Mortgage Test Flashcards
(172 cards)
1
Q
A borrower has a right to ask for a copy of the appraisal under ECOA after denial:
a. within 60 days
b. within 90 days
c. within 120 days
d. within 30 days
A
a. within 60 days
2
Q
A borrower must receive the disclosure to the right to receive a copy of the appraisal required by ECOA:
a. anytime during the application process
b. within 7 days of the application
c. within 7 days of closing
d. at app or within 3 days thereof
A
a. anytime during the application process
3
Q
A creditor may ask about an applicant’s marital status.
a. true, as long as the information is used to determine whether credit is extended
b. false, asking such a questions is considered discrimination
c. true, as long as the info is not used to determine whether credit will be extended
d. false, the info does not matter & creditors should not ask
A
c. true, as long as the info is not used to determine whether credit will be extended
4
Q
A creditor must notify an applicant of it’s intended action on an app within ___ days after app is received
a. 60
b. 120
c. 90
d. 30
A
d. 30
5
Q
A mortgage broker may inform an applicant that fed law requires the broker to ask about race, sex, martial status & age by putting the info on a web site.
a. false, this info must begiven to the applicant in person
b. true, as long as the applicant consents and can access the information
c. false, the info must be communicated directly through e-mail
d. true, as long as the info remains available for 30 days
A
b. true, as long as the applicant consents and can access the information
6
Q
According to ECOA, how quickly after a credit decision must the borrower request a free copy of their appraisal report?
a. 3 days
b. 30 days
c. 60 days
d. 90 days
A
d. 90 days
7
Q
Accord to ECOA, how quickly must the appraisal be delivered to the borrower when they have requested said report within 90 days of a credit decision?
a. 3 days
b. 10 days
c. 30 days
d. 60 days
A
c. 30 days
8
Q
Accord to ECOA, one must retain proof of compliance for how long?
a. 0 months for business & 25 months for residential
b. 12 months for business & 24 months for residential
c. 12 months for business & 25 months for residential
d. no separate document retention times
A
c. 12 months for business & 25 months for residential
9
Q
According to ECOA, the appraisal disclosure generally must be delivered to the borrower when?
a. within 3 days of app
b. within 30 days of app
c. prior to closing
d. within 90 days of closing
A
a. within 3 days of app
10
Q
Any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit is a:
a. buyer
b. creditor
c. lender
d adjunct
A
b. creditor
11
Q
ECOA protects borrowers based on:
a. credit score
b. geographic area
c. physical characteristics
d. disability
A
c. physical characteristics
12
Q
Entities making business or commercial loans must maintain records or other data relating to those loans for a period of no less that ___ year(s), in order to
a. 3, keep statistics on the ethnic makeup of their client roster
b. 1, prove compliance with FCRA & TIL
c. 1, prove compliance with the ECOA
d. 3, show evidence of yearly volume
A
c. 1, prove compliance with the ECOA
13
Q
Entities making residential mortgage loans must maintain records or other data relating to those loans for a period of no less than ___, in order to ____.
a. 2 years, keep statistics on the ethnic makeup of their client roster
b. 25 months, prove compliance with the ECOA
c. 1 year, prove compliance with FCRA & TIL
d. 5 years, show evidence of average yearly volume
A
b. 25 months, prove compliance with the ECOA
14
Q
How many years does a consumer have to take civil action against a creditor suspected of violating the ECOA?
a. 5
b. 3
c. 2
d. 1
A
c. 2
15
Q
If a borrower is denied a loan request due to the credit score not meeting lender’s guidelines, what must be done next?
a. the borrower must be verbally informed
b. mail a copy of credit with instructions to dispute scoring
c. initiate an adverse action notice
d. make a counter offer of loan terms
A
c. initiate an adverse action notice
16
Q
Once a loan app is complete accord to ECOA, a credit decision must be made within:
a. 30 days
b. 60 days
c. 90 days
d. not defined
A
a. 30 days
17
Q
The term ______ does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is either delinquent or in default or where additional credit would exceed a previously established credit limit.
a. reverse action
b. adverse action
c. delinquency
d. redlining
A
b. adverse action
18
Q
Under ECOA, how long must one keep mortgage records?
a. 12 months
b. 25 months
c. 36 months
d. 2 years
A
b. 25 months
19
Q
Under ECOA, what information must be sent to a borrower, in writing, who has been denied?
a. name of CRA & issue with appraisal
b. name & address of lender & federal agencies who ensure compliance
c. name & address of applicant & credit scores
d. name, address or originator, & unique identifier
A
b. name & address of lender & federal agencies who ensure compliance
20
Q
What agency governs ECOA?
