in-Lending b. Real Estate Settlement Procedures Act c. Equal Credit Opportunity Act d, Patriot Act

c. Equal Credit Opportunity | Act

which law prohibits discrimination by lenders? a. Truth-in-Lending b. Real Estate Settlement Procedures Act c. Equal Credit Opportunity Act d, Patriot Act

c. Equal Credit Opportunity | Act

A property sold for $200,000 and was appraised at 180,000. The borrower received a loan for 150,000. What is the loan-to-value a. 75% b. 83.3% c. 90% d, 92.4%

b. 83.3%

How many days does a lender have to send an adverse action notice? a. 5 b. 10 c. 30 d, 60

c. 30

The GFE/Loan Estimate must be mailed or given to the borrower within how many days after receiving the signed application? a. 3 business days b. 7 business days c. 10 business days d, 30 business days

a. 3 business days

The enforcement of a lien is known as a: a. Closing b. Foreclosure c. Warranty inspection d, Police Action

b. Foreclosure

What minimum percentage of ownership is a related service requires a conflict of interest disclosure? a. 5% b. 10% c. 25% d, 50%

b. 10%

What minimum percentage of ownership qualifies an individual as self-employed? a. 5% b. 10% c. 25% d, 50%

c. 25%

A salaried employee may have to produce which of the following documents to obtain a loan a. 90 day pay stubs b. 2 years W2s c. Profit and Loss statement d, Balance sheet

b. 2 years W2s

How many months must left on an automobile lease to include it as a debt? a. 2 months b. 5 months c. 10 months d, It is always included

d, It is always included

Which law defines the right of rescission? a. Truth-in-Lending b. Real Estate Settlement Procedures Act c. Equal Credit Opportunity Act d, Patriot Act

a. Truth-in-Lending

How long after the application date must social security payments continue to be received in order to count as income? a. 3 months b. 10 months c. 2 years d, 3 years

c. 2 years

Credit reports on new construction are good for how many days? a. 90 days b. 120 days c. 180 days d, 225 days

b. 120 days

Which clause in a mortgage allows a lender to increase the interest rate? a. Defeasance b. Escalation c. Acceleration d, Exculpatory

b. Escalation

Which clause in a mortgage prevents the lender from foreclosing unless the borrower is in default? a. Defeasance b. Escalation c. Acceleration d, Exculpatory

a. Defeasance

The lender has how may days to send the Satisfaction of Mortgage letter to the borrower once the loan balance is paid? a. 30 days b. 60 days c. 90 days d, 120 days

b. 60 days

Which of the following increases cap rate? a. Lower purchase price b. Increase purchase price c. Decrease cash flow d, Increase interest rate

a. Lower purchase price

Who should applicants contact if they have questions about their credit score or credit information? a. Credit reporting agency b. Lender c. Mortgage broker d, Attorney

a. Credit reporting agency

Who is responsible for maintaining the national flood maps? a. HUD b. FEMA c. FHA d, VA

b. FEMA

THe VA appraisal is know as a: a. CRV b. Veteran appraisal report c. Fannie Mae 1025 d, AVA

a. CRV Certificate of Reasonable Value

Fannie Mae's automated underwriting system is known as: a. Fannie Mannie b. Software helper c. Desktop Underwriter d, Loan Prospector

c. Desktop Underwriter

There are 10 days left in the month. The purchase price is $150,000, the loan amount is $100,000 and the interest rate is 6%. How much mortgage interest must the borrower pay at closing? a. $164.38 b. $250.00 c. $440.20 d, $2,739.73

a. $164.38 Loan amount x interest rate/number days in year number of days left in month 100,000. x 0.06/365x10 =164.38

Private Mortgage Insurance is automatically canceled when the loan to value reaches what level? a. 55% b. 70% c. 78% d, 80%

c. 78%

Which types of loans are meant for rural areas? a. VA b. FHA c. USDA d, RAL

c. USDA

The purchase price of a home is $200,000 and the loan amount is $180,000. The borrower pays 6% interest with 1 discount point and 1 origination point. What is the cost of the points a. $1,800 b. $2,000 c. $3,600 d, $4,000

c. $3,600 Discount points x loan amount = Point value $180,000. x .02 = $3600.00

If the Gross Rent Multiplier (GRM) decreases, the property value: a. Increases b. Decreases c. Does not change d, Can increase or decrease

b. Decreases

What is the maximum amount of VA seller concessions a. 2% b. 3% c. 4% d, 5%

c. 4%

When a property increases in value for any reason this is known as: a. Acceleration b. Appreciation c. Accumulation d, Acclimation

b. Appreciation

Which appraisal approach is most suitable for an office building ``` a. Sales comparison approach b. Cost approach c. Income capitalization approach d, Tenant collection approach ```

c. Income capitalization | approach

Which of the following is incorrect regarding an adjustable rate mortgage? a. The index is fixed b. The margin is fixed c. There are rate caps on both the adjustment period and the life of the loan d. LIBOR is a typical index used

a. The index is fixed

Which of the following is NOT a fully amortized loan? a. Term mortgage b. Fixed-rate mortgage c. Adjustable-rate mortgage d, Bi-weekly mortgage

a. Term mortgage

Which of the following is a negatively amortizing loan? a. Reverse mortgage b. Balloon mortgage c. Term mortgage d, Wrap mortgage

a. Reverse mortgage

Fannie Mae does NOT require: ``` a. 6 months of bank statements b. Verifiable funds c. 2 years of addresses d, Stable 2 year work history ```

a. 6 months of bank | statements

A note is: a. Document that coveys title b. Pledge of the property as collateral for the loan c. Borrower's IOU d, Document that transfers contractual rights to another investor

c. Borrower's IOU

A mortgage is the: ``` a. Document that conveys title b. Pledge of the property as collateral for the loan c. Borrower's IOU d, Document that transfers contractual rights to another investor ```

b. Pledge of the property as | collateral for the loan

An adjustable-rate mortgage can adjust after 2 years with an adjustment cap of 3% per period and a lifetime cap of 7%. The starting interest rate is 4%. What is the maximum interest that can be charged at the time of the first adjustment a. 5% b. 7% c. 10% d, 11%

b. 7%

What is the FHA minimum down payment a. $0 b. 3.5% c. 5% d, 10%

b. 3.5%

Which law is known as regulation C? ``` a. Real Estate Settlement Procedures Act b. Truth-in-Lending Act c. Equal Credit Opportunity Act d. Home Mortgage Disclosure Act ```

d, Home Mortgage Disclosure | Act

What is the minimum down payment for a USDA loan? a. $0 b. 3.5% c. 5% d. 10%

a. $0

How many hours of continuing education are minimally required? a. 8 hours every year b. 14 hours every years c. 14 hours every 2 years d, 20 hours every 2 years

a. 8 hours every year

Who is responsible for completing the HUD-1/Loan Disclosure a. The borrower b. The closing agent c. Loan originator d, The Grantor

b. The closing agent

A mortgagor 's title insurance policy is: a. Transferable b. Required c. Based on purchase price d, Never used

C. Based on purchase price

The assignee of a mortgage and note is participating in the a. Primary lending market b. Capital market c. Secondary mortgage market d, Options market

c. Secondary mortgage | market

VA loans are: a. Partially guaranteed b. Insured c. Exempt d, Entitled

a. Partially guaranteed

The late fee for a VA loan is a. 3% of principle and interest b. 4% of principle and interest c. 5% of principle and interest d, 10% of principle and interest

b. 4% of principle and interest

The purchase price of a home is $375,000 and the appraisal price is $350,000. If the first mortgage is in the amount of $200,000 and the second mortgage is $60,000. What is the combined loan-to-value ratio a. 74.3% b. 80.0% c. 86.7% d, 92.3%

a. 74.3%

The purchase price of a home is $375,000 and the buyer will assume a $175,000 first mortgage. The loan-to-value cannot exceed 85%. What is the maximum amount of the new second mortgage a. $130,000 b. $143,750 c.$162,030 d, $171,260

b. $143,750

What clause in a mortgage allows the lender to call the entire loan balance due? a. Defeasance b. Escalation c. Acceleration d, Exculpatory

c. Acceleration

Which clause in a mortgage prevents the lender from recovering additional assets from the mortgagor if there is a shortfall in the foreclosure proceeds? a. Forbearance b. Escalation c. Acceleration d. Exculpatory

d. Exculpatory

What term describes the intentional delay of action on the part of the lender upon a borrower's default? a. Forbearance b. Escalation c. Acceleration d. Exculpatory

a. Forbearance

Which of the following does not appear in a lock-in-agreement? a. Expiration date b. APR c. Lock-in-fee d, Interest Rate

b. APR

Freddie Mac was originally known as: ``` a. Federal Home loan Mortgage Corporation b. Federal National Mortgage Association c. Fair Discount Interest Rates d, Free Certificate of Deposits ```

a. Federal Home loan | Mortgage Corporation

Fannie Mae allows what amount of fees to be charged to a credit card? ``` a. 1% of the loan amount plus $500 for the appraisal and credit report b. 2% of the loan amount plus $500 for the appraisal and credit report c. 3% of the loan amount plus $500 for the appraisal and credit report d, 4% of the loan amount plus $500 for the appraisal and credit report ```

a. 1% of the loan amount plus $500 for the appraisal and credit report

Loan Prospector can NOT be used for which type of loan a. Conventional b. VA c. FHA d, Commercial

d. Commercial

A five bedroom, one bathroom house is an example of a. Appreciation b. Functional obsolescence c. Economic obsolescence d. Residential allowance

b. Functional obsolescence

Which of the following is NOT a benefit of a FHA loan? a. Favorable interest rates b. Low down payment c. No monthly mortgage insurance d. Assumable

c. No monthly mortgage | insurance

A loan closes on May 14. When is the first mortgage payment due? a. May 15 b. June 01 c. Jun 15 d. July 01

d. July 01

Alimony payments must continue to be received for how long after the application date if they are to be included as income? a. 10 months b. 2 years c. 3 years d. 4 years

b. 2 years

Credit reports are good for how many days after they are pulled for qualifying purposes? a. 60 b. 90 c. 120 d. 180

c. 120

When title is transferred and the buyer assumes no liability for the note, this type of transference is known as: a. Free and clear b. Subject to mortgage c. Assumption d. Novation

c. Subject to mortgage

Which of the follwoing is correct for an adjustable-rate mortgage? ``` a. index - margin = fully indexed rate b. Margin - index = fully indexed rate c. Index + Margin = fully indexed rate d. Index - margin = fully indexed rate ```

