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Flashcards in Practice Questions Deck (50):
1

The practice of getting people to sell their homes at bargain prices by suggesting that certain
ethnic groups are going to move into the area is nicknamed:

4.Blockbusting

2

You and the borrower believe an Adjustable Rate Mortgage would be best for the borrower. What
is the name of the booklet you are required to give?

1.CHARM Booklet

3

How many days in advance of transferring a loan to another lender must the current mortgage
servicer inform that customer of the transfer to another lender who will subsequently be
servicing the loan?

15

4

After meeting with the borrowers to complete a loan application, you return to your office and
order a Tri-Merged credit report. Now that you have a credit report, what Loan Disclosure must
you now prepare and mail (or give) to them?

1.Notice to Home Loan Applicant

5

.In a face-to-face application, what do you do if the borrower refuses to fill out the race, ethnicity
and gender section on Section X of the 1003?

3.Use your best guess and complete the information in Section X of the 1003.

6

6.Which is not part of the original loan application?
1.Borrower's marital status
2.ECOA disclosure
3.Borrower provided ethnicity
4.Borrower provided birth date

2

7

Which is not an application disclosure?
1.Servicing disclosure
2.Environmental hazard disclosure
3.Appraisal disclosure
4.APR disclosure

2

8

.How many days prior to this loan transfer does the current mortgage servicer have to inform the
customer?

15

9

What is not likely to happen if the lender/investor finds fraud?
1.A 1% interest rate increase on the loan
2.The lender and/or broker will be required to repurchase the loan
3.The entire loan can be called due and payable
4.The loan officer must pay back any premium made on the loan

1

10

.What is the maximum penalty for providing false information on a federally related loan?

4.Up to $1,000,000 fine and jail time

11

What law requires the lender to collect borrower information for first mortgages and home
improvement loans?

HMDA

12

HMDA requires the lenders to obtain which of the following information for each borrower?
1.Age and Race
2.Race and Sex
3.Marital status and Sex
4.Marital status and Age

2

13

16.Which of the following does RESPA require on a purchase?
1.Lead paint notice
2.A 1008
3.APR disclosure
4.Settlement cost booklet

4

14

18.What is the minimum amount of time that a lender has to inform the borrower that they are
transferring servicing?
1.15 days
2.45 days
3.10 days
4.60 days

1

15

19.A yield spread premium is disclosed on which document?

2.Good faith estimate

16

20.Which is the primary law that affects mortgage loan closings?

3.RESPA

17

If a loan officer were to take a loan application Tuesday at 1:00 p.m., what is the last day that the
good faith estimate must be mailed or disclosed?

3.Friday before midnight

18

If you are a seller, it is acceptable to REQUIRE the use of a specific title provider:
1.if the requriement pertains to the sellers own policy only.
2.if the other service provider is an affiliate.
3.as long as you provide the borrower with the appropriate disclosure within three
business days of the loan application.
4.only if the service provider is licensed.

1

19

RESPA imposes requirements about or prohibits all of the following except:
1.legal kickbacks and referral fees.
2.the loan origination fee.
3.the amount of prepaids.
4.information that must be disclosed to the borrower at the loan application or within 3
business days of the application

2

20

Regulation Z requires:
1.disclosure of the settlement costs to buyers and sellers.
2.disclosure of the impound accounts and the prepaids of the borrower(s).
3.computation and disclosure of the APR to the borrowers.
4.disclosure of servicing information on the loan.

3

21

If a borrower and a co-borrower are refinancing a home that they both occupy, at the closing -
who must receive a copy of the rescission disclosure?

1.Both borrowers

22

If a loan is a refinance, and the loan is improperly closed and funded in one day with no three day
rescission period, how long do the borrowers have to rescind the transaction?

3 years

23

27.What is not included in the APR calculations?
1.Mortgage insurance premium
2.Origination fee
3.Processing fee
4.Hazard/Fire insurance premium

4.Hazard/Fire insurance premium

24

Regulation B allows all of the following except:
1.inquiries about the ages of dependents.
2.inquiries about citizenship and residency status.
3.inquiring about receiving child support and/or alimony.
4.using the terms husband or wife when inquiring about a potential co-borrower.

4

25

f an applicant has been denied credit, how long does the lender have to get a letter of adverse
action to him/her?

30 days

26

30.If the file is inactive, for borrower non-performance a declination letter must be sent within?

30 days

27

33.A Good Faith Estimate:
1.must be within $500 of the final costs.
2.is an estimate only and is not required to reflect the actual settlement costs.
3.should exhibit a reasonable relationship to the actual final settlement costs.
4.be within $1,000 of the final costs.