a. federal reserve board of governors
b. HUD
c. FDIC
d. federal housing agnecy
A
a. federal reserve board of governors
21
Q
What entity provides guidelines & rules for ECOA?
a. HUD
b. federal reserve board
c. federal bank & loan board
d. fannie mae
A
b. federal reserve board
22
Q
What is permissible to ask about for ECOA?
a. the acct on the credit report for which another person is liable
b. the applicant’s child bearing intents
c. marital status
d. religion
A
c. marital status
23
Q
What is the primary purpose of ECOA?
a. to ensure applicants have equal access to credit
b. to ensure credit information is reported equally
c. to require disclosure of closing costs
d. to require clear disclosure of credit terms
A
a. to ensure applicants have equal access to credit
24
Q
When can you ask about religion under ECOA?
a. it is required for HMDA date reporting
b. when the borrower notes that he does not wish to furnish a 1003
c. when there is a business purpose to ask
d. never, under no circumstance
A
d. never, under no circumstance
25
When can you discriminate against age?
a. when the person is collecting social security
b. when the person is 82 years old & is requesting a 30 year mortgage
c. when the person is too young to sign contracts
d. no age disclination ever
c. when the person is too young to sign contracts
26
What is the average origination fee at the time of a transaction?
a. 1
b. 2
c. 3
d. 4
a. 1
27
A loan officer normally makes between $2,000-$5,000 per deal. He does a loan for his cousin & charges a $500 fee, plus receives .50% in YSP for a $500k loan.
a. the loan officer has acted legally & ethically & shown no preferential treatment
b. the loan officer has acted illegally & ethically & shown no preferential treatment
c. the loan officer has acted legally & unethically & shown no preferential treatment
d. the loan officer has acted illegally & unethically & shown preferential treatment
a. the loan officer has acted legally & ethically & shown no preferential treatment
28
A loan originator is doing the loan for a family member, and his company requires he makes $5,000 on every loan. he charges $5,000 on the front end and earns 1$ YSP ($3,000). What the loan originator is doing for his family is:
a. legal/ethical
b. illegal/unethical
c. illegal/unethical
d. legal/unethical
d. legal/unethical
29
A responsible broker _____ arranges co-singed mortgages.
a. always
b. never
c. sometimes
d. who knows
c. sometimes
30
A self employed borrower says most of his money is ran through his business & asks, "How much money do I need to qualify" what is the best response?
a. can your accountant prepare a YTD P&L?
b. what is the greatest amount ever earned?
c. let's take a look at your taxes & bank stmts to determine your income
d. what is the lowest amount of income reported in the last 3 years
c. let's take a look at your taxes & bank stmts to determine your income
31
A self-employed borrower is applying for a mortgage loan. During the loan application he asks, "how much income do i need to show in order to qualify for this loan?" what is the most ethical response?
a. as must as possible. what do you claim on tax return?
b. you shouldn't show less that $5,300 per month.
c. let me ask the underwriter for a minimum amount
d. lets review your tax returns & bank stmts to determine your income
d. lets review your tax returns & bank stmts to determine your income
32
A vendor taking advantage of the consumer by charging unjustly high prices through fraud or loack of alternatives is called:
a. unbundling
b. price gouging
c. padding recording fees
d. balloon payment
b. price gouging
33
Balloon payment laons are ______ predatory loans.
a. always
b. not always
c. never
d. idk
b. not always
34
Charging borrowers above the legally set rate for this step in the loan process is:
a. price gouging
b. inflated appraisal costs
c. unbundling
d. padding fees
d. padding fees
35
Duplicating costs that should be included under other charges is ____.
a. unbundling
b. price gouging
c. padding recording fees
d. inflated appraisal costs
a. unbundling
36
If a child misses payments on a loan co-signed by her parents, whose credit will be affected?
a. only the child
b. the parents only
c. both
d. no ones
c. both
37
Predatory lending increased greatly in the ___.
a. 60s
b. 70s
c. 80s
d. 90s
d. 90s
38
Pushing subprime products upon vulnerable or underserved groups for reasons other than credit quality is ____.
a. steering
b. subprime lending
c. reverse redlining
d. contract knavery
a. steering
39
What is meant by the term "ethics"?
a. an overall system of beliefs or values which help us decide right & wrong, good & bad
b. specific rules that tell us how to behave morally
c. the goal of good behavior
d. the actions we take & the decisions we make that reflect a system of beliefs
d. the actions we take & the decisions we make that reflect a system of beliefs
40
When is it acceptable to forge a borrower's signature on loan docs?