c. Index + Margin = fully | indexed rate

The maximum term for a FHA loan is: a. 15 years b. 30 years c. 40 years d. 50 years

b. 30 years

Which of the following is not an involuntary lien? a. IRS lien b. Judgement lien c. Mortgage lien d. Mechanic's lien

c. Mortgage lien

The most comprehensive form of ownership is: ``` a. Real Estate Investment Trust b. Fee simple absolute c. Tenants in common d. Joint tenancy ```

b. Fee simple absolute

Which is NOT a component of a valid contract a. Agreement b. Consideration c. Two Witnesses d. Competent parties

c. Two Witnesses

Which type of co-ownership permits the property to pass to an heir? a. Collaboration b. Tenants in common c. Joint tenancy d. Subordination

b. Tenants in Common

The economic concept which state that a knowledgeable buyer will pay no more for one property than they would pay for an equally desirable comparable property is: a. Principle of Substitution b. Principle of Highest and Best Use c. Principle of Market Value d. Principle of Intelligent Purchases

a. Principle of Substitution

Which law requires the interviewer to complete the Government Monitoring section on the 1003 ``` a. Homeowner's Protection Act b. The Fair and Accurate Credit Transaction Act c. Truth-in-Lending d. The Equal Credit Opportunity Act ```

d. The Equal Credit | Opportunity Act

Which law entitles an applicant to a copy of his property appraisal report? ``` a. Homeowner's Protection Act b. The Fair and Accurate Credit Transaction Act c. Truth-in-Lending d. The Equal Credit Opportunity Act ```

c. Truth-in-Lending | Opportunity Act

Which law is also known as Regulation X a. Truth-in-Lending b. Real Estate Settlement Procedures Act c. Homeowner's Protection Act d. The Equal Credit Opportunity Act

b. Real Estate Settlement | Procedures Act

Which law protects an individual confidential information? a. Truth-in-Lending b. Real Estate Settlement Procedures Act c. Homeowner's Protection Act d. Gramm-Leach-Bliley Act

d. Gramm-Leach-Bliley Act

Who Enforces RESPA violations a. FTC b. CFPB c. FHA d. FCC

b. CFPB

Which law requires that the Special Information booklet be given to borrowers? a. Truth-in-Lending b. Real Estate Settlement Procedures Act c. Homeowner's Protection Act d. The Equal Credit Opportunity Act

``` b. Real Estate Settlement Procedures Act (RESPA) ```

What is the fine for violating the Federal Do Not Call rules a. $5,000 b. $11,000 c. $42,350 d. $60,000

c. $42,350

Which of the following is NOT a loan origination activity? a. Assisting in a refinance b. Assisting in a purchase loan c. Assisting in a loan modification d. Changing the name of debtors on an existing loan

c. Assisting in a loan | modification

A unilateral contract is binding on: a. One party b. Two parties c. The neighbor d. No one

a. One party

Loan originator organizations must keep compensation records for how many years? a. One b. Two c. Three d. Four

c. Three years

Mortgage companies must submit a residential loan origination report to the NMLSR every a. Month b. Three months c. Six months d. Year

b. Three months

How many years must loan originator applicants wait after a felony fraud conviction in order to qualify for a license? a. One year b. Two years c. Five years d. They aren't eligible for licensing

d. They aren't eligible for | licensing

How many years must loan originator applicants wait after having a loan origination license revoked in another state, in order to qualify for a license? a. One year b. Two years c. They aren't eligible for licensing d. They can qualify immediately

c. They aren't eligible for | licensing

Who chooses force-placed hazard insurance companies? a. Lender b. Homeowner c. Attorney d. Loan originator

a. Lender

Which of the following is required for an FHA Streamline refinance loan? a. Credit verification b. New appraisal c. Current on mortgage payments for the last three month d. Income and debt verification

c. Current on mortgage payments for the last three month

What law addresses loan originators' compensation issues a. Truth-in-Lending b. Loan Origination Rule c. Equal Credit Opportunity Act d. Mortgage Compensation Act

b. Loan Origination Rule

Commercial telemarketers are restricted to calling: a. Only on weekends b. Between 10 AM and 10 PM c. Between 8 AM and 9 PM d. There no restrictions

c. Between 8 AM and 9 PM

Commercial telemarketers must search the Do-Not-Call registry a. Every 7 days b. Every 31 days c. Every 180 days d. Once a year

b. Every 31 days

In order to send a fax advertisers must: ``` a. Have an established business relationship with recipient b. Only fax t toll-free numbers c. Include a personal cell phone number on the cover sheet d. Not send faxes across state lines ```

a. Have an established business relationship with recipient

The first page on an advertisers fax must include a. Company's mailing address b. Company's email address c. Company's phone number d. Opt-out instructions

d. Opt-out instructions

What type of real estate co-ownership is only for married couples a. Tenants in common b. Joint tenancy c. Tenancy by the entirety d. Spousal tenancy

c. Tenancy by the entirety

Increasing neighborhood crime exemplifies what type of depreciation? a. Economic obsolescence b. Functional obsolescence c. Physical deterioration d. Unstable deterioration

a. Economic obsolescence

What agency was established to respond to consumer financial complaints? ``` a. Federal Deposit Insurance Company b. Federal Insurance office c. Financial Stability Oversight Council d. Consumer Financial Protection Bureau ```

d. Consumer Financial | Protection Bureau

What law protects homeowner from foreclosure-prevention scams? a. Foreclosure Mediation Rule b. Mortgage Assistance Relief Services Rule c. Truth-in-Lending Act d. Homeowner's Protection Act

b. Mortgage Assistance Relief | Services Rule

Individuals must file a report when they transport how much cash out of the country? a. $5,000 or more b. $10,000 or more c. $50,000 or more d. $100,000 or more

b. $10,000 or more

What type of federal report is filed when financial institutions detect suspicious activity? a. Suspicious Activity Report b. Treasure Alert Report c. Unaccounted Funds Report d. Unexplained behavior Report

a. Suspicious Activity Report

What agency becomes the receiver for some failing financial institutions? ``` a. Federal Deposit Insurance Company b. Federal Insurance Office. c. Financial Stability Oversight Council d. Consumer Financial Protection Bureau ```

a. Federal Deposit Insurance | Company

The ability-to-repay regulation applies to: a. Equity lines of credit b. Reverse mortgages c. Investment home purchases d. Construction loans

c. Investment home | purchases

Which of the following is NOT a feature of a qualified mortgage? a. Positive amortization b. 30 year maximum loan term c. Maximum debt-to-income ratio of 50 percent d. No interest only periods

c. Maximum debt-to-income | ratio of 50 percent

Individuals submit an annual Report of Foreign Bank and Financial Accounts to: a. IRS b. Mortgage lender c. Federal Trade Commission d. Fannie Mae

a. IRS

Which of the following is part of the Mortgage Assistance Relief Services Rule ``` a. Negotiators may be paid an up-front fee b. Borrowers must pay a fee if they cancel their contract with the negotiator c. Negotiators can't interfere with communication between borrowers and lenders d. Negotiators only have to present reasonable lender offers to the borrower ```

c. Negotiators can't interfere with communication between borrowers and lenders

Loan originators are't allowed to receive compensation: a. Based on loan terms b. From a consumer c. From a lender d. Based on the performance of the loan

a. Based on loan terms

High-cost home loans require a borrower to: ``` a. Receive quotes from multiple lenders b. Receive homeownership counseling c. Receive free flood insurance d. Receive 3% seller concessions ```

b. Receive homeownership | counseling

The Truth-in-Lending Disclosure does NOT include a. APR b. Finance charge c. Total amount of payments d. Borrower's credit score

d. Borrower's credit score

Which of the following is NOT true of high-cost home loans? ``` a. Borrower must have a documented ability to pay the loan b. Borrower must have a minimum credit score of 650 c. Prepay penalties are prohibited d. Most balloon payments are prohibited ```

b. Borrower must have a minimum credit score of 650

Which of the following does NOT have zero variance between the GFE and HUD-1 a. Title insurance b. Real estate transfer taxes c. Loan origination fees d. Interest Rate

a. Title insurance

Which of the following can have an unlimited variance between the GFE and HUD-1 a. Hazard insurance b. Recording fees c. Appraisal d. Credit report fee

a. Hazard insurance

What happens if the acceptable variance between the GFE and HUD-1 is exceeded? ``` a. Loan originator faces criminal penalties b. The loan can't be funded c. The excess is refunded to the borrower with 30 days d. The excess is refunded to the borrower with 60 days ```

c. The excess is refunded to | the borrower with 30 days

Which law requires businesses to print only the last five card numbers on a credit card receipt? a. Homeowner Protection Act b. Fact Act c. Gramm-Leach-Bliley d. Dodd-Frank

b. Fact Act

What happens if the acceptable variance between the Loan Estimate and the Closing Disclosure is exceeded ``` a. Loan originator faces criminal penalties b. The loan can't be funded c. The excess is refunded to the borrower with 30 days d. The excess is refunded to the borrower with 60 days ```

d. The excess is refunded to | the borrower with 60 days

A higher-priced home loan is one that has ``` a. More than 5% in fees and points b. More than 8% in fees and points c. APR exceeds the average prime rate by at least 1.5% for the first-lien loans d. Interest rate is higher than 10% ```

c. APR exceeds the average prime rate by at least 1.5% for the first-lien loans

What is the shortest time in which a mortgage purchase loan can close? a. 3 business days b. 7 business days c. 14 days d. 30 days

b. 7 business days

What type of loan gives a borrower money each month? ``` a. Graduated payment mortgage b. Reverse mortgage c. Package mortgage d. Wholesale mortgage ```

b. Reverse mortgage

What type of loan is a non-recourse loan ``` a. Graduated payment mortgage b. Reverse mortgage c. Package mortgage d. Wholesale mortgage ```

b. Reverse mortgage

A lender won't lose money funding what type of loan? a. FHA b. VA c. Conventional d. Construction

a. FHA

A lender that offers mortgage loans directly to the public is a: a. Participating lender b. Private lender c. Wholesale lender d. Retail lender

d. Retail lender

Which disclosure can be initially sent to the borrower within 45 days after closing? ``` a. Affiliated Business Arrangement b. Good Faith Estimate c. Truth-in-Lending d. Initial Escrow Statement ```

d. Initial Escrow Statement

What type of loan is short-term with money advanced in stages? a. Package b. Construction c. Wraparound d. Balloon

b. Construction

A loan originator who accepts an upfront fee for negotiating a loan modification is violating which law a. RESP b. TILA c. HMDA d. MARS

d. MARS

A lender that works with licensed loan originators is a: a. Participating lender b. Private lender c. Wholesale lender d. Retail lender

c. Wholesale lender

What type of mortgage is not guaranteed or insured by the government a. FHA b. VA c. USDA d. Conventional

d. Conventional

What agency became the conservator of Fannie Mae and Freddie Mac ``` a. Federal Housing Finance Agency b. Consumer Financial Protection Bureau c. U.S. Department of Housing and Urban Development d. Internal Revenue Service ```

a. Federal Housing Finance | Agency

HMDA requires lenders to submit their loan application register to the: a. Library of Congress b. Federal Financial Institutions Examination Council c. Federal department of Books and Records d. Nationwide Mortgage Licensing System and Registry

b. Federal Financial Institutions Examination Council

MIP is associated with what type of loan? a. FHA b. VA c. Interest-Only d. Conventional

a. FHA

UFMIP is associated with what type of loan a. FHA b. VA c. Interest-Only d. Conventional

a. FHA

What law requires ARM borrowers to receive the Consumer Handbook on Adjustable Rate Mortgages? a. RESP b. ECOA c. Gramm-Leach-Bliley d. TILA

d. TILA

What law allowed the government to assume control over Fannie Mae and Freddie Mac? ``` a. Homeowners Protection Act b. Housing and Economic Recovery Act c. Home Mortgage Disclosure Act d. Truth-in-Lending Act ```

b. Housing and Economic | Recovery Act

What law passed in 2010 in response to the financial meltdown and recession? a. Truth-in-Lending b. Gramm-Leach-Bliley c. Dodd-Frank Wall Street Reform and Consumer Act d. Home mortgage Disclosures Act

c. Dodd-Frank Wall Street | Reform and Consumer Act

Lenders must maintain an escrow account for higher-priced mortgages for a: a. 1 year b. 3 years c. 5 years d. No escrow account is required

c. 5 years

How much of a down payment does a borrower need if he doesn't want to pay PMI? a. 5% b. 10% c. 15% d. 20%

d. 20%

Borrowers with a high-cost loan can rescind the loan with how many business days? a. 3 b. 7 c. 15 d. There is no rescission period

a. 3

Acceptable income for loan qualification includes: a. 1 year of sales commissions b. Disability benefits with 2 years remaining c. 1 year of unemployment benefits d. 2 years of bonuses

d. 2 years of bonuses

Who determines the underwriting guidelines for conforming loans? ``` a. Federal Housing Finance Agency b. Federal Trade Commission c. U.S. Department of Housing and Urban Development d. Fannie Mae ```

d. Fannie Mae

Which appraisal method subtracts a value for depreciation? a. Sales Comparison b. Cost c. Income Capitalization d. Gross Income Multiplier

b. Cost

What is the Fannie Mae appraisal report form? a. USPAP b. HVCC c. USAPP d. URAR

d. URAR

What lien has the highest priority and is paid off first when a property is sold? a. Property tax b. Senior mortgage lien c. Mechanics lien d. Judgement lien

a. Property tax

What document is assigned along with mortgage a. Deed b. GFE/Loan Estimate c. HUD-1/Closing Disclosure d. Promissory note

d. Promissory note

When does the borrower pay the first year of hazard insurance premium? a. Each month for 12 months b. Before or at closing c. 6 months premium paid at closing; 6 month premium due 30 day after closing d. Every 2 months for a total of 6 payments during the first year after closing

b. Before or at closing

How many times may a loan originator receive credit for the same continuing education coarse? a. 1 b. 2 c. 3 d. No limit

a. 1

What type of valuation takes into account annual rent as well as other generated income? a. Sales comparison b. Cost c. GRM d. GIM

d. GIM

What term describes the process of a senior mortgage lien-holder voluntarily changing into a junior mortgage lien holder? a. Demotion b. Assignment c. Alienation d. Subordination

d. Subordination

Which of the following is an appropriate adjustment in a market data appraisal? ``` a. The comp has a two-car garage and the subject has a on-car garage. Subtract $5,000 from the comp's sale price b. The subject has a pool and the comp doesn't. Subtract $15,000 from the subjects's estimated value c. The comp has a fireplace and subject doesn't. Add $1,200 to the comp's sale price d. The subject has a dirty yard, and the comp is professionally landscaped. Add $8,000 to the subjects estimated value. ```

