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MLO EXAM > PRACTICE EXAM 2 > Flashcards

PRACTICE EXAM 2 Flashcards

1
Q

what is NOT a loan origination activity?

A

assisting in loan modification

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2
Q

A unilateral contract is binding on

A

one party

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3
Q

loan originator organizations must keep compensation records for

A

3 years

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4
Q

mortgage companies must submit a residential loan origination activity report to the NMLSR every

A

3 months

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5
Q

who chooses force-placed hazard insurance companies ?

A

lender

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6
Q

what is required for an FHA streamline refinance loan ?

A

current on mortgage payments for the last 3 months

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7
Q

what law addresses loan originators compensation issues?

A

loan origination rule

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8
Q

commercial telemarketers must search the do not call registry every

A

31 days

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9
Q

in order to send a fax, advertisers must

A

have an established business relationship with recipient

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10
Q

the first page of an advertisers max must include

A

Opt out instructions

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11
Q

what real estate co-ownership is for married couples ?

A

tenancy by the entirety

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12
Q

increasing neighborhood crime exemplifies what type of depreciation?

A

economic obsolescence

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13
Q

what law protects homeowners from foreclosure-prevention scams

A

MARS rule

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14
Q

what federal report is filled when detecting suspicious activity ?

A

suspicious activity report

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15
Q

what agency becomes the receiver for some failing financial institutions ?

A

federal deposit insurance company

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16
Q

the ability to repay regulation applies to

A

investment home purchases

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17
Q

what is the max debt to income ratio of a qualified mortgage?

A

maximum debt to income ratio of 43%

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18
Q

individuals submit annual report of foreign bank and financial accounts to the

A

IRS

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19
Q

what is part of the MARS rule?

A

negotiators can’t interfere with communications between borrowers and lenders

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20
Q

loan originators aren’t allowed to recover compensation:

A

based on loan terms

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20
Q

high-cost loans require the borrower to receive

A

homeownership counseling

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21
Q

the truth in lending disclosure does NOT include

A

borrowers credit score

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22
Q

what is the minimum credit score for high-cost home loans?

A

minimum credit score of 680

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23
Q

what does NOT have zero variance between GFE and HUD 1

A

title insurance

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24
Q

what can have unlimited variance between GFE and HUD 1?

A

hazard insurance

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25
Q

what happens if acceptable variance between GFE and HUD-1 is exceeded?

A

excess is refunded within 30 days

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26
Q

what law requires only printing the last 5 numbers on credit card receipt

A

FACT act

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27
Q

what happens if acceptable variance between closing disclosure and loan estimate is exceeded ?

A

excess is refunded within 60 days

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28
Q

a higher priced home loan is one that

A

APR exceeds average prime rate by at least 1.5% for first lien loans

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29
Q

what is the shortest time a mortgage purchase loan can close?

A

7 business days

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30
Q

what type of loan gives borrower money each month?

A

reverse mortgage

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31
Q

what type of mortgage is a non-recourse loan?

A

reverse mortgage

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32
Q

a lender won’t lose money funding what loan?

A

FHA loan

33
Q

a lender that offers mortgage loans directly to the public is a

A

retail lender

34
Q

what disclosure can be initially sent to the borrower within 45 days after closing?

A

initial escrow statement

34
Q

what type of loan is short term with money advanced in stages

A

a construction loan

35
Q

a loan originator who accepts upfront fee for negotiating a loan modification is violating what rule?

A

MARS rule

36
Q

a lender that works with a licensed loan originator is a

A

wholesale lender

37
Q

what type of mortgage is not guaranteed or insured by the government ?

A

conventional

38
Q

what agency became the conservator of Fannie Mae and Freddie Mac ?

A

federal housing finance agency

39
Q

HMDA requires lenders to submit their loan applications to the

A

federal financial institutions examination counsel

40
Q

MIP and UFMIP is associated with what type of loan

A

FHA

41
Q

what law requires ARM borrowers to receive the CHARM

A

TILA

42
Q

what law allowed the government to assume control over Fannie and Freddie

A

HERA

43
Q

this law was passed in 2010 in response to the financial meltdown and recession

A

Dodd frank Wall Street

44
Q

lenders must retain an escrow account for higher-priced mortgages for a minimum

A

5 years

45
Q

borrowers with a high-cost loan can rescind the loan within

A

3 business days

46
Q

acceptable income for loan qualifications includes

A

2 years of bonuses

47
Q

who determines the underwriting qualifications for conforming loans ?

A

Fannie Mae

48
Q

which appraisal method subtracts a value for depreciation ?

A

cost

49
Q

what is the Fannie Mae appraisal report form ?

A

URAR

50
Q

what lien has the highest priority and is paid off first when a property is sold?

A

property tax

51
Q

what document is signed along with the mortgage

A

promissory note

52
Q

how many times can a loan originator receive credit for the same continuing education course

A

1 time

52
Q

when does the borrower pay the first year of the hazard insurance premium ?

A

before or at closing

53
Q

what type of valuation takes into account annual rent as well as other generated income ?

A

GIM

54
Q

what is NOT a valid component of a contract?

A

down payment

55
Q

what is NOT required for self-employed qualification ?

A

60-day paystubs

56
Q

can an MLO get referral fees?

A

No

57
Q

what law says to shred credit reports?

A

No law

58
Q

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

59
Q

what is NOT a loss mitigation option ?

A

foreclosure

60
Q

If a consumer makes an enquiry to a company, they can call for

A

3 months

61
Q

what is NOT part of the primary mortgage market?

A

insurance company

62
Q

a deficiency judgement is when

A

lender takes from borrower because they can’t make up the missed payments

62
Q

chunking fraud is

A

closing a loan application with multiple lenders

63
Q

changing borrowers birthdate to make him appear older is which fraud

A

reverse mortgage

64
Q

what type of funding is a lender borrowing money from an investor and assigning the mortgage and the note to the investor immediately after closing

A

table funding

65
Q

what is it called when a lender allows a tenants improvements to be applied toward down payment funds when the tenant purchases the home

A

sweat equity

65
Q

anything that affects title to a property such a liens, easements or restrictions is an

A

encumbrance

66
Q

what is the term for the security pledged for the payment of a loan

A

collateral

67
Q

purchases issues that must be solved before closing are

A

contingencies

67
Q

local laws that control the use of land are

A

zoning

68
Q

what is NOT a characteristic of a warranty deed

A

guaranteeing the sale price is fair and reasonable

69
Q

monthly income before taxes and other deductions is

A

gross income

70
Q

the lowest possible interest rate for an ARM loan is known as the

A

floor

71
Q

what protects lenders against losses when a borrower defaults on a loan

A

mortgage insurance

72
Q

an FHA reverse mortgage loan is a

A

HECM

73
Q

What deed transfers ownership without making any guarantee of clear title

A

quitclaim deed

74
Q

what is the difference between the purchase price and the mortgage amount

A

down payment

75
Q

what is the interest rate commercial banks charge their most creditworthy customers

A

Prime rate

76
Q

what is the current name for the federal home loan mortgage corporation

A

Freddie Mac

MLO EXAM (13 decks)

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