a. when it is in the best interest of time & ease for the borrower
b. never
c. when the borrower says it's okay
d. when it is office policy
b. never
41
Which of the following is NOT a sign of predatory lending?
a. full disclosure of the loan terms
b. credit insurance is tacked on w/o explanation
c. equity will be lost in the home
d. the consumer is encouraged to sign over the deed to his house
a. full disclosure of the loan terms
42
Who reaps the benefits of ethical behavior in mortgage transaction?
a. the borrower & the broker
b. the mortgage industry
c. just the borrower
d. everyone
d. everyone
43
Affiliates wishing to use consumer information for meeting purposes may do so if they either inform the consumer of the marketing or the consumer was given a chance to:
a. receive a discount
b. opt out
c. close their loan
d. rescind
b. opt out
44
FACTA amends the:
a. patriot act
b. fair credit report act
c. bill of rights
d. truth in lending act
b. fair credit report act
45
FACTA was an update & amendment to which of the following?
a. real estate settlement procedures act
b. fair credit reporting act
c. home ownership affordability & stability program
d. USA patriot act
b. fair credit reporting act
46
Which of the following need NOT be included on the credit score disclosure?
a. alternative consumer reporting agencies that may be used
b. the range of possible credit scores under the model used
c. the date the credit score was created
d. the consumer's current credit score
a. alternative consumer reporting agencies that may be used
47
Which of the following was NOT covered in FACTA?
a. risk-based pricing notices
b. disclosure of credit scores
c. customer dispute resolution
d. telemarketing/do not call
d. telemarketing/do not call
48
An adverse action would contain all of the following except:
a. credit reporting agencies
b. credit scores
c. reason for denial
d. loan request information
b. credit scores
49
How many days does a lender have to disclose the reason for denial if requested by the borrower?
a. 30
b. 60
c. 90
d. 120
a. 30
50
If a wholesale lender has denied your client & a notice of adverse action letter has been faxed to the broker; what is the broker's responsibility?
a. forward it to the borrower immediately
b. shred it to protect the client's confidentiality
c. place it in the client's file
d. idk
a. forward it to the borrower immediately
51
What does FCRA stand for?
a. fair credit regulation admin
b. the republican party
c. it is a credit score abbreviation
d. fair credit reporting act
d. fair credit reporting act
52
What is the primary purpose of FCRA?
a. to require credit reporting agencies to purge old data
b. to ensure equal access to credit
c. to ensure accuracy & fairness of credit reporting
d. to require clear disclosure of credit terms
c. to ensure accuracy & fairness of credit reporting
53
Who oversees credit card issuers?
a. FHA
b. FRB
c. HUD
d. FCCTC
b. FRB
54
A condition that would make fraud more likely to occur in a mortgage company includes:
a. weak oversight from management
b. a thriving market
c. strong auditing
d. trustworthy colleagues
a. weak oversight from management
55
If an unethical broker has a borrower sign a blank loan app, he is possibly trying to pull what scams?
a. steering
b. reverse redlining
c. falsified loan app, unverified income
d. incapacitated borrower scheme
c. falsified loan app, unverified income
56
A copy of the HUD-1 settlement statement can be used to verify the net proceeds from the sale of real estate. Which of the following could be a warning sign of a potential problem?
a. a reference is made to secondary financing
b. there is cash given to the borrower in the amt of $300 or less
c. the date of settlement is delayed
d. the sales price differs from the sales contract
d. the sales price differs from the sales contract
57
If a mortgage originator assist a borrower or an appraiser in fraudulent activity, that originator:
a. could be indicted as a conspirator
b. would be viewed as a victim would be in NO trouble as it is
c. appraiser that is bound to behave ethically
d. idk
a. could be indicted as a conspirator
58
If the sn on the credit report is invalid or differs from the loan app, the borrower may be ____.
a. an illegal alien
b. deceased
c. using a false identity
d. an undercover police officer
c. using a false identity
59
The practice of sneaking a burdensome provision into the loan contract without the borrower's knowledge is known as what?
a. equity stripping
b. steering
c. contract knavery
d. price gouging
c. contract knavery
60
What is a "straw buyer"?
a. a buyer who is a victim of identity theft
b. a buyer who intends to purchase property but does not intend to occupy it
c. a buyer who accepts a fee for the use of his / her ssn & other personal info on a mortgage app
d. a buyer that travels extraordinary distances on foot in search of a brain
c. a buyer who accepts a fee for the use of his / her ssn & other personal info on a mortgage app
61
What won't happen if fraud is found in a loan?