``` a. The comp has a two-car garage and the subject has a on-car garage. Subtract $5,000 from the comp's sale price ```

Which of the following is NOT a valid component of a contract a. Competent parties b. Mutual agreement c. Down payment d. Legal object

c. Down payment

Which of the following is NOT a valid requirement for a deed ``` a. Names of the seller and the buyer b. Must be signed in blue ink c. Legal description of the property d. Signed by grantor and two witnesses ```

b. Must be signed in blue ink

Which of the following is NOT required for self-employed qualification? a. 2 years business tax returns b. 60 day pay stub c. Company balance sheet d. Company profit and loss statement

b. 60 day pay stub

Ginnie Mae: a. Buys and sells loans b. Regulates loan originators c. Guarantees Ginnie-Mae Mortgage-backed securities d. Sets guidelines for government loans

c. Guarantees Ginnie-Mae | Mortgage-backed securities

Which law requires lenders to train employees to recognize the Red Flags of Identity. ``` a. Homeowner's Protection Act b. Fact Act c. Gramm-Leach-Bliley d. Dodd-Frank ```

b. Fact Act

A California residential loan originator referred a borrower to a Florida residential loan originator. The California loan originator can receive a referral fee. ``` a. Only if he is also licensed in Florida b. Only if the Florida loan originator is a licensed in California c. Only with written permission from the lender d. Never ```

d. Never

Which law requires loan originators to shred credit reports? ``` a. Homeowner's Protection Act b. Fact Act c. Gramm-Leach-Bliley d. No such law ```

d. No such law

Higher-priced loans for a flipped home require a second appraisal that is: ``` a. Performed by a different appraiser at no charge to the borrower b. Performed by a different appraiser and paid for by the borrower c. Performed by the same appraiser using different comparables at no charge to the borrower d. Performed by the same appraiser using different comparables and paid for by the borrower ```

a. Performed by a different appraiser at no charge to the borrower

If a consumer makes an inquiry to a company, the company can call for: a. 6 weeks b. 3 months c. 6 months d. 18 months

b. 3 months

Which of the following is NOT a loss mitigation option? a. Loan modification b. Refinance c. Deed-in-leu d. Foreclosure

d. Foreclosure

Which of the following is NOT part of the primary mortgage market? a. Commercial bank b. Seller financier c. Insurance company d. Credit union

c. Insurance company

Which is NOT a possible indication of a short sale fraud? ``` a. Buyer is a business partner of the seller b. Seller has a poor credit history c. Seller has an excellent credit history d. The property appraised significantly below neighboring properties ```

b. Seller has a poor credit | history

An individual with a good credit history who is paid to represent himself as a buyer is a : a. Straw buyer b. Particular buyer c. Promotion buyer d. Demotion buyer

a. Straw buyer

A deficiency judgement occurs when a: ``` a. Borrower needs additional down payment funds b. Seller wins a breach of contract lawsuit against the buyer c. Lender sues for borrower's personal assets to pay balance of the note d. Borrower needs additional private mortgage insurance ```

c. Lender sues for borrower's personal assets to pay balance of the note

What type of fraud occurs when a loan originator submits and closes on loan application with multiple lenders? a. Chunking b. Equity skimming c. Buy and bail d. Phantom sale

a. Chunking

What type of fraud occurs when a loan originator changes a borrower's birth date to make him appear older a. Reverse mortgage b. Equity skimming c. Buy and bail d. Phantom sale

a. Reverse mortgage

What type of of funding occurs when a lender borrows money from an investor and assigns the mortgage and note to the investor immediately after closing? a. Warehouse b. Table c. Direct investor d. Temporary

b. Table

What is the practice called when a real estate agent only shows Hispanic buyers properties in Hispanic neighborhoods? a. Redlining b. Steering c. Blockbusting d. Conversion

b. Steering

What is the practice called when a real estate agent spreads rumor that a specific ethnic group is planning to move into the neighborhood and advises residents to sell before property values drop? a. Redlining b. Steering c. Blockbusting d. Conversion

c. Blockbusting

What is the term used when a lender allows a tenant's improvements to be applied toward down payment funds when the tenant purchase the home? a. Home improvement funds b. Restoration funds c. Sweat equity d. Good faith money

c. Sweat equity

Anything that affects title to a property such as liens, easements or restrictions is a (an): a. Encumbrance b. Barrier c. Covenant d. Egress

a. encumbrance

What is the general term for the security pledged for the payment of a loan? a. Repository b. Collateral c. Transaction account d. Good faith

b. Collateral

Purchase issues that must be resolved before closing are called a. Dynamics b. Resolutions c. Contingencies d. Operations

c. Contingencies

Local laws that control the use of the land are called: a. Dynamics b. Resolutions c. Contingencies d. Zoning

d. Zoning

Which of the following is NOT characteristic of a warranty deed? ``` a. Guarantees the seller is true owner of the property b. Guarantees the seller has the legal right to sell c. Guarantees that there are no undisclosed lies on the property d. Guarantees that the sale price is fair and reasonable ```

d. Guarantees that the sale | price is fair and reasonable

Monthly income before taxes and other deductions is known as: a. Gross income b. Net income c. Assured income d. Household income

a. Gross income

What protects lenders against losses when a borrower defaults on a loan? a. Transactional account b. Mortgage insurance c. Deed restrictions d. Title insurance

b. Mortgage insurance

Which federal agency guarantees mortgage back securities that are based on FHA and VA loans? a. FHA b. VA c. Ginnie Mae d. Fannie Mae

c. Ginnie Mae

The lowest possible interest rate for an ARM loan is known as the: a. Floor b. Basin c. Basement d. Ground

a. Floor

An FHA reverse mortgage loan is a: a. FHARM b. HECM c. RMFHA d. UFFHA

b. HECM

What type of deed transfers ownership without making any guarantee of clear title? a. General warranty deed b. Special warranty deed c. Power of attorney deed d. Quitclaim deed

d. Quitclaim deed

What is the difference between the purchase price and the mortgage amount a. Good faith money b. Escrow c. Down payment d. Discount points

c. Down payment

What is a claim against a property for the payment of a debt? a. Lien b. Title c. Egress d. Arbitration

a. Lien

What is the interest rate commercial banks charge their most creditworthy customers? a. Partial rate b. Prime rate c. Premium rate d. Preferred rate

b. Prime rate

What is the current name for the Federal Home Loan Mortgage Corporation? a. Fannie Mae b. Freddie Mac c. FHA d. Fed

b. Freddie Mac

The most common mortgage that a private lender has is a conventional mortgage, but what exactly is this type of mortgage? A. An insured mortgage. B. A government-backed mortgage. C. A private lender mortgage. D. An endorsed FHA mortgage.

