Fair Housing Act and Consumer Protections in Mortgage Lending, Exams of Real Estate Management

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HUD Certification Exam 2024-

2025. Questions & Correct

Answers. Graded A+

7 - ANSThe Fair Housing Act, as amended, protects how many characteristics? Account History - ANSCredit: Payment history of accounts, including late payments, delinquencies, judgments, and liens. Account Information - ANSThe section of a credit report that contains information about a student loan. Adjustable Rate Mortgage - ANSHave an initial interest rate that applies for a defined period of time and then adjusts at a pre-determined intervals for the life of the loan. Adjusted Gross Income - ANSGross income minus adjustments, or reductions, that one is eligible for, such as deductions for unreimbursed business expenses, tuition and fees, and contributions to certain retirement accounts. Affordable front-end ratio for renters - ANS30% Amounts Owed - ANSCredit: Ratio of total credit extended to the amount of credit owed. AnnualCreditReport.com - ANSWhere does a client go to get a free credit report? Association Dues - ANSCharged by community or Homeowners Association to pay for repairs, upkeep, landscaping, improvements and property management. Back-End Ratio - ANSA rate that calculates a borrower's total monthly debt, including housing and other

debt obligations, as a percentage of gross monthly income. Balloon Payments - ANSAn oversize payment due at the end of a mortgage Capacity - ANSLender considers consistency of employment and income, adequacy of income to repay debt, recurring debts and frequency and type of wages Capital - ANSLenders inquire about how much money a borrower has saved to pay a deposit or down payment for the home intended to purchase. Cash-Out Refinancing - ANSBest Improvement loan: A client leverages home equity through a new, larger loan to access funding to make improvements to the home CD; Money Market; High-Interest Account - ANSExamples of accounts that would be ideal for short-term large purchase savings CFPB - ANSTo create a federal agency charged with addressing failures of consumer protections Character - ANSCredit history, employment history, and housing stability to determine the likeliness that the borrower will repay their debts Civil Rights Act of 1968 - ANSFollowing the assassination of Dr. Martin Luther King Jr., Congress passed what monumental piece of legislation, which prohibits discrimination in housing sales, rentals, and financing based on race, color, national origin, religion, sex, disability and familial status? Closing Costs - ANSFees for final property transfer that are not included in the price of the property. Closing Disclosure

• ANSDesigned to help consumers understand all of the costs of

the transaction, must be provided to consumers at least three business days before closing. Collateral - ANSLenders often request a borrower to pledge specific property or assets as collateral to secure repayment of loan. Community Development Block Grant Program - ANSHUD program that provides grants to states and localities to provide decent housing and a suitable living environment and to expand economic opportunities, principally for low-and-moderate income persons Consumer Rights - ANSThe section of the credit report that contains information about how to correct inaccuracies. Conventional Loan - ANSA mortgage loan backed by private lenders. Loans with a DP less than 20% of purchase price may require private mortgage insurance (PMI) Deed Restrictions - ANSLegally enforceable terms that govern the use of real estate Default - ANSThe inability to make timely payments or fulfill legal obligations of loan terms. Discount Points - ANSA type of pre-paid interest normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount Dual Tracking - ANSThe process that occurs when the servicer moves forward with foreclosure while simultaneously working with the borrower to avoid foreclosure. Energy Efficient Mortgage - ANSBest loan: A client would like to add insulation to the basement and attic as well as seal air leaks in order to reduce the home's energy consumption. Energy

Efficient Mortgage (EEM) - ANSAssists individuals to purchase an energy efficient home or refinance a home to make energy efficient improvements Equal Credit Opportunity Act (ECOA) - ANSRequires lenders to make credit available equally without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income form public assistance programs Equity - ANSValue of ownership interest in property. Escrow - ANSFunds to be used for specific purposes by parties carrying out a mutual transaction, deposited with a third party. Fair and Accurate Credit Transactions Act (FACTA) - ANSYou have the right to a free annual credit report. Fair and Accurate Credit Transactions Act (FACTA) - ANSYou have the right to place a fraud alert on your credit file. Fair Credit Billing Act (FCBA) - ANSWhich federal law protects a consumer's right to dispute a billing error associated with his/her credit card account. Fair Credit Reporting Act (FCRA) - ANSWhat act limits employers access to persons credit report. Fair Credit Reporting Act (FCRA) - ANSYou have the right to dispute information in your credit file that is incomplete, inaccurate, or unverifiable. Fair Credit Reporting Act (FCRA) - ANSYou have the right to know what is in your credit file. Fair Housing Assistance Program (FHAP) - ANSProvides annual funding to state and local agencies that enforce fair housing laws that are substantially equivalent to the Fair Housing Act. These funds go