a. the interest rate will increase on the loan
b. the loan will be forgiven
c. the note is called due
the originator's company will have to repurchase the loan
b. the loan will be forgiven
62
When you are working a deal with a real estate agent, you inquire about a carry back. The real estate agent tells you to just call the title company & have them draw up something that looks good. What should the next step of the originator be?
a. notify the authorities
b. create the terms you think the parties would accept & inform title company
c. tell the real estate agent to draft the second mortgage
d. double your fee
a. notify the authorities
63
Which of the following could be a red flag for a borrower that is using a property as an investment instead of their primary residence?
a. live in a different state
b. live in the same neighborhood
c. new residence is significantly smaller than previous residence
d. new residence is significantly larger
b. live in the same neighborhood
64
Which of the following is NOT an example of fraud?
a. shotgunning
b. use of a straw buyer
c. stated income loans
d. silent seconds
c. stated income loans
65
If a mortgage originator assists a borrower or an appraiser in fraudulent activity, that originator:
a. could be indicted as a conspirator
b. would be viewed as a victim
c. would be in no trouble as it is the appraiser that is bound to behave ethically
d. idk
a. could be indicted as a conspirator
66
$125K sales price, $80K 1st mortgage, $24,500 2nd morggage, & $137K appraised value. What is the LTV & CLTV?
a. 64/84
b. 58/79
c. 58/84
d. 64/79
a. 64/84
67
$237K sales pirce, $10,000 deposit, & 20% down payment. How much more does the borrower need to bring to closing for the down payment in addition to the deposit?
a. $47,400
b. $37,400
c. $57,400
d. $13,700
b. $37,400
68
30/15 and 180/360 represent what type of loan?
a. balloon mortgage; 30 year amortization with 15 year balloon
b. balloon mortgage; 15 year amortization with 30 year balloon
c. FHA loan
d. Conventional loan
a. balloon mortgage; 30 year amortization with 15 year balloon
69
A 3/1 is a(n):
a. traditional mortgage product
b. ARM
c. pay option arm
d. fixed rate after 3 year buy-down period
b. ARM
70
A borrower elects to have a 2/1 buydown on an FHA loan at 6.5% fixed interest rate. The loan will have an interest rate that is permanent at?
a. 4.5%
b. 5.5%
c. 6.5%
d 8.5%
c. 6.5%
71
A borrower has 40% DTI ration, $500 in monthly debts, & $5k in monthly income. What is the highest PITI the borrower can qualify for?
a. $1,000
b. $1,500
c. $2,000
d. idk
b. $1,500
72
For a vet who qualifies for a VA loan, the amt the VA will guarantee is called:
a. entitlement
b. sponsorship
c. dd214
d. certificate of reasonable value
a. entitlement
73
For which fo the following reasons would it be permissible to refuse to take an app from a potential borrower?
a. you don't click with the applicant & would rather not do business with him/her
b. the lender doesn't accept apps from the area where the borrower lives
c. the borrower has alluded to the fact that he/she is submitted false docs in order to qualify for a larger loan
d. the applicant has poor credit & you dnt feel there is any way he/she swill meet the lender guidelines
c. the borrower has alluded to the fact that he/she is submitted false docs in order to qualify for a larger loan
74
How many days does a seller have to wait to sell a home for profit if the new homebuyer is using a FNMA loan product?
a. 1 day
b. 3 days
c. 10 days
d. 0 days
d. 0 days
75
How many days do you have to send out the appraisal disclosure notice?
a. 7 days
b. 10 days
c. 30 days
d. by time of closing
c. 30 days
76
How much can the APR change on a loan prior to closing without having to redisclose the APR?
a. .05%
b. .125%
c. .25%
d. APR does not need to be redisclosed until closing
b. .125%
77
How much is 7 months of interest for a $200k loan at 5% interest?
a. $5,833
b. $11,666
c. $2,917
d. $583
a. $5,833
78
How often must a lender update his Do Not Call Registry database?
a. every 30 days
b. every 60 days
c. every 31 days
d. every 90 days
c. every 31 days
79
How soon must a borrower occupy the home on a primary residence?
a. 30 days
b. at time of closing
c. 60 days
d. 90 days
c. 60 days
80
If a borrower is purchasing a home with a FHA loan & the home requires Flood Insurance, how long is teh rescission period after closing?
a. 3 days
b. 5 days
c. 0 days
d. 10 days
c. 0 days
81
If a borrower received $1,200 in rent each month on a duplex that is being purchase as an investment property, what percentage is the vacancy factor?
a. 75%
b. 25%
c. 10%
d. known as occupancy factor
b. 25%
82
If a borrower takes a 2/1 buy down with a start rate of 4.5, what is his note rate?