Correct answer: C C is correct because a conventional mortgage is the most popular private lender loan you can get for a home. Three factors best categorize a conventional mortgage: no government insurance, high-interest rates, and high credit rating requirements.

There are a host of reasons why a conventional mortgage is popular with clients, these reasons are seen plainly in the following benefits: A. The loan has no government insurance. B. The loan has high income and credit score constraints. C. Larger down payment requirements than a government loan with lower fees. D. A set interest rate that is often less than other loans. E. All the above.

Correct answer: E E is correct because a conventional mortgage has no government insurance allowing an applicant to save money on paying for insurance on top of other fees (if they pay 20% or more). It also comes with higher income and credit score requirements that leads to lower interest rates that are often set for a period. It is these benefits which make them perfect for the average person that wants to secure a home loan

Despite not being a selling point, does a conventional mortgage still offer insurance? A. Yes. B. No.

Correct answer: AA is correct because although most borrowers that secure a conventional mortgage have a high credit rating, lenders may want to have some insurance that the loan will be paid back, so they will include PMI in their mortgage fees. Known as PMI, this is insurance that will cover the lender if the mortgage goes unpaid. Those that pay less than 20% on a down payment will often need to pay PMI fees.

It has been stated numerous times that conventional mortgages are very popular, but why is this the case when it isn’t the cheapest or lowest interest rates? A. Most mortgage borrowers already have good credit scores, incomes, and sufficient funds. B. Conventional mortgages offer flexibility and various loan features. C. Conventional mortgages have no loan limits. D. They offer lower down payment rates than other mortgages on the market. E. A & B.

Correct answer: E E is correct because conventional mortgages offer a great range of benefits for the average mortgage. This includes the fact that most people who commit to a home loan have good credit scores, stable incomes, and sufficient funds, so they are the perfect candidates for this mortgage. They also offer flexibility and various loan features that other mortgages do not, such as having fewer restrictions than government-backed loans and fewer fees. C and D are incorrect, as conventional mortgages have loan limits and encourage higher down payments of 20% or more to save on money paying extra for house insurance.

Conventional mortgages are a great loan option for the average client that helps them save money. Of course, it isn’t just an option for those that have a 20% down payment ready to go, so what are the lowest down payment requirements for a conventional mortgage? A. There are no limits. B. 1% C. 3% D. Conventional loans are not very flexible, with a 20% limit.

Correct answer: C C is correct because the lowest down payment a lender will accept on a conventional mortgage is 3%. However, most choose 20% because larger down payments of 20% or above mean you do not need to get the PMI insurance set in place for the lender in case the borrower defaults on payments. A, B, and D are incorrect as conventional mortgages have a downpayment minimum of 3% or more, and it is a very flexible loan despite these restrictions.

A conventional mortgage gives borrowers the power to choose their down payment down to 3% of the total amount, but what is the requirement for paying 20% or less for a down payment? A. That a borrower takes out private mortgage insurance (PMI). B. That the borrower agrees to more significant repayments. C. A borrowers agrees to make another down payment at an agreed-upon date to make it 20%. D. Any of the above.

Correct answer: AA is correct because lenders must ensure they are covered if their applicant defaults on repayments. PMI is the private lender's version of government insurance, except if the applicant pays the 20% down payment, they do not need to opt into PMI if they desire. This is set to below 20% to encourage higher down payments to save both parties money in the long term. B through D are incorrect as a borrower cannot be forced to make more repayments or a second down payment to ensure a 20% down payment is achieved.

It can be confusing what the exact requirements for a conventional loan are exactly. So, what are the credit score requirements of conventional compared to government ones? A. A low credit score. B. A high credit score of 620 or above. C. No credit history. D. A & B

Correct answer: B B is correct because although there is no set amount, the higher the credit score (620), a borrower will get approved for a conventional mortgage. Having no credit history will make it challenging to secure a conventional mortgage loan.

Conventional loans offer many benefits to applicants who have great finances. Do conventional mortgages give borrowers high credit scores and low interest rates? A. Yes. B. No.

Correct answer: AA is correct because the higher the credit score, the borrower has access to better mortgage loans that have lower interest rates. However, the interest rates of conventional mortgages are higher than government-insured loans by a small margin, so they do not offer ‘the lowest.’ However, the upside is they don’t pay PMI if the downpayment is 20% or above.

The Real Estate Settlement Procedures Act (RESPA is implemented as: a. Regulation B b. Regulation X c. Regulation A d. Regulation Z

b. Regulation X

Which government agency enforces the RESPA regulations? a. CFPB b. FCC c. FHA d. FTC

a. CFPB; Consumer Financial Protection Bureau

RESPA is concerned with: a. Kickbacks b. Credit reports c. Triggering terms in ads d. U.S. security

a. Kickbacks

Good Faith Estimate/Loan Estimate must be sent to the borrower within how many business days of receiving a loan application? a. 1 b. 3 c. 5 d. 10

b. 3 days

The special Information Booklet must be sen to to the borrower within how many business days of receiving a loan application? a. 1 b. 3 c. 5 d. 10

b. 3 days

The mortgage Servicing Disclosure Statement must e sent to the borrower within how many business days of receiving a loan application? a. 1 b. 3 c. 5 d. 10

b. 3 days

How often must a summary of escrow activity statement be sent to a borrower? a. Once a month b. Once every 3 months c. Once every 6 months d. Once every year

Once every year

RESPA requires which of the following to be given to the borrower when the loan servicer changes? ``` a. Servicing Transfer Statement b. Good Faith Estimate c. Truth in Lending Disclosure d. Initial Escrow Statement ```

a. Servicing Transfer Statement

When must a referring party give the affiliated Business Arrangement Disclosure to the consumer? ``` a. Within 3 days of loan application b. Within 15 days of the loan application c. At or prior to the time of referral d. At closing ```

c. At or prior to the time of | referral

A borrower is entitled to request an obtain a copy of the HUD-1 Settlement Statement how many days before closing? a. 1 b. 3 c. 5 d. 7

a. 1 day

After an escrow account analysis, money must be refuded if the over-paid amout equals or exceeds: a. $50 b. $100 c. $250 d. $500

a. $50

The servicer has how many days to notify the borrower if the servicing rights have been sold and are being transferred to another company? a. 3 b. 5 c. 10 d. 15

d. 15 days

A borrower who makes a timely payment to the old servicer after a loan transfer, can be penalized after how many days if he still is not sending the payment to the correct servicer. a. 30 b. 60 c. 90 d. 120

b. 60 Days

What is the maximum criminal penalty for a kickback violation? ``` a. $500 and 6 months in prison b. $1000 and 6 months in prison c. $10,000 and a year in prison d. $25,000 and a year in prison ```

c. $10,000 and a year in prison

The HUD-1 Settlement Statement is required for what type of transaction? a. Cash purchase of a condo b. Financed purchase of a warehouse c. Reverse mortgage d. Cash purchase of a strip mall

