Uniform State Content

Question 1

The unique identifier of a person originating a residential mortgage loan must be clearly shown on all the following, except:

Answer 1

all internal office communications.

Question 2

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 is a key component of what Federal Law?

Answer 2

Housing and Economic Recovery Act of 2008

Question 3

A Residential Mortgage Loan Originator employed by a federally insured depository institution:

Answer 3

must be registered.

Question 4

Which of the following persons is not exempt from licensing under the SAFE Act?

Answer 4

An individual who is an independent contractor engaging in residential mortgage loan origination activities as a loan processor or underwriter.

Question 5

All licenses issued shall be valid for a term of not more than one year from the date of issuance and shall expire:

Answer 5

on December 31st of the year issued.

Question 6

What government entity has backup authority to establish a loan originator licensing system if it determines that the Nationwide Mortgage Licensing System and Registry is failing to meet the requirements and purposes of the SAFE Act:

Answer 6

Consumer Financial Protection Bureau.

Question 7

To meet the annual continuing education requirements required by the SAFE Act, a licensed mortgage loan originator shall complete:

Answer 7

At least 8 hours of education approved by the Nationwide Mortgage Licensing System and Registry.

Question 8

A licensed mortgage loan originator who subsequently becomes unlicensed must complete the continuing education requirements:

Answer 8

For the last year in which the license was held prior to issuance of a new or renewed license.

Question 9

To meet the written test requirement of the SAFE Act, an individual must achieve a test score:

Answer 9

of not less than 75 percent correct answers to questions.

Question 10

For purposes of the SAFE Act, a person has shown that he or she is not financially responsible when they show a disregard in the management of their own financial condition. Which of the following would best indicate that an individual has not shown financial responsibility?

Answer 10

A pattern of seriously delinquent accounts within the past 3 years

Question 11

As defined by the SAFE Act, a traditional mortgage loan is:

Answer 11

Any 30-year fixed-rate mortgage loan.

Question 12

An individual who completed 20 hours Pre-Licensure education but failed to acquire a valid state license as a mortgage loan originator within three years must:

Answer 12

complete 20 hours of Pre-Licensure education.

Question 13

An individual may retake a test 2 consecutive times, with each consecutive taking occurring at least 30 days after the preceding test. After failing 3 consecutive tests, an individual shall:

Answer 13

Wait at least 6 months before taking the test again.

Question 14

Xavier has been charged with alleged violations of his state’s SAFE Act. Before a civil penalty may be imposed on him, the state is required to:

Answer 14

provide Xavier notice and an opportunity for a hearing.

Question 15

Which of the following best describes a Balloon Mortgage?

Answer 15

A partially amortized loan with a final payment substantially larger than the others.

Question 16

What is the name of the percent added to the index to calculate the payment interest rate on an ARM?

Answer 16

Margin

Question 17

When a loan gains status as a Qualified Mortgage, it carries with it a legal presumption of complying with the Ability to Repay requirements. The CFPB’s final rule creates two different kinds of legal presumption: a safe harbor and:

Answer 17

rebuttable presumption.

Question 18

A standardized conventional loan written on uniform documents that meets the purchase requirements of Fannie Mae (FNMA) and Freddie Mac (FHLMC) is defined as a:

Answer 18

Conforming loan.

Question 19

The purpose of the Rural Housing Guaranteed Loan Program is to enable eligible low to moderate-income rural residents to acquire modestly priced housing for:

Answer 19

Primary residences

Question 20

Which of the following is not considered one of the 4 categories of a Qualified Mortgage (QM)?

Answer 20

High-Cost QM Loan

Question 21

The U.S. Department of Veteran Affairs does not make loans, it:

Answer 21

Guarantees loans made by lenders to qualified veterans.

Question 22

Conventional conforming guidelines specify that if the mortgage is secured by a second home or an investment property, the borrower may own or be obligated on up to:

Answer 22

ten financed properties (including his or her principal residence).

Question 23

A loan program best described as a loan where a borrower makes payments to principal and interest every two weeks rather than once a month is called a:

Answer 23

Bi-Weekly mortgage.

Question 24

FHA security instruments require a borrower to establish bona fide occupancy in a home as the borrower’s principal residence within:

Answer 24

60 days of the signing of the security instrument.

Question 25

Loan level Price Adjustments (LLPA’s) were implemented by Fannie Mae and Freddie Mac to account for the borrower and:

Answer 25

loan risk characteristics.

Question 26

The Cost of Funds Index (COFI) is traditionally used to determine interest rates on what type of loan?

Answer 26

Adjustable-Rate Mortgage (ARM)

Question 27

A borrower has been approved for a loan with a 95% loan-to-value. What are the maximum contributions by an interested party allowed this borrower based on conforming lender guidelines?

Answer 27

3%

Question 28

This ARM product offers the consumer an interest rate that is fixed for an initial period then readjusts over the remainder of the life of the loan. What is the name of these loans that are a mix of a fixed-rate period and an adjustable-rate period?

Answer 28

Hybrid loan

Question 29

How are the FNMA/FHLMC conforming loan limits set each year?

Answer 29

The Federal Housing Finance Agency (FHFA) uses the October-to-October percentage increase/decrease in average housing prices, as indicated in the House Price Index report issued by the Federal Housing Finance Board (FHFB), to adjust the conforming limits for the subsequent year.

Question 30

On a 3/2/6 Adjustable-Rate Mortgage loan, the 3 is the:

Answer 30

Initial adjustment cap.

Question 31

Which loan types indicates that the borrower is obtaining a second mortgage and making a down payment?

Answer 31

An 80-10-10 loan

Question 32

MIP is a feature of what type of mortgage loan?

Answer 32

An FHA loan

Question 33

A borrower is a 65-year-old retiree with significant equity in his home. Which of the following would be the best option to assist him with paying for repairs on his home?

Answer 33

HECM

Question 34

The applicant has obtained a 5-1 ARM. The index is the one-year LIBOR of 2.25%. The margin is 2.50%. The fully indexed rate and start rate are 4.75%. The caps are 3-2-6. After 5 years, the index has increased to 10.75%. What will be the borrower’s interest rate at the beginning of year 6?

Answer 34

(a) 13.25% (b) 10.75% (c) 7.75% (d) 4.75%

Question 35

What is the name of the automated underwriting system that evaluates mortgage delinquency risk and arrives at an underwriting recommendation of Approve/Eligible?

Answer 35

Desk Top Underwriter

Question 36

VA’s debt-to-income ratio is a ratio of total monthly debts’ payments (housing expense, installment debts, etc.) to gross monthly income. It is a guide and, as an underwriting factor, it is secondary to:

Answer 36

the residual income method

Question 37

A borrower obtains a 3/2/1 buy down on a 30-year fixed rate conforming conventional loan. The note rate is 8.00%. What will the payment interest rate be in the first year of the buy down loan?

Answer 37

5.00%

Question 38

What is the name of a loan often referred to as the “one-time-close” or the “single-close” construction loan program?

Answer 38

Construction-to-Permanent Loan