a. 3.5%
b. 4.5%
c. 6.5%
d. 5.5%
c. 6.5%
83
If a borrower takes a 2/1 buy down with a start rate of 4.5, what is his rate during the 2nd year?
a. 3.5%
b. 4.0%
c. 5.0%
d. 5.5%
d. 5.5%
84
If a lender agrees to subordinate a loan, what has occurred?
a. the borrower has obtained a second mortgage/lien
b. the borrower has a late payment reflected on his credit report
c. a loan has been paid in full
d. a loan has been approved
a. the borrower has obtained a second mortgage/lien
85
If a mortgage is placed on a property that already has a first lien, that second mortgage is considered to be which of the following?
a. junior
b. senior
c. unsecured
d. unencumbered
a. junior
86
If a servicer receives a "qualified written request" from a borrower for info about an account, the services must research the borrower's inquiry & come to a decision as to whether there is indeed an error within how may business days after receiving the request?
a. 20 business days
b. 30 business days
c. 60 business days
d. 90 business days
c. 60 business days
87
If the borrower has less than a __ down payment, MI is required. Usually the lenders will submit the loan package to a Mortgage guaranty insurer t the same time the lender is underwriting the loan.
a. 10%
b. 15%
c. 20%
d. 25%
c. 20%
88
In a bi-weekly mortgage payment plan, how may extra mortgage payments are made every year?
a. 1
b. 2
c. 1.5
d. 3
a. 1
89
In order for a mortgage to be valid & enforceable, it...
a. is signed by both the mortgagee & mortgagor
b. gives the borrower rights to occupy the property
c. gives the creditor property use rights
d. describes the borrowers loan terms
a. is signed by both the mortgagee & mortgagor
90
Instead of mortgage insurance, every VA loan includes what type of fee?
a. funding fee
b consulting fee
c. app fee
a. funding fee
91
Mortgage backed securities are a product of which of the following?
a. secondary market
b. primary market
c. jumbo market
d. stock market
a. secondary market
92
On the 1003, what info is asked for government monitoring purposes?
a. race & sex
b. marriage, age & DOB
c. country of origin
d. if there have been any federal judgments
a. race & sex
93
Once a loan is closed, the borrower must occupy within:
a. 15 days
b. 30 days
c. 45 days
d. 60 days
d. 60 days
94
Out of the loans below, which has mandatory MIP?
a. all loans with less than 20% down payment
b. FHA loans
c. HELOC
d. VA
b. FHA loans
95
Sales price is $292k, buyer is putting down 20% and seller is paying 4% for the buyer's closing costs. How much is the seller paying for the buyer's costs?
a. $4,667
b. $9,344
c. $11,680
d. $58,400
c. $11,680
96
SRP is:
a. paid to a broker for originating a loan at above par interest rate
b. paid to a lender & represents the value of the servicing
c. illegal, unless disclosed on the GFE
d. standard retail pricing
b. paid to a lender & represents the value of the servicing
97
the 4 Cs: character, Capacity, Credit & Collateral. What is capacity?
a. the probability of future repayment based on past history
b. the value of the real property pledged as security
c. the ability to make the payment (income & assets)
d. the general values of the applicant demonstrated by payment history
c. the ability to make the payment (income & assets)
98
The acronym PFC stands for:
a. paid from closing
b. prepayment penalty
c. prequalification of credit
d. prepaid finance charge
d. prepaid finance charge
99
The below loan has an assumable clause:
a. jumbo loans
b. conforming loans
c. FHA loans for low income families
d. VA loans
d. VA loans
100
The Cost of Funds Index is traditionally used to determine interest rates on waht type of loans?
a. 360 month mortgage-Fixed rates
b. rate adjustments on adjustable rate programs
c. reverse mortgage
d. HELOC
b. rate adjustments on adjustable rate programs
101
The definition of a conventional mortgage is:
a. a loan that is not an FHA, VA or RHS mortgage
b. a loan that is an FHA, VA, or RHS mortgage
c. the loan meets Fannie or Feddie guidelines
d. the loan fails to meet FNMA guidelines
a. a loan that is not an FHA, VA or RHS mortgage
102
The term "30 basis points" expressed as percentatge is?
a. .03%
b. .30%
c. 3.00%
d. 30.00%
b. .30%
103
There are 3 usual approaches to determining the fair market value of a property: Which one does not belong?
a. income
b. market
c. cost
d. sales
b. market
104
This loan product is typically for borrowers over 62 years old who have built substantial equity or have paid their home in full & wish to cash out the equity in their home.