c. Reverse Mortgage

``` The maximum escrow cushion that a lender can require is: a. 1/6 of total yearly disbursements b. 1/3 of total yearly disbursements c. 1/2 of total yearly disbursements d. 3/4 of total yearly disbursements ```

a. 1/6 of total yearly | disbursements

The lender has how many days after settlement to refund any portion of charges on the HUD-1 that exceeded the acceptable variance? a. 15 b. 30 c. 45 d. 60

b. 30 days

The Equal Credit Opportunity Act (ECOA) is implemented as: a. Regulation B b. Regulation X c. Regulation A d. Regulation Z

a. Regulation B

ECOA allows an applicant to have a copy of his: a. Credit score b. Credit report c. Property appraisal report d. Bank records

c. Property appraisal report

What government agency enforces ECOA? a. FCC b. HUD c. CFPB d. FHA

c. CFPB

A lender can discriminate base on: a. Age b. Sex c. Credit history d. Race

c. Credit history

How many days does a lender have after receipt of an application to notify the applicant of its action on the application? a. 10 b. 15 c. 30 d. 60

c. 30 days

How many days does an applicant have after receipt of an adverse notice to request a statement of reasons from the lender? a. 10 b. 15 c. 30 d. 60

d. 60 days

How many days does a lender have to send a statement of reasons for an adverse action after receiving a request from an applicant? a. 10 b. 15 c. 30 d. 60

c.30 days

The Truth-in-Lending Act (TILA ) is implemented as: a. Regulation B b. Regulation X c. Regulation D d. Regulation Z

d. Regulation Z

The Truth-in-Lending Act (TILA) was implemented by the: a. Federal Reserve Board b. Fannie Mae c. Federal Bureau of Investigation d. Federal Express

a. Federal Reserve Board

The Truth-in-Lending Act (TILA) is administered by: a. DVA b. FCC c. FHA d. CFPB

d. CFPB

The TILA disclosure must be given to the applicant within how many days after receiving the signed loan application for a reverse mortgaged? a. 3 business days b. 5 business days c. 7 business days d. 14 business days

a. 3 days

Which of the following is NOT a trigger term? a. 5% interest rate b. 200 monthly payment c. Lowest rates in town d. 48 easy payments

c. Lowest interest rates in town

The Right of Rescission does not apply to: a. Refinance loans b. Second Mortgage c. Home improvement d. First mortgage on a purchase

d. First mortgage on a | purchase

The TILA must be re-disclosed if the APR for a fixed-rate loan changes by more than: a. 1/8% b. 1/2% c. 3/4% d. 1%

a. 1/8%

HOEPA considers a loan to be high cost if the total charges to the borrower exceed what percent of the loan amount? a. 4% b. 5% c. 10% d. 12%

b. 5%

The Truth-in-Lending Disclosure must be delivered within how many business days prior to closing a reverse mortgage? a. 3 b. 7 c. 10 d. 15

b. 7 days

The APR must be finalized at least how many days before closing? a. 1 b. 3 c. 5 d. 7

b. 3 days

The Home Mortgage Disclosure Act (HMDA) was implemented by the: ``` a. Department of Housing and Urban Development b. Department of Veteran Affairs c. Federal Communication Commission d. Federal Reserve Board ```

d. Federal Reserve Board

HMDA is also known as: a. Regulation B b. Regulation C c. Regulation X d. Regulation Z

b. Regulation C

HMDA does NOT: ``` a. Send lending quotas for protected classes b. Require loan amounts to be reported c. Require the location of the property to be reported d. Require the race of the borrower to be reported ```

a. Set Lending Quotas for | protected classes

Which of the following is NOT required HMDA borrower information? a. Loan amount b. Gender c. Race d. Age

d. Age

The Fair Credit Reporting Act is enforced by a. HUD b. FCC c. FHA d. FTC

d. FTC Federal Trade | Commission

Bankruptcies can be kept in the credit report for: a. 2 years b. 5 years c. 7 years d. 10 years

d. 10 years

Tax liens can be kept in the credit report for: a. 2 years b. 5 years c. 7 years d. 10 years

c. 7 years

Which of the following is NOT a credit repository? a. FICO b. TransUnion c. Experian d. Equifax

FICO

Borrows are entitled to a free credit report if the lender takes adverse action against them and they ask for their report with how many days of receiving notice of the action? a. 30 b. 60 c. 90 d. 120

b. 60 days

Which Act includes provision to protect consumers personal financial information held by financial institutions? ``` a. Real Estate Settlement Procedures b. Fair and Accurate Credit Transaction c. Truth-in-Lending d. Gramm-Leach-Bliley ```

d. GLB, Gramm-Leach-Bililey

Which Act requires companies to give consumers privacy notices? ``` a. Real Estate Settlement Procedures b. Fair and Accurate Credit Transaction c. Truth-in-Lending d. Gramm-Leach-Bliley ```

d. GLB, Gramm-Leach-Bililey

What is the fine for Do Not Call violations? a. $3,000 b. $49,000 c. $42,530 c. $60,000

c. $42,530

A company with which a consumer has an established business relationship may call for how many months after the consumer's last purchase? a. 6 b. 13 c. 18 d. 24

c. 18 months

If a consumer makes an inquiry or submits an application to a company, the company can call for how many months? a. 3 b. 6 c. 9 d. 12

a. 3 months

What organization is allowed to call numbers on the Do Not Call List? a. Loan originators b. Charities c. Car dealerships d. Dry cleaners

b. Charities

The Fair Credit and Accurate Credit Transaction Act: ``` a. Prohibits kickbacks to title companies b. Provides that all information in a credit report is verified c. Allows consumers one free credit report per year from each repository d. Changes credit scoring to a 1-5 ranking system ```

c. Allows one free credit report per year from each repository.

Who does the consumer contact if he has questions about his credit score? a. Credit Reporting Agency b. Lender c. Title company d. Appraiser

a. Credit Reporting Agency (CRA)

The range of possible credit scores is: a. 200-900 b. 300-850 c. 400-700 d. 500-1000

b. 300-850

The Red Flag Rule is: a. Identity theft b. kickbacks c. Disclosure of the APR d. Regulation of interest rates

a. Identity theft

The Red Flag Rule is part of the: a. Truth-in-Lending Act b. Real estate Settlement Procedures Act c. SAFE Act d. Fair and Accurate Credit Transaction Act

``` d. Fair and Accurate Credit Transaction Act (FACTA) ```

Which of the following is a creditor as defined by the Red Flag Rule? a. Mortgage broker b. Beauty shop c. Grocery store d. Appraiser

a. Mortgage Broker

Which of the following is NOT a requirement for a company's Red Flags program? a. Be in writing b. Identify and detect warning signs of identity theft c. Detail appropriate responses to the warning signs d. Managed by the Human Resources department

d. Managed by the HR | department

If a loan estimate is mailed, it must be mailed how many days before loan consummation? a. 1 b. 3 c. 5 d. 7

d. 7 days

A lender has how many days to refund excessive variances on a Closing Disclosure? a. 10 b. 30 c. 60 d. 90

c. 60 days

A change to which of the following does NOT trigger a new 3 day waiting period? ``` a. Seller credits buyer money for landscaping b. APR c. Loan product d. Addition of a prepayment penalty ```

a. Seller credits buyer money | for landscaping

How many business days before loan consummation is a borrower entitled to see a revised Closing Disclosure that did not trigger an additional 3-day waiting period? a. 1 b. 2 c. 3 d. 4

a. 1 day

How many days before loan consummation is a seller entitled to see the Closing Disclosure? a. 0 (closing day) b. 1 c. 2 d. 3

a. 0 (Closing day)

When a consumer requests the cancellation of their escrow account, the lender has how many business days prior to closing the account to deliver an Escrow Closing Notice? a. 1 b. 3 c. 10 d. 30

b. 3 days

When a lender cancels an escrow account for a reason other than default or termination caused by refinancing, refinancing, repayment or rescission, they have how many business days prior to closing the account to deliver an Escrow Closing Notice? a. 1 b. 3 c. 10 d. 30

d. 30 days

For how many years must a lender retain the Loan Estimate? a. 2 b. 3 c. 4 d. 5

b. 3 years

For how many years must the lender retain the Closing Disclosure? a. 2 b. 3 c. 4 d. 5

d. 5 years

For how many years must the lender retain the Escrow Cancellation Notice? a. 2 years b. 3 years c. 4 years d. 5 years

a. 2 years

For how many years must a lender retain the Partial Payment Policy? a. 2 years b. 3 years c. 4 years d. 5 years

a. 2 years

The borrower must receive the Closing Disclosure how many business days before the consummation? a. 1 b. 2 c. 3 d. 4

c. 3 days

Which of the following is not delivered to a reverse mortgage applicant? a. TILA Disclosure b. Loan Estimate c. Good Faith Estimate d. HUD1

b. Loan Estimate

Which of the following is not protected from discrimination by the Fair Housing Act? a. HIV patients b. Elderly c. Pregnant women d. Mexicans

b. Elderly

ECOA requires that a loan application is retained for how long after a denial? a. 6 months b. 25 months c. 26 months d. 60 months

c. 25 months

What should a loan originator do if an applicant refuses to disclose their nationality? a. Leave it blank b. Refuse the application c. Select the box with their best guess d. Pester the applicant until they answer

c. Select the box with their best | guess

What should a loan originator do on a Loan Estimate address field when the borrower request a pre-approval? a. Leave it blank b. Enter one or more zip codes of likely locations c. enter the applicants personal address d. Deny the loan application

b. Enter one or more zip codes | of likely locations

How many housing counseling agencies must be listed on the Housing Counseling Disclosure? a. 1 b. 3 c. 5 d. 10

d. 10

What entity does HUD oversee? a. Department of Health b. Federal Housing Administration c. Department of Veterans Affairs d. Consumer Financial Protection Bureau

b. Federal Housing | Administration

What is the maximum term for A HOEPA balloon bridge loan? a. 12 months b. 24 months c. 36 months d. 60 months

a. 12 months

A borrower must indicate an Intent to proceed within how many business days after receiving the Loan Estimate? a. 3 b. 10 c. 15 d. 30

b. 10 days

Which law enacted mandatory cancellation of PMI under certain circumstances? a. Truth-in-Lending b. RESPA c. Homeowner Protection Act d. Equal Credit Opportunity Act

c. Home Owner Protection Act | (HPA)

What is the minimum number of hours for loan originator pre-licensing education? a. 10 b. 20 c. 30 d. 40

b. 20 hours

What is the minimum number of hours for annual loan originator continuing education? a. 2 b. 4 c. 8 d. 12

c. 8 hours

Which of the following do NOT need to be a licensed loan originator? ``` a. Independent contractors who are loan originators b. Independent contractors who are underwriters c. Independent contractors who are loan processors d. Federally chartered bank employees ```

d. Federally Chartered bank | employees

Which of the following does NOT have to be submitted by a loan originator applicant? a. Credit report authorization b. Criminal background check authorization c. References d. Finger prints

c. References

Mortgage loan originator licenses renew a. Every 6 months b. Every year c. Every 2 years d. Every 3 years

b. Every Year

The minimum passing score on the SAFE loan originator licensing exam is: a. 65% b. 75% c. 80% d. 90%

b. 75%

What is the maximum number of times the SAFE exam can be consecutively taken? a. 2 b. 3 c. 4 d. 5

b, 3 times

What is the minimum number of days a student must wait between his first two SAFE exam retakes? a. 10 b. 15 c. 30 d. 60

c. 30 days

After three consecutive attempts to pass the SAFE exam, what is the minimum amount of time a student must wait before trying again? a. 1 month b. 3 months c. 6 months d. 9 months

c. 6 months

Which of the following is NOT an immediate family member? a. Adopted brother b. Aunt c. Grandfather d. Stepmother

b. An Aunt

What may be true of registered loan originators? ``` a. They are independent contractors b. They must take the national loan originator exam c. They are bank employees d. They are licensed loan originators ```

c. They are bank employees

Which of the following must be a licensed loan originator? a. Commercial loan originator b. Independent contractor who is an underwriter c. Supervised loan processor employee d. An individual who negotiates the terms of his own mortgage loan

b. Independent contractor who | is an underwriter.