towards an agency's capacity building, administrative costs, investigative and enforcement efforts, training and other projects designed to support enforcement of fair housing law. Fair Housing Initiatives Program (FHIP) - ANSProvides funding to fair housing organizations and nonprofits that assist people who may have been victims of housing discrimination. Fair Market Rent - ANSA determination of the monthly rent of a rental property, calculated by HUD. Factored by geography and unit size, sets payment standards for public housing programs FHA 203k Loan - ANSA loan insured by FHA to provide you with an initial loan for purchasing a home as well as funding for home improvement. FHA 203k Loan - ANSBest improvement loan: A client intends to purchase a home that needs major repairs and will make those repairs with funding rolled into the mortgage loan. Fixed Rate Mortgage - ANSTypically paid off in 30 years, has an interest rate that doesn't fluctuate. Foreclosure - ANSA legal process in which mortgaged property is sold to pay the loan of a defaulting borrower. Front-end ratio for obtaining a conventional loan - ANS28% Front-end ratio for obtaining an FHA loan - ANS31% Front-end Ration - ANSA rate that calculates a borrower's housing-related obligations as a percentage of gross monthly income. AKA - Housing Ratio Ground Rent - ANSAn arrangement in which the owner of a dwelling or structure does not own the land on which the

structure resides. Hardest hit Fund - ANSTo enable 18 states and the District of Columbia to develop locally tailored programs to assist struggling homeowners in their community HELOC - ANSBest Improvement loan: A client's home improvement plan consists of multiple expenses that may be paid over an extended period of time. Home Equity Line of Credit (HELOC) - ANSA line of credit from which you can borrow at any time during the draw period, up to your credit limit. Home Equity Loan - ANSBest Improvement loan: A client's home improvement plan consists of a large one-time expense. Home Equity Loan - ANSProvides a lump sum of money for home improvements - often referred to as a second mortgage HOME Investment Partnership Program - ANSHUD program that provides grants to states and localities for building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low- income people. Home Ownership and Equity Protections Act (HOEPA) - ANSFederal law enforcing special disclosure requirements and restrictions on terms for loans that meet high-cost mortgage tests. Homeowners Insurance - ANSAn insurance policy that can provide coverage for damages to a dwelling and contents that belong to the homeowner. Housing Choice Voucher - ANSCommonly referred to as Section 8; distributed locally by PHAs where you are free to choose any

housing that meets program requirements If client has a project based voucher and moves out of the unit, do they lose the voucher assitance? - ANSYes Inquiries - ANSThe section of the credit report that will show recent attempts to open a credit card. Issuance of New Mortgage Rules - ANSTo make it easier for borrowers to understand loan terms, to require homeownership counseling for some mortgages, and to expand protections Know Before you Owe (TRID) - ANSrequires easier to use mortgage disclosure forms that clearly outline the terms of the mortgage to the borrower and provide detailed explanations about how form should be completed and used. Length of Credit History - ANSCredit: Overall length of credit history in the report as well as the average age of accounts. Loan Estimate - ANSDesigned to help consumers understand the key features, costs, and risks of the mortgage loan for which they are applying, must be provided to consumers no later than three business days after they submit a loan application Loan-to-Value Ratio - ANSA percentage calculated by dividing the amount of the outstanding loan amount by the sales price or appraised value of the home Making Home Affordable - ANSTo help homeowners avoid foreclosure, stabilize the housing market, and improve the economy Marketing Analysis - ANSAim is to identify groups of people who would benefit most if targeted by the campaign, the

characteristics of these people, and their expectations. Mortgage Insurance Premium (MIP) - ANSA monthly payment, usually part of the mortgage payment for FHA loans, paid by a borrower for mortgage insurance. National Mortgage Settlement - ANSTo penalize five financial institutions for deceptive lending and foreclosure practices Networking Event - ANSThe opportunity to increase awareness of the plans and actions of housing industry members, private organizations and foundations, public housing agencies, neighborhood groups, regional organizations, and others to further fair housing objectives. New Credit - ANSCredit: Number of recent credit inquiries, as well as new credit accounts. NSF Fee - ANSFee charged if there is not enough money in an account to cover a check payment of other purchase. Overdraft Fee - ANSFee charged when an account doesn't have money to cover a purchase and the financial institution loans money to complete the payment. Per FHA, you are considered self-employed if you have ___% or greater ownership interest in a business. - ANS25% Personal Information - ANSThe section of the credit report that contains employer details. Pre-Approval - ANSWhen a lender commits to lend a fixed loan amount based on review of completed loan application, credit reports, debt, savings and a review by an underwriter. Pre-Payment Penalty - ANSA provision in some loans that charges a fee to a borrower who