a. graduated payment mortgage
b. reverse annuity mortgage
c. home equity line of credit
d. new construction loan
b. reverse annuity mortgage
105
USDA loans are primarily for properties located in:
a. urban areas
b. metro areas
c. suburban areas
d. rural areas
d. rural areas
106
USDA, FHA & VA are all purchased by which of the following?
a. freddie mac
b. ginnie mae
c. FTC
d. federal reserve
b. ginnie mae
107
VA loans require which of the following?
a. VA value cert
b. flood insurance
c. pest inspection
d. VA funding fee
d. VA funding fee
108
Waht are teh differences between freddie, fannie & GNMA?
a. Freddie & Fannie are FSEs & GNMA is not
b. Fannie is GSE, while freddie & GNMA are not
c. Freddie is GSE, while Fannie & GNMA are not
d. What the heck is GSE?
a. Freddie & Fannie are FSEs & GNMA is not
109
What are the words behind the acronym APR?
a. average Perion's rate
b. another person's rate
c. annual percentage rate
d. annual precipitation rate
c. annual percentage rate
110
What best describes discount points paid on a mortgage loan?
a. fee pad by borrower for broker to place loan
b. permanently buys down rate
c. temporary rate buy down (typically 2 years)
d. points paid by seller to buy down rate
b. permanently buys down rate
111
What best describes the COFI index?
a. cost of funds index
b. interbank offered rate
c. most common HELOC index
d. combined with COFI margin forms GNMA fully indexed rate
a. cost of funds index
112
What does POC mean?
a. previously occupied condominium
b. paid outside of closing
c. paid off creditor
d. previously offered credit
b. paid outside of closing
113
What does the acronym USDA represent?
a. unite state dept of architecture
b. united state dept of america
c. united state dept of agriculture
d. unite state dept of archeolgy
c. united state dept of agriculture
114
What does the FHA do?
a. guarantee mortgages
b. insures mortgages
c. underwrites
d. fund
b. insures mortgages
115
What does the VA do for a loan?
a. insure
b. guarantee
c. fund
d. approve
b. guarantee
116
What does title insurance cover or protect against?
a. any unpaid liens prior to the borrower purchasing the property
b. any unpaid liens on the new owner
c. any unpaid taxes on title
d. covers the cost of improvements
a. any unpaid liens prior to the borrower purchasing the property
117
What entity insures FHA loans?
a. fair housing authority
b. federal housing admin
c. first-time homeowner's act
d. none of the above
b. federal housing admin
118
What factor do lenders analyze in order to determine if a borrower will be financially able to meet the demands of a loan repayment?
a. amount of the loan request
b. existing debt
c. LTV
d. length of loan terms
b. existing debt
119
What is a conventional loan?
a. FHA
b. any loan not insured by the government
c. VA
d. USDA
b. any loan not insured by the government
120
What is a JUMBO loan?
a. a loan that exceeds the max loan limits backed by FNMA & FHLMC (loans in excess of $417,000)
b. a loan that exceeds the max loan limits backed by FNMA & FHLMC (loans in excess of $317,000)
c. a loan that exceeds the minimum loan limits backed by FNMA & FHLMC (Loans in excess of $317,000)
d. a loan that exceeds the minimum loan limits backed by FNMA & FHLMC (loans in excess of $417,000)
a. a loan that exceeds the max loan limits backed by FNMA & FHLMC (loans in excess of $417,000)
121
What is a short sale?
a. when the lender agrees to an increase payoff of a loan when the subject property is sold
b. when the lender agrees to a reduced payoff on a loan when the subject property is sold
c. the borrower agrees to a reduced payoff on a loan when the subject property is sold
b. when the lender agrees to a reduced payoff on a loan when the subject property is sold
122
What is FNMA's primary purpose in the secondary market?
a. fund loans once they are processed & closed
b. underwrite a loan
c. originate loans
d. provide a source of funds for lenders
d. provide a source of funds for lenders
123
What is one of the many roles of the Federal Housing Admin?
a. approves loans
b. guarantees loans
c. insures loans
d. services loans
c. insures loans
124
what is required for a FNMA 4-Plex investment property?
a. 5% down payment
b. rents need to be equal or greater than the payment
c. 6 months reserves
d. 33% MI coverage
c. 6 months reserves
125
What is the 2009 conforming loan limit for a one-family property?
a. $317,000 (this goes up to $625,500 for high cost areas)
b. $417,000 (this goes up to $625,500 for high cost areas)
c. $417,000 (this goes up to $525,500 for high cost areas)
d. $517,000 (this goes up to $625,500 for high cost areas)
b. $417,000 (this goes up to $625,500 for high cost areas)
126
What is the definition of a "business day"?