How often must a mortgage company submit a report on their financial condition? a. Monthly b. Quarterly c. Annually d. Every 2 years

c. Annually

What is the maximum fine for a SAFE Act violation? a. $1,000 b. $5,000 c. $15,000 d. $25,000

d. $25,000.00

Returning MLOs must retake the national exam after how many years of ? a. 1 b. 3 c. 5 d. 7

d. 5 years

The mortgagor is the: a. Lender b. Borrower c. Mortgage broker d. Real estate Agent

b. Borrower

The mortgagee is the: a. Lender b. Borrower c. Mortgage broker d. Real estate agent

a. Lender

Mortgages are a (n): a. Involuntary lien b. Voluntary lien c. Special Assessment d. Mechanics lien

b. Voluntary lien

What establishes the lien position a. Date and time of signing b. Date and time the loan was approved c. Date and time of recording d. Date and time of the title search

c. Date and time of recording

Junior mortgages are: a. Involuntary liens b. Limited to 30 year terms c. Limited to a total of 2 d. Voluntary liens

d. Voluntary lien

Which is NOT a promise by the mortgagor? ``` a. Keep the home in good repair b. Obey all state and county laws c. pay the hazard insurance d. pay the mortgage payment ```

b. Obey all state and county | laws

What is the enforcement of a lien? a. Arrest b. Bankruptcy c. Foreclosure d. Mediation

c. Foreclosure

A lender may choose NOT to take a Legal action upon default and this is known as: a. Forbearance b. Exculpation c. Fortitude d. Deficiency

a. Forbearance

Which clause allows the lender to increase the interest rate? a. Acceleration clause b. Escalation clause c. Deficiency judgement d. Exculpatory clause

b. Escalation

Which is NOT beneficial to a developer? a. Blanket mortgage b. Subordination clause c. Development clause d. Partial release clause

c, Development clause

Which is not essential for a valid contract a. $2,000 in reserves b. Competent parties c. Consideration d. Mutual agreement

a. $2,000 in reserve

Tenancy in Common does NOT have: ``` a. Equal or unequal ownership b. Buy at same or different times c. Multiple owners d. Right of survivorship ```

d. Right of survivorship

How many days after settlement does the lender have to send the Satisfaction of Mortgage letter? a. 10 days b. 15 days c. 30 days d. 60 days

d. 60 days

When there is no new note and the original buyer retains all the liability. this is known as transferring title by a. Creative financing b. Assumption c. Novation d. Subject to the mortgage

d. Subject to the mortgage

The assignor: a. Transfers contract rights b. receives contract rights c. Must be a United States citizen d. Must b an attorney

a. Transfers contract rights

Which of the following is not an involuntary lien? a. Judgement lien b. Mortgage lien c. Mechanics Lien d. IRS tax lien

b. Mortgage lien

The pledging of property as collateral for a loan: a. Defeasance b. Hypothecation c. Exculpation d. Intermediation

b. Hypothecation

The conveyor of the deed is the: a. Grantor b. Lender c. Grantee d. Mortgagor

a. Grantor

The receiver of the deed is the: a. Grantee b. Grantor c. Mortgagee d. Assignee

a. Grantee

Which document is not recorded? a. Note b. Satisfaction of Mortgage c. Mortgage d. Deed

a. The Note

The borrower's IOU is the: a. Mortgage b. Note c. Loan-to Value Ratio d. Equity

b. The Note

A clause in some mortgages which allows subsequent mortgages on the same property to have a higher claim than the current mortgage is a: a. Subordination clause b. Penalty clause c. Privilege clause d. Inferior clause

a. Subordination clause

Which of the following includes the Right of Survivorship? a. Good faith Estimate b. Tenants in Common c. Joint Tenancy d. Truth-in-Lending disclosure

c. Joint Tenancy

The document conveying title from one party to another and guaranteeing that the title is good is known as a: a. Good Faith b. Warranty Deed c. Usury limit d. Red Flags document

b. Warranty Deed

The mortgage lien on an entire tract of land is known as a: Buy-down mortgage b. Chattel mortgage c. Blanket mortgage d. Pillow mortgage

c. Blanket mortgage

Liens which are subsequent to the first recorded mortgage lien are known as: a. Junior liens b. Unavailable lien c. Estoppel liens d. Homestead liens

a. Junior liens

What percentage of of a FHA loan is insured? a. 100% b. Is partially guaranteed c. Has a 5% late fee d. Is not assumable

a. 100%

FHA maximum loan amounts: ``` a. Are set by the U.S. Department of State b. Do not include the Up Front Mortgage Insurance Premium c. Are set at $500,000 d. Are set at $1,000,000 ```

b. Do not include the Up Font Mortgage Insurance Premium. (UFMIP)

A VA mortgage does not include: a. It is partially guaranteed b. It has mortgage insurance premium c. It has a 4% late fee d. No required down payment

b. Mortgage insurance | premium

A VA appraisal is known as a: a. Qualified appraisal b. Certificate of reasonable value c. Certificate of market value d. VA designated market appraisal

b. Certificate of reasonable | value.

A USDA loan has: a. 100% financing b. No income limits c. A 5% late fee d. Has no geographical restrictions

100% financing

A conventional mortgage does NOT have a ``` a. 3% minimum down payment b. 5% late fee c. Due on sale clause d. Borrower income limit ```

d. Borrower income limit

Interest rates are set by: a. FHA b. Lenders c. VA d. Fannie Mae

b. Lenders

A reverse mortgage is an example of a. Positive amortization b. Negative amortization c. Lender error d. Bridge loan

b. Negative amortization

In an adjustable rate mortgage: ``` a. Index+Fulling indexed rate= margin b. Fully indexed rate+margin=index c. Index+margin= fully index rate d. Index-margin= fully indexed rate ```

c. Index + Margin = fully | indexed rate

Which of the following is expressed as basis points in an adjustable rate mortgage a. Index b. Margin c. Fully indexed rage d. Term

b. Margin

A 2/3/7 ARM ha a: a. Lifetime cap of 2% b. Lifetime cape of 3% c. Lifetime cap of 7% d. Lifetime cap of 10%

c. Lifetime cap of 7%

If a 15 year ARM has a starting interest rate of 5% and has an adjustment rate cap of 2% and a lifetime cap of 8%, what is the maximum interest rate that can be charged for the first adjustment period? a. 5 1/4% b. 5 1/2% c. 7% d. 13%

c. 7%

A term mortgage is NOT: a. Non-amortizing b. Interest only c. Satisfied by a final lump sum payment d. Fully amortized

d. Fully amortized

A graduated payment mortgage ``` a. Is for college graduates only b. Has payments that start low and increase over time c. Has payments that start high and decrease over time d. Is only for borrowers with a minimum age of 62 ```

b. Has payments that start low | and increase over time

Borrower's equity equals ``` a. Appraised value-loan balance b. Appraised value-down payment c. Loan balance+down payment d. Loan balance-down payment ```

a. Appraisal value - loan | balance

Escrow impounds are collect by the: a. Lender b. Attorney c. Police d. Seller

a. Lender

Private Mortgage Insurance (PMI) is required for: a. FHA loans b. VA loans c. Jumbo loans d. Conventional loans when there is less than a 20% down payment

d. Conventional loans when there is less than a 20% down payment

What type of mortgage has a fixed interest rate and increasing payments? a. Adjustable rate mortgage b. Package mortgage c. Growing equity mortgage d. Wraparound mortgage

c. Growing equity mortgage

The FHA is an agency with the: a. Department of the Veterans Affairs b. Department of HUD c. Department of Fannie Mae d. Private organization

b. HUD Department

PITI is the acronym for: ``` a. Property, insurance, taxes and interest b. Property, interest, taxes and insurance c. Principle, insurance taxes and interest d. Principle, interest, taxes, and insurance ```

d. Principle, interest, taxes, and | insurance

What are the indexes potentially used in an ARM? a. CD rate b. The London Inter-Bank Offered Rate c. The Chase Fluctuating Index d. The New York Times Index

b. London Inter-Bank Offered | Rate and the Treasury rate

A bi-weekly mortgage is: a. Is paid every 2 weeks b. Is paid ever 2 months c. Is not legal d. Has no mandatory payment schedule

a. Is paid every 2 weeks

Which has the superior lien position? a. Senior Mortgage b. Junior Mortgage c. Mortgages under $250,000 d. First signed mortgage

a. Senior Mortgage

80 basis points equals what percentage of the loan amount? a. .08% b. .8% c. 8% d. 80%

a. .8%

Which lien will most likely have the lowest lien position? a. Property tax b. Senior mortgage c. Junior mortgage d. IRS tax lien

d. IRS tax lien

A gift letter does NOT include? a. Donor,s name b. amount of the gift c. Terms of repayment d. Donor's address

c. Terms of repayment

A partially amortized loan which consists of a lump sum payoff at the end of the term is: a. Balloon mortgage b. Package mortgage c. Chattel mortgge d. Buy-down mortgage

a. Balloon mortgage

A mortgage with a payment due every 2 weeks is a a. Package mortgage b. Bridge loan c. Bi-weekly mortgage d. Blanket mortgage

a Bi-weekly mortgage

A VA appraisal is known as a: a. Certificate of Eligibility b. Certificate of Occupancy c. Certificate of Reasonable Value d. Certificate of Domicile

c. Certificate of Reasonable | Value

The fluctuating economic indicator used in an ARM is the: a. Index b. Margin c. Collateral d. Basis point

b. the Index

A loan in which interest is subsidized for a stated period of time is a: a. Buy-down mortgage b. Term mortgage c. Bridge loan d. Collateral loan

a. Buy-down mortgage

Who CANNOT contribute money towards the borrower's down payment? a. Employer b. Real estate agent c. Domestic partner d. Borrower's relative

b. Real estate agent

What is the maximum FHA seller concession? a. 3% b. 4% c. 6% d. 9%

c. 6%

What is the maximum VA seller concession? ``` a. 3% + standard closing costs b. 4% + standard closing costs c. 6% + standard closing costs d. 9% + standard closing costs ```

c. 6% + standard closing costs ( answer may be simply 4% for national exam)

What is the minimum down payment usually required for non-owner occupied rental property? a. 5% b. 10% c. 15% d. 20%

d. 20%

Borrowers must be notified of an ARM rate change how many months before the initial reset? a. 1 b. 3 c. 6 d. 9

6 months

What is the cost of 2 3/4 discount points on s 450,000 loan? a. $1,237.50 b. $3,375.00 c. $12,375.00 d. $13,750.00

c. $12,375.00 Discount points x loan amount

There are 10 days left in the month when the loan closes. The purchase price is $325,000. and the loan amount is $280,000. at 6.75% interest. How much interest does the borrower owe for the remainder of the month? a. $517.81 b. $601.03 c. $720.15 d. $813.22

a. $517.81 loan amount x | interest rate/365x10 =

The purchase price is $300,000; and the appraisal value is $290,000., and the LTV is 80%. What is the loan amount? a. $220,000 b. $232,000 c. $240,000 d. $248,000

b. $232,000. Loan amount or appraised value whichever is lower x the LTV

The monthly PITI is $1,000. and the gross monthly income is $5,000. According to standard Fannie Mae guidelines, what is the Housing Expense ratio? a. 5% b. 20% c. 36% d. 50%

b. 20%, PITI x monthly income =

An employee works 40 hours a week at 12.50 per hour. What is his gross monthly income? a. $ 2,000.00 b. $2,166.67 c. $2,245.78 d. $2,400.00

b. $2,166.67, Hourly rate x hours per week x 52 weeks in a year/12 months=

The borrowers October mortgage payment has not yet been received on October 17. He has a 175,000. VA loan; monthly P&I is $1,280.; Annual PMI is $1,800.; annual hazard insurance is 2,400., and annual property taxes are 3,350. What is the late charge? a. $42.20 b. $48.00 c. $51.20 d. $64.30

c. $51.20, P&I x VA allowable percentage rate 4% =

A property originally closed in November 2012. A refinance of that property is closing in March 2013. How many months of hazard insurance will be collected at closing? a. 3 b. 5 c. 6 d. 7

c. 6 Number of months current annual policy has been in effect = 2 months cushion=