makes mortgage payments ahead of schedule. Principal - ANSThe amount of money borrowed to buy a house or the amount of the loan that has not been paid back to the lender. Private mortgage Insurance (PMI) - ANSInsurance policy that protects a lender from potential risks when a homebuyer pays less than 20% for a down payment. Profit and Loss Statments - ANSA summary of revenue, costs, and expenses incurred during a defined period, such as a fiscal year. Project Based Voucher - ANSAllows PHAs to allocate up to 20% of its housing choice vouchers for project-based vouchers attached to specific housing units Public Housing Agencies - ANSA state, county, municipality, or other government agency that develops or operates low-income housing. Public Records - ANSThe section of the credit report that contains court information such as a bankruptcy. Real Estate Settlement Procedures Act (RESPA) - ANSProhibits certain abusive practices that increase the cost of settlement services. Requires mortgage transaction disclosures that describe closing costs, lender servicing and escrow account practices, and business relationships Reasonable Accommodation - ANSHousing provider has a policy of requiring tenants to come to the rental office to pay their rent. A tenant with a mental disability, who is afraid to leave her unit, is allowed to mail her rent payment. Reasonable Modification - ANSA property manager of an apartment

complex that receives federal financial assistance installs a ramp so that a tenant in a wheelchair can easily access her first- floor apartment. Redlining - ANSThe practice of refusing to make residential loans or imposing more onerous terms on any loans made because of the predominant race, color, national origin, religion, sex, disability, or familial status of the area's residents. Renters Insurance - ANSAn insurance policy that provides coverage for damages, within a rental property, to renters' belongings and liability. Second Mortgage - ANSA subordinate loan on a property Servicemembers Civil Relief Act

• ANSAn act that protects military personnel and their dependents in issues related to housing, including certain protections against default judgement, foreclosure and eviction Special Assessments - ANSFunds collected to pay for large maintenance projects that benefit the entire community. Stop Payment Fee - ANSFee charged to invalidate a check before it is cashed. Streamline 203k Loan - ANSPermits homebuyers and homeowners to finance up to $35K into their mortgage to repair, improve, or upgrade their home. Streamlined 203k Loan
• ANSBest loan: There are a handful of minor repairs that a client would like to make to the home that he is buying. He expects that they will be complete in just a few months. Subprime Mortgage Loans - ANSA type of mortgage with less stringent lending and underwriting terms and conditions,

usually offered to borrowers with blemished or limited credit histories. Teaser Rate - ANSAn initial temporary interest rate on an ARM that results in lower mortgage payments and only remains in effect for a short period of time before increasing. The Know Before you Owe rule combined the Good Faith Estimate and the Truth in Lending disclosure and became what document? - ANSLoan Estimate The Know Before you Owe rule combined the HUD-1 and the final TIL disclosure became what document? - ANSClosing Disclosure The midpoint in the family income range for a metropolitan statistical area of for the non- metropolitan parts of a state - ANSArea Median Income Title 1 Loan - ANSA loan insured by FHA that may be used for alterations, repairs, and site improvements on single family homes and for alterations and repairs on multifamily homes. True - ANSThe Fair Housing Act does not prohibit a lender from showing potential clients information about different loans. Truth in Lending Act (TILA) - ANSRequires lenders disclose important information to protect consumers against inaccurate and unfair loan billing and credit card practices, it requires lenders to provide consumers with loan cost information so that they can comparison shop. Type of loan that may be a good fit for those that have a poor credit history and/or are ineligible for other loans - ANSSubprime Mortgage Loan Type of mortgage may be a good fit for eligible veterans, suitable credit

and sufficient income and have a certificate of eligibility. - ANSVA Loan Type of mortgage may be a good fit for those who want to live in eligible rural areas, make less than 115% AMI, need flexible credit guidelines, may not have funds for a DP - ANSUSDA Loan Type of mortgage that is a good fit for those that have limited funds for a down payment and closing costs - ANSFHA Mortgage Types of Credit - ANSCredit: Variety of accounts (e.g. credit card, auto loan, mortgage) What is the biggest factor in determining the cost of your insurance? - ANSLocation of your home What is the purpose for the Veterans Affairs Supportive Housing (VASH) program - ANSTo end veterans homelessness What is the purpose of the Housing Opportunities for Persons with AIDS (HOPWA) program - ANSTo assist with housing needs of people living with HIV/AIDS What item is critical to consider when working with a client to prepare a household system maintenance plan? - ANSTarget Replacement Date When must your lender terminate PMI? - ANS78% or at midpoint of the loan. You can request earlier once principal balance falls below 80% of original loan value When preparing a emergency preparedness plan, where is the best location for meeting point? - ANSA location outside of the neighborhood, preferably a place where your family can live temporarily. Wire Transfer Fee - ANSFee charged when a client

sends a payment to another account electronically through electronic funds transfer (EFT)