a. all days that substantially creditor's functions are open for business
b. all days that substantially creditor's function are open for business, excluding federal holidays
c. Monday through Saturday, excluding federal holidays
d. when most creditor's functions are open for RESPA, & Monday - Saturday, excluding federal holidays under TILA
d. when most creditor's functions are open for RESPA, & Monday - Saturday, excluding federal holidays under TILA
127
What is the funding fee on a USDA loan?
a. 2%
b. 1.5%
c. 3%
d. 1%
a. 2%
128
What is the maximum entitlement amount for a veteran?
a. $34,500
b. 33,000
c. $42,000
d. $36,000
d. $36,000
129
What is the max gross adjustment on the appraisal?
a. 10% for lot value
b. 10% for each line
c. 15%
d. 25%
d. 25%
130
What is the max LTV for FHA loans?
a. 97%
b. 90%
c. 90%
d. 96.5%
d. 96.5%
131
What is the only term for a USDA loan?
a. 30
b. 27
c. 20
d. 15
a. 30
132
What is the primary purpose of Fannie Mae?
a. manage interest rates for the Federal Reserve board
b. manage interest rates for treasury
c. provide mortgage market liquidity
d. deliver FHA loans in MBSs
c. provide mortgage market liquidity
133
What is the term for when a title changes owners?
a. foreclosure
b. forbearance
c. conveyance
d. reconveyance
c. conveyance
134
What is used to determine the interest rate change on an ARM?
a. index only
b. YSP
c. SRP
d. index & margin
d. index & margin`
135
What is used to determine the value of a home when doing a VA loan?
a. AVM
b. certificate of reasonable value
c. certificate of market value
d. drive-by appraisal
b. certificate of reasonable value
136
What score do you need to pass the SAFE test?
a. 85%
b. 75%
c. 80%
d. 70%
b. 75%
137
What 3 items best describes what a lender/underwriter should consider when making a credit decision?
a. credit, income, & age
b. income, credit & term
c. credit, capacity, & collateral
d. debt, dependents, & income
c. credit, capacity, & collateral
138
What transfers or changes ownership interest in real property from one person to another person?
a. reconveyance
b. convey
c. transmittal
d. HUD-1
b. convey
139
What type of loan would not have to be repurchased?
a. non-recourse loan
b. no bid loan
c. recourse loan
d. commercial loan
b. no bid loan
140
When a borrower reaches 62 yo & he has significant equity in his home, which of the following mortgage programs would best assist that person if he is in need of additional living expenses, access to funds for home repair or other needs?
a. HELOC
b. HECM
c. swing-loan
d. ARM
b. HECM
141
When a loan app is denied how many days does a borrower have to request a copy of the appraisal report?
a. 7
b. 30
c. 60
d. 90
d. 90
142
Where would the reset period for an ARM be shown?
a. note, TIL & DOT
b. mortgage only
c. HUD-1 & GFE only
d. HUD-1 & ARM rider
a. note, TIL & DOT
143
Which appraisal approach is most commonly used for an owner occupied property?
a. sales comparison approach
b. cost approach
c. income approach
d. inflated value approach
a. sales comparison approach
144
Which best describes an FHA loan?
a. a loan that is funded by the FHA
b. a loan that is made on an investment property
c. a loan that is backed by the federal government
d. a loan that requires no down payment
c. a loan that is backed by the federal government
145
Which FNMA for number is known as the transmittal summary?
a. 1003
b. 506t
c. 1099
d. 1008
d. 1008
146
Which form number represents the Request for a Copy of Tax Transcripts?
a. 4605T
b. 4065T
c. 4506T
d. 4650T
c. 4506T
147
Which loan is assumable?
a. conventional ARM
b. FHA loan
c. VA loan
d. both b & c
d. both b & c
148
Which of hte following best defines a loan that doesn't meet the loan limits of FNMA & FHLMC?
a. non conforming
b. conventional loans
c. subprime loans
d. FHA & VA
a. non conforming
149
Which of the following fees affect the APR?
a. discount point paid by the seller
b. appraisal fee
c. processing fee
d. credit report fee
c. processing fee
150
Which of the following is another term for jr lien?
a. first mortgage
b. subordinate lien
c. HELOC
d. reverse mortgage
b. subordinate lien
151
Which of the following is defined as the cost of credit expressed as $ amount?
a. APR
b. finance charge
c. DTI
d. escrow impounds
b. finance charge
152
Which of the following is not considered a draw back in a bi-weekly payment mortgage?