How many years of home addresses are required on the typical loan application? a. 1 year b. 2 years c. 3 years d. 4 years

b. 2 years

How many years of employment history may be required on the loan application? a. 1 year b. 2 years c. 3 years d. 4 years

b. 2 years

What is usually NOT required by a loan applicant? a. Photo ID b. Personal references c. 2 months of bank or brokerage statements d. 30 days previous pay stub

b. Personnel references

Commission, bonus or dividend income is usually averaged over: a. 1 years b. 2 years c. 3 years d. 4 years

b. 2 years

In order to be counted as income, retirement income must continue for how long after the loan application is signed? a. 1 year b. 2 years c. 3 years d. 4 years

c. 3 years

In order to be counted as income, alimony must continue for how long after the loan application is signed? a. 1 year b. 2 years c. 3 years d. 4 years

c. 3 years

If there is no minimum monthly credit card payment what percent of the balance is used in the calculation of monthly debt? a. 1% b. 3% c. 5% d. 10%

c. 5%

How many months must be left on a car lease payment in order to be included as a debt? a. More than 1 month b. More than 5 month c. More than 10 month d. Automobile lease payments are always included

d. Automobile lease payments | are always included

How many months must be left on an installment charge in order to be included as a debt? a. More than 1 month b. More than 3 month c. More than 5 month d. More than 10 month

d. 10 months

Fannie Mae total Total Obligation Ratio is: a. 10% b. 26% c. 36% d. 46%

c. 36%

Payment for alimony must continue for how long after the application date in order to be included as a debt? a. 1 month b. 10 months c. 2 years d. 3 years

b. 10 months

A lock-in agreement does NOT include: a. Interest rate b. Expiration date c. Lock-in-fee d. APR

d. APR

Which IRS form does a lender use to verify a applicants income? a. 2071 b. 321-ml c. 911-r d. 4506-T

d. 4506-T

Fannie Mae requires how many years of credit and public records review? a. 1 year b. 3 years c. 5 years d. 7 years

d. 7 years

Bankruptcy can be kept on the credit report for a maximum of: a. 3 years b. 5 years c. 7 years d. 10 years

d. 10 years

Credit reports for new construction cannot be older than: a. 30 days b. 90 days c. 120 days d. 180 days

c. 120 days

FICO stands for: ``` a. Federal Interest Corporation b. Fair Isaac Corporation c. Freddie,insurance Company d. Fannie's International Credit organization ```

b. Fair Isaac Corporation

If two credit scores are obtained for a single borrower the representative score that is usually used is; a. The higher score b. The lower score c. It doesn't matter d. What is the policy of the Mortgage Broker business

b. The lower score

If three credit scores are obtained for a single borrower the representative score the is usually used is: a. The higher score b. The lower score c. The middle score d. What is the policy of the Mortgage Broker business

c. The middle score

The maximum age limit for a borrower is: a. 65 b. 75 c. 85 d. There is no maximum age limit

There is no maximum age limit

A guarantor or co-signer signs the: a. Mortgage b. Note c. Deed d. Mortgage and the note

b. Note

Which of the following is NOT a national credit repositories? a. Experian b. Fannie Mae c. TransUnion d. Equifax

b. Fannie Mae

What minimum percentage of ownership of a business is required for an individual to be considered self-employed? a. 10% b. 25% c. 50% d. 75%

b. 25%

Which of the following is NOT an escrow impound? a. Title insurance b. Property insurance c. Flood insurance d. Hazard insurance

a. Title insurance

Fannie Mae generally wants how many months of liquid financial reserves after closing? a. 1 month b. 2 months c. 3 months d. 4 months

b. 2 months

A co-borrower whose income is used to qualify must sign the: a. Mortgage b. Note c. Mortgage and the Note d. They are not required to sign anything

c. Mortgage and the Note

Fannie Mae requires a non-qualifying spouse whose income is not used in qualifying to sign the: a. Mortgage b. Note c. Mortgage and the Note d. They are not required to sign anything

a. Mortgage

If a mortgage is secured by the primary residence, Fannie Mae allows how many total properties to be financed? a. No limit b. 3 c. 5 d. 10

a. No limit

Which form is used to summarize the information in the loan package? ``` a. Fannie Mae 1006- Verification of Deposit b. Fannie Mae 1005 - Verification of Employment c. Fannie Mae 1008 - Transmittal Summary d. Fannie Mae 1003 - Loan Application ```

c. Fannie Mae 1008 - | Transmittal Summary

Which form is used to verify employment information? ``` a. Fannie Mae 1006- Verification of Deposit b. Fannie Mae 1005 - Verification of Employment c. Fannie Mae 1008 - Transmittal Summary d. Fannie Mae 1003 - Loan Application ```

b, Fannie Mae 1005 - | Verification of Employment

Which form is used to verify bank accounts? ``` a. Fannie Mae 1006- Verification of Deposit b. Fannie Mae 1005 - Verification of Employment c. Fannie Mae 1008 - Transmittal Summary d. Fannie Mae 1003 - Loan Application ```

a. Fannie Mae 1006 - | Verification of Deposit

What piece of information is not required in order to have a legal loan application? a. Consumer name b. Consumer monthly income c. Estimated property value d. Consumer signature

d. Consumer signature

Fannie Mae's automated underwriting system is known as: a. Loan Prospector (LP) b. Desktop Underwriter (DU) c. Daniels Underwriting System (DUS) d. Limited Portfolio (LP)

b. Desktop Underwriter (DU)

Freddie Mac's automated underwriting system is known as: a. Loan Prospector (LP) b. Desktop Underwriter (DU) c. Daniels Underwriting System (DUS) d. Limited Portfolio (LP)

a. Loan Prospector

Who makes the final decision as to whether a loan will be funded? ``` a. Automated underwriting system b. The lender c. The real estate agent d. The closing agent ```

b. The Lender

The automated underwriting system can NOT be used for what types of loans? a. FHA b. VA c. Conventional d. Jumbo

d. Jumbo loans

Who does Fannie Mae hold responsible for the quality of the appraisal? a. Appraiser b. Real estate agent c. Lender d. Title company

c. The lender

An appraisal must be re-certified if it is older than: a. 1 month b. 4 months c. 6 months d. 12 months

b. 4 months

The most probable price which a property should bring in an open market is: a. Median price b. Market value c. Going rate d. insurance value

b. Market value

The highest and best use of the property is not: a. Legally permissible b. Physically possible c. Financially feasible d. Based on possible future zoning changes

d. Based on possible future | zoning changes

The appraisal approach that best applies to residential property is: ``` a. Sales Comparison Approach b. Cost Approach c. Residential Approach d. Income Capitalization Approach ```

a. Sales Comparison Approach

The appraisal approach that best applies to vacant land? ``` a. Sales Comparison Approach b. Cost Approach c. Residential Approach d. Income Capitalization Approach ```

a. Sales Comparison Approach

The appraisal approach that best applies to a school? ``` a. Sales Comparison Approach b. Cost Approach c. Residential Approach d. Income Capitalization Approach ```

b. Cost Approach

What is the minimum number of closed sales comparable that can be used in the Sales Comparison Approach? a. 1 b. 3 c. 6 d. 8

b. 3

What is the most important type of comparable used in the Sales Comparison Approach? a. Active b. Pending c. Closed d. Expired

c. Closed

The method used to value income producing properties based on the rental incomes and sales prices of similar properties is call the: a. GRM b. BBQ c. CDR d. TRA

a. GRM

In a completion escrow account, what is the minimum estimated repair cost held in trust by the lender? a. 50% b. 90% c. 120% d. 200%

c. 120%

A legally binding letter from the lender to the mortgagor stating the terms of the loan is: a. A Commitment letter b. A Letter of intent c. A discover notice d. A conditional letter

a. A commitment letter

Who handles complaints regarding mortgage loan rejections? a. FCC b. FHA c. VA d. CFPB

d. CFPB

All of the following apply to a mortgagor's title insurance policy EXCEPT: ``` a. It is for the amount of the purchase price b. It is based on loan amount c. It is optional d. It is not transferable ```

b. It is based on loan amount

Surveys are NOT certified to: a. Lenders b. Title insurers c. Buyers d. Real estate broker

d. Real Estate Broker

What gives someone other than the owner the right to be on the property for a specific purpose? a. Mechanics liens b. Easement c. Encumbrance d. Declaration of intention

b. Easement

What is a clause in the deed that limits the future use of a property? a. Deed restriction b. Encumbrance c. Title lien d. Owner's privilege

a. Deed restriction

The most common type of legal description for residential subdivision is: a. Monument method b. Lot and Block c. Metes and bounds d. Government land survey method

b. Lot and Block

A fee charged to the borrower for determining whether or not a property was in a flood zone is a: a. Mapper fee b. Flood certification fee c. FEMA fee d. Reviewer fee

b. Flood certification fee

Which form is used as the standard settlement form? a. HUD/1 Closing disclosure b. FHA Closing Statement c. U.S.A. Settlement Statement d. National Closing Statement

a. HUD-1/Closing Disclosure

The day of closing is May 15. When is the first loan payment due? a. June 1 b. July 1 c. August 1 d. June 16

b. July 01

The most accurate type of legal description for residential subdivision is: a. Monument method b. Lot and Block c. Metes and bounds d. Government land survey method

c. Metes and bounds

Which of the following is an acceptable source of funds at closing? a. Sweat equity b. Cash on hand c. Personal check d. Wire transfer

d. Wire transfer

What type of funding occurs when a lender obtains funds from a line of credit at a commercial bank? a. Credit lending b. Table funding c. Warehouse funding d. Temporary funding

c. Warehouse funding

The late fee for FHA and VA loans is: a. 3% of principle and interest b. 4% of principle and interest c. 5% of principle and interest d. 10% of principle and interest

b. 4%

When a lender sells a mortgage loan to another lender this is called? a. Assignment of mortgage b. Note transfer c. Vendor selling d. Linking a mortgage