3.should exhibit a reasonable relationship to the actual final settlement costs.

28

34.If a home is purchased with an FHA owner-occupied loan, what type of FHA refinance can the
borrower use to refinance?
1.FNHMA
2.USFA
3.IRRRL
4.Streamline

4.Streamline

29

Which of the following must be provided to the client on an ARM loan?
1.The “Consumer Handbook on Adjustable Rate Mortgages”
2.The “ARM Handbook”
3.“When Your Home is on the Line"
4."Your Settlement Costs and You” booklet by HUD

1.The “Consumer Handbook on Adjustable Rate Mortgages”

30

The CHARM booklet was prepared by:
1.the CFPB.
2.The Dept. of Housing and Urban Development.
3.The Federal Housing Administration.
4.The Federal Reserve Board.

Correct Choice:4

31

38.The following two disclosures are required by RESPA, if applicable:
1.1003 and AfBA
2.LE and AfBA
3.1003 and 1008
4.Borrower’s Signature Authorization and GFE

2.LE and AfBA

32

Which of the following are functions of FACTA? (Select all that apply)
1.To improve consumer access to credit information
2.To improve resolution of consumer disputes with credit agencies
3.To prevent identity theft and restore credit history to victims of identity theft
4.All of the above

4.All of the above

33

43.What is the objective of FCRA?
1.To assure fairness, relevancy, confidentiality, and accuracy
2.To assure all borrowers have no access to credit information
3.To make sure that obsolete information cannot be deleted
4.Insure that credit reports are never seen by the borrower

1.To assure fairness, relevancy, confidentiality, and accuracy

34

Under the FCRA, when must credit reporting agencies delete obsolete information?

.10 years from the date opened, except for bankruptcies

35

46.When is it legal and/or acceptable for the loan originator to provide the consumer with a copy of
his/her credit report?
1.Never
2.When the customer pays for it
3.When the customer requests it
4.When contracts with the credit reporting agency do not prohibit it

4.When contracts with the credit reporting agency do not prohibit it

36

48.Regulation B does which of the following?
1.Protects a borrower from fraudulent use of their information
2.Requires Upfront Mortgage Insurance on all FHA loans
3.Provides equality in the extension of credit
4.Regulates advertising of APR

3.Provides equality in the extension of credit

37

.Who provides the Annual Escrow Account Disclosure Statement?

The Servicing Lender

38

When is an Affiliated Business Agreement required?

.If an affiliated business is providing services

39

.Which of the following is a purpose of RESPA?
1.To regulate interest rates
2.To monitor high cost loans
3.To eliminate kickback and referral fees
4.To track real estate settlement trends

3.To eliminate kickback and referral fees

40

52.What is a purpose of the Truth in Lending Act?
1.To enable consumers to compare the cost of credit from lender to lender
2.To keep loan officers honest
3.To prevent kickback and referral fees
4.To oversee commercial lending

1.To enable consumers to compare the cost of credit from lender to lender

41

If an advertisement contains TRIGGER TERMS, what must then be disclosed?
1.APR only
2.APR and payment amount
3.Interest rate, term, balance, and APR
4.Interest rate, closing costs, and APR

3.Interest rate, term, balance, and APR

42

55.Which of the following is not a prepaid finance charge?
1.Origination fee
2.Discount point
3.Upfront Mortgage Insurance Premium
4.Appraisal fee

4.Appraisal fee

43

56.What is the purpose of HMDA?
1.To detect discriminatory lending
2.To prevent high cost loans
3.To regulate Home Mortgage Appraisals
4.To oversee the FHA

1.To detect discriminatory lending

44

57.Regulation B is affiliated with which act?
1.TILA
2.ECOA
3.HMDA
4.HOEPA

2.ECOA

45

ECOA prevents discrimination based on
1.Income
2.Marital Status
3.Location
4.Employment

2.Marital Status

46

The practice of denying home financing in certain neighborhoods is called:
1.Redlining
2.Bait and switch
3.Dart boarding
4.Skimming

1.Redlining

47

How long must a brokerage owner keep records?

3 years

48

61.Which of the following is an example of a subprime loan?1.2/28
2.3/1
3.5/1
4.7/1

1.2/28

49

62.A 360/180 best describes what type of loan?
1.Subprime
2.FHA
3.Balloon
4.ARM

3.Balloon

50

63.How often must a borrower receive an annual privacy notice according to the GLBA?
1.As long as they are customers
2.Every 6 months
3.Only at closing
4.With initial disclosures, then annually for the first 5 years

1.As long as they are customers