a. greater risk of late payments
b. each payment has an administrative service fee
c. bi-weekly programs offer lesser interest rates
d. borrower makes an extra payment each year
d. borrower makes an extra payment each year
153
Which of the following loan programs does not require credit or income documentation and doesn't require repayment?
a. reverse mortgage
b. stated income mortgage
c. HELOC mortgage
d. ARM mortgage
a. reverse mortgage
154
Which of the following loan types is best described as a loan with a payment schedule made up of a series of small periodic payments & a larger lump sum due upon maturity?
a. balloon mortgage
b. reverse mortgage
c. ARM
d. due-on-sale clause
a. balloon mortgage
155
Which of the following loans does not require annual or monthly mortgage insurance?
a. 15 year conforming loan at 90% LTV
b. 30 year FHA loan at 75% LTV
c. 15 year FHA loan at 85% LTV
d. 30 year conforming loan at 100% LTV
c. 15 year FHA loan at 85% LTV
156
Which of the following loans might be used to finance a loan amount that is in excess of GSE's loan limits?
a. subprime loans
b. jumbo loans
c. balloon loans
d. reverse mortgages
b. jumbo loans
157
Which of the following real estate appraisal approaches considers the replacement value of the property?
a. sales approach
b. inflated value approach
c. cost approach
d. income approach
b. inflated value approach
158
Which of the following terms defines the method in which a lien is removed from property when payment is made in full?
a. cure of default
b. acceleration
c. reconveyance
d. transmittal
c. reconveyance
159
Which of the following terms specifically refers to a loan that is not obtained through a program of the federal government?
a. USDA loans
b. conforming loans
c. GNMA loans
d. VA & FHA loans
b. conforming loans
160
Which of the following would address the principal & interest payments due on a loan?
a. margin
b. index
c. amortization schedule
d. life of the loan caps
c. amortization schedule
161
Which of the following would best help an appraiser determine a home value?
a. pulling active listings within 3 miles of the subject
b. reviewing tax assessor records
c. closed sales similar to, and in close proximity to, the subject
d. finding out how much the subject sold for previously
c. closed sales similar to, and in close proximity to, the subject
162
Which of the following would not be found on a credit report?
a. information available in public records
b. derogatory credit information
c. payments made to creditors who do not send data to a repository
d. credit balances relative to available credit
c. payments made to creditors who do not send data to a repository
163
Which type of disclosure must have a statement that payment or loan terms can change?
a. good faith estimate
b. hud-1
c. adjustable rate mortgage disclosure
d. loan servicing disclosure
c. adjustable rate mortgage disclosure
164
Which would be associated with an impound/escrow account?
a. reserves
b. mortgage insurance
c. escrow waiver fee
d. HD-1 statement
b. mortgage insurance
165
Who gets a right to rescind notice when 2 borrowers are on the loan and both will owner-occupy the property?
a. all previous spouses or complete affidavit of divorce
b. both borrowers: each get 2 copies of the right to rescind & 1 disclosure
c. only one borrower gets the right to rescind but all borrowers get the disclosure
d. one notice & disclosure per borrower
b. both borrowers: each get 2 copies of the right to rescind & 1 disclosure
166
Why are FHA loans beneficial to lenders?
a. they are insured by the federal government
b. no escrow is required
c. FHA loans are for low income families
d. they finance 100% of the sales price
a. they are insured by the federal government
167
____ are mortgages that do not fully amortize due to the repayment terms of the loan.
a. reverse annuity mortgages
b. balloon mortgages
c. graduated payment mortgages
d. home equity line of credit
b. balloon mortgages
168
Any non-public, personal information a customer offers to a financial institution (paper, electronic, or otherwise) that the institution or its affiliates handles or maintains is considered to be:
a. confidential information
b. safeguarded information
c. GLB information
d. customer information
d. customer information
169
Under GLB, mortgage lenders & brokers, check cashers, pay day lenders & credit counselors are all examples of what?
a. depository institutions
b. financial institutions
c. regulatory agencies
d. banks
b. financial institutions
170
Under GLB, mortgage lenders and brokers, check cashers, pay day lenders & credit counselors are all examples of:
a. depository institutions
b. financial institutions
c. regulatory agencies
d. banks
b. financial institutions
171
After reviewing the trade off table, the borrower decides to accept the loan with the lower rate & higher settlement costs. What is the next step for this loan?
a. borrower must circle and initial the loan program in the tradeoff table.
b. the good faith estimate must be officially "withdrawn"
c. a new good faith estimate must be provided
d. all of the above
c. a new good faith estimate must be provided
172
HUD estimates that the new disclosures will reduce settlement costs by ___ per transaction.
a. $250
b. $500
c. $700
d. $1,000
c. $700