a. Assignment of mortgage

When a assignor keeps the servicing rights this is known as: ``` a. Selling a loan with escrow impounds b. Selling a loan with servicing released c. Selling a loan with servicing retained d. Selling a loan pro norma ```

c. Selling a loan with servicing | retained

Ginnie Mae does: a. Buy loans b. Sell loans c. Fund loans d. Guarantee loans

d. Guarantee loans

Fannie Mae was established in: a. 1914 b. 1938 c. 1962 d. 1980

b. 1938

Fannie Mae will not purchase a mortgage secured by a : ``` a. Urban area residential property b. Orchard c. Rural area residential property d. Suburban area residential property ```

b. Orchard

Which title insurance policy is transferable? a. Mortgagor b. Mortgagee c. Restricted use d. Conforming

b. Mortgagee

The title company considers unpaid property taxes to be an: a. Encroachment b. Encumbrance c. Easement d. Engress

b. Encumbrance

The principal of value that focuses on the most profitable, legal use to which a property can be put is: a. Principle of Satisfaction b. Principle of Substitution c. Principle of Highest and Best Use d. Principle of Conformity

c. Principle of Highest and Best Use

A Point of Beginning is used in what type of survey? a. government land survey b. Plat map c. Metes and Bounds d. Circle and Grid

c. Metes and Bounds

A neighbors fence that crosses over on to another property is an example of an: a. Encroachment b. Encumbrance c. Exculpation d. Egress

a. Encroachment

An outstanding claim on a property that limits the ability to sell the property is a: a. Title defect b. Subordination c. Penalty d. Fault fee

a. Title defect

The national trade association and voice of the abstract and title insurance industry is: a. TICOA b. ATC c. ALTA d. TITLE NOW

c. ALTA

Under the federal fair housing law, the seven protected classes include: ``` a. Race, color source of income, handicap, national origin, marital status, religion b. Race, color religion, sex, handicap, familial status, national origin c. Race , sexual orientation, sex, familial status, handicap, age, national origin d. Race, color, age, religion, sex, handicap, familial status ```

b. Race, color, religion, sex, handicap, familial status, national origin

Under RESPA , a real estate professional may give in return for the referral of real estate settlement service business a: a. Caribbean cruise b. $50 c. Thank you d. Kickback

c. Thank you

A real estate broker may pay a referral fee to: a. A closing agent b. A past customer c. A mortgage broker d. Another real estate brokerage firm

d. Another real estate | brokerage firm

Who can provide closed sales comparables to an appraiser? a. Real estate agent b. Underwriter c. Mortgage broker d. Lender

a. Real estate agent

Which of the following is NOT a common type of mortgage fraud? a. Rehabilitation b. Equity skimming c. Inflated appraisal s d. Property flipping

a. Rehabilitation

What is the mortgage fraud scam called when a broker invents borrowers properties? a. Equity skimming b. Air loan c. Silent second d. Property flipping

b. Air loan

What are the 2 types of mortgage fraud the FBI investigates? ``` a. Fraud for profit and fraud for housing b. East coast and west coast c. Domestic and international d. Appraisers and mortgage brokers ```

a. Fraud for profit and fraud for | housing

A lender's refusal to lend in a particular neighborhood is known as: a. Referential lending b. Redemption c. Railroading d. Redlining

d. Redlining

A fee charged for the use of money is: a. Interest b. Usury c. Rent d. Lease

a. Interest

A mortgage on personal property is a(an); a. Chattel mortgage b. Reverse mortgage c. Ad valorem mortgage d. Participation mortgage

a. Chattel mortgage

One discount point equals 1% of the: a. Purchase price b. Annual percentage rate c. Loan amount d. Appraisal value

c. Loan amount

Net worth is defined as: a. Cash plus real property b. Cash plus stocks and bonds c. Assets minus liabilities d. Liquid assets plus real property

c. Assets minus liabilities

The liquidation of a debt by regular, usually monthly installments of principal and interest is: a. Amortization b. Hypothecation c. Assignment d. Novation

a. Amortization

The withdrawal of funds out of savings accounts and into stocks and bonds is known as: a. Intermediation b. Disintermediation c. Acceleration d. Exculpation

b. Disintermediation

The condemnation of private property for public good is: a. Eminent Domain b. Escheat c. Disintermediation d. Interstate

a. Eminent Domain

Notice which is not recorded is known as: a. Construction notice b. Actual notice c. Selective notice d. Lis pendens notice

b. Actual notice

Notice which is recorded is known as: a. Constructive notice b. Actual notice c. Selective notice d. Lis pendens notice

a. Constructive notice

The use of borrowed funds to increase yield is: a. Leverage b. Acceleration c. Defeasance d. forbearance

a. Leverage

A mortgage note that does NOT limit recovery solely from the property is call a: ``` a. Note endorsed with recourse b. Hybrid loan c. Multi-level Loan d. Non-recourse Note ```

a. Note endorsed with recourse

APOR stands for: a. Average Price of Ratios b. Annual Percentage of Refinancing c. Average Prime Offer Rate d. Annual Percentage Reimbursement

c. Average Prime Offer Rate

A discount point costs? a. $100 b. $1,000 c. 1 percent of loan amount d. 10 percent of loan amount

1% of loan amount

ECOA defines elderly as: a. 55 years old b. 62 years old c. 65 years old d. 70 years old

b. 62 years old

The right to use land owned by another is an: a. Easement b. Acquisition c. Exposition d. Alienation

a. Easement

The act of lowering the priority of a mortgage lien is: a. Reduction b. Subordination c. Degradation d. Subtraction

b. Subordination

A loan offered to a consumer with poor credit is know as: a. Subjugation b. Alternative c. Preliminary d. Subprime

a. Subprime

The Real Estate Settlement Procedures Act (RESPA is implemented as: a. Regulation B b. Regulation X c. Regulation A d. Regulation Z

b. Regulation X

Which government agency enforces the RESPA regulations? a. CFPB b. FCC c. FHA d. FTC

a. CFPB; Consumer Financial Protection Bureau

RESPA is concerned with: a. Kickbacks b. Credit reports c. Triggering terms in ads d. U.S. security

a. Kickbacks

Good Faith Estimate/Loan Estimate must be sent to the borrower within how many business days of receiving a loan application? a. 1 b. 3 c. 5 d. 10

b. 3 days

The special Information Booklet must be sen to to the borrower within how many business days of receiving a loan application? a. 1 b. 3 c. 5 d. 10

b. 3 days

The mortgage Servicing Disclosure Statement must e sent to the borrower within how many business days of receiving a loan application? a. 1 b. 3 c. 5 d. 10

b. 3 days

How often must a summary of escrow activity statement be sent to a borrower? a. Once a month b. Once every 3 months c. Once every 6 months d. Once every year

Once every year

a. Servicing Transfer Statement

c. At or prior to the time of | referral

A borrower is entitled to request an obtain a copy of the HUD-1 Settlement Statement how many days before closing? a. 1 b. 3 c. 5 d. 7

a. 1 day

After an escrow account analysis, money must be refuded if the over-paid amout equals or exceeds: a. $50 b. $100 c. $250 d. $500

a. $50

The servicer has how many days to notify the borrower if the servicing rights have been sold and are being transferred to another company? a. 3 b. 5 c. 10 d. 15

d. 15 days

b. 60 Days

What is the maximum criminal penalty for a kickback violation? ``` a. $500 and 6 months in prison b. $1000 and 6 months in prison c. $10,000 and a year in prison d. $25,000 and a year in prison ```

c. $10,000 and a year in prison

The HUD-1 Settlement Statement is required for what type of transaction? a. Cash purchase of a condo b. Financed purchase of a warehouse c. Reverse mortgage d. Cash purchase of a strip mall

c. Reverse Mortgage

a. 1/6 of total yearly | disbursements

The lender has how many days after settlement to refund any portion of charges on the HUD-1 that exceeded the acceptable variance? a. 15 b. 30 c. 45 d. 60

b. 30 days

The Equal Credit Opportunity Act (ECOA) is implemented as: a. Regulation B b. Regulation X c. Regulation A d. Regulation Z

a. Regulation B

ECOA allows an applicant to have a copy of his: a. Credit score b. Credit report c. Property appraisal report d. Bank records

c. Property appraisal report

What government agency enforces ECOA? a. FCC b. HUD c. CFPB d. FHA

c. CFPB

A lender can discriminate base on: a. Age b. Sex c. Credit history d. Race

c. Credit history

How many days does a lender have after receipt of an application to notify the applicant of its action on the application? a. 10 b. 15 c. 30 d. 60

c. 30 days

How many days does an applicant have after receipt of an adverse notice to request a statement of reasons from the lender? a. 10 b. 15 c. 30 d. 60

d. 60 days

How many days does a lender have to send a statement of reasons for an adverse action after receiving a request from an applicant? a. 10 b. 15 c. 30 d. 60

c.30 days

The Truth-in-Lending Act (TILA ) is implemented as: a. Regulation B b. Regulation X c. Regulation D d. Regulation Z

d. Regulation Z

The Truth-in-Lending Act (TILA) was implemented by the: a. Federal Reserve Board b. Fannie Mae c. Federal Bureau of Investigation d. Federal Express

a. Federal Reserve Board

The Truth-in-Lending Act (TILA) is administered by: a. DVA b. FCC c. FHA d. CFPB

d. CFPB

a. 3 days

Which of the following is NOT a trigger term? a. 5% interest rate b. 200 monthly payment c. Lowest rates in town d. 48 easy payments

c. Lowest interest rates in town

The Right of Rescission does not apply to: a. Refinance loans b. Second Mortgage c. Home improvement d. First mortgage on a purchase

d. First mortgage on a | purchase

The TILA must be re-disclosed if the APR for a fixed-rate loan changes by more than: a. 1/8% b. 1/2% c. 3/4% d. 1%

a. 1/8%

HOEPA considers a loan to be high cost if the total charges to the borrower exceed what percent of the loan amount? a. 4% b. 5% c. 10% d. 12%

b. 5%

The Truth-in-Lending Disclosure must be delivered within how many business days prior to closing a reverse mortgage? a. 3 b. 7 c. 10 d. 15

b. 7 days

Which of the following does not include the Right of Survivorship? a. Good faith Estimate b. Tenants in Common c. Joint Tenancy d. Truth-in-Lending disclosure

B. Tenants in Common

MCQs 1of4 Flashcards

(501 cards)