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NMLS TEST-Affinity with Complete
Solutions
What law deals with credit, APR & Advertising of consumer loans? - ANS-TILA Which regulation prohibits kickbacks? - ANS-RESPA Which regulations require the lender to cancel PMI when the loan reaches 78% LTV? - ANS-HPA-Homeowners Protection Act Which Regulation prohibits fee splitting? - ANS-RESPA Regulation X is the letter used to describe which law? - ANS-RESPA RESPA is the acronym used to describe which law? - ANS-Real Estate Settlement Procedures Act What type of mortgage requires a non-refundable funding fee? - ANS-VA Loan What is the provision in a mortgage enabling a lender to demand full repayment if the borrower DEFAULTS on the loan? - ANS-Acceleration Clause What is the provision in a mortgage enabling a lender to demand full repayment if the borrower TRANSFERS the loan? - ANS-Alienation Clause What does CFPB stand for? - ANS-Consumer Financial Protection Bureau What two laws created the CFBP? - ANS-Dodd Frank Act and Consumer Finance Protection Act Which regulation is designed to help meet the Credit needs of the Communities in which it operates? - ANS-CRA- Community Reinvestment Act Under ECOA rules and regulations, how many days the borrower have to request a copy of an appraisal report? - ANS- Under ECOA rules and regulations, how many days does the lender have to provide a copy of an appraisal report, once requested by the borrower? - ANS- If a loan application is APPROVED, Under ECOA rules & regulations, when MUST a copy of the appraisal be provided to the borrower? - ANS-3 business days
Conforming loans follow guidelines of which regulators? - ANS-Fannie Mae and Freddie Mac Which regulation requires the lenders to "BE EQUAL" when extending credit to borrowers? - ANS-ECOA How old must a borrower be to qualify for a Reverse Mortgage? - ANS-62 years old Which regulation has the primary function of preventing Identity Theft? - ANS-FACT Act Which regulation has Section 114 Rules? - ANS-FACT Act Which regulation requires the creditor to verify the VALIDITY of any change of address received? - ANS-SECTION 114 of the FACT Act What is the payment method used in a reverse mortgage that allows the homeowners to receive a monthly check while living in the property? - ANS-Tenure Method What is the fraud scheme where a borrower uses someone else's name to purchase the property, but the person WILL NOT be living at the property? - ANS-Straw Borrower What government lender "insures" mortgages? - ANS-FHA What government lender "Guarantees" Mortgages? - ANS-VA Loans What government lender loans money to fund purchases in rural areas? - ANS-USDA/ Dept. of Agriculture What is the value remaining in property after all liens and debts have been paid? - ANS- Equity A borrower is refinancing his home. How much time does Reg Z give him to change his mind? - ANS-3 days Which regulation established the 3-day right of rescission rule? - ANS-TILA Redlining is part of which regulation/Law? - ANS-Fair Housing Act Blockbusting is part of which regulation/Law? - ANS-Fair Housing Act Steering is part of which regulation/Law? - ANS-Fair housing act Trying to convince a homeowner to SELL his home by implying that another race/ethnicity is moving in the neighborhood is called? - ANS-Blockbusting/panic selling
Which law allows a consumer who has had her credit card used by an identity thief to place a credit freeze on her credit report? - ANS-FACT ACT Which law requires creditors to TRUNCATE debit and credit card info on receipts? - ANS-FACT ACT Which regulations states that loan officers secure and dispose of borrowers sensitive credit information? - ANS-FACT ACT Which regulation states that if a borrower is denied credit, he can receive a FREE copy of his credit report? - ANS-FRCA - Fair Credit Reporting Act Which regulation states that if a borrower is unemployed, he can receive a FREE copy of his credit report? - ANS-FRCA - Fair Credit Reporting Act Which regulation states that if a borrower is on SSI or Disability, he can receive a FREE copy of his credit report? - ANS-FRCA- Fair Credit Reporting Act Which regulation states that if a borrower has been the victim of fraud,he can receive a FREE copy of his credit report? - ANS-FRCA- Fair Credit Reporting Act Which regulation states that a borrower can receive a FREE copy of his credit report once a year? - ANS-FACT ACT During the loan process, if you ask a borrower is he/she is single.....What law are you violating? - ANS-ECOA Which regulation states that the only correct way to ask a about a borrowers martial status is: are you married, unmarried, or separated? - ANS-ECOA Who is responsible for providing the closing disclosure to the borrower? - ANS-The Creditor/Lender Who is responsible for providing the closing disclosure to the Seller? - ANS-Settlement Agent/ Title Agent Which regulation requires the borrower to receive the Loan Estimate? - ANS-TILA Which regulation requires the borrower to receive the Closing Disclosure? - ANS-TILA Which regulation requires the borrower to receive the Loan Estimate within 3 business day? - ANS-RESPA Which regulation requires the borrower to receive the Closing Disclosure within 3 Business days? - ANS-RESPA
As it relates to the initial loan estimate-what is the definition of a business day? - ANS- Any day that he Creditor's office is open for buisness According to TILA/RESPA Z- what is the definition of a business day? - ANS-Any calendar day except for Sunday and Legal Holiday During the loan process, where do you find HMDA government monitoring information?
- ANS-Section X of the 1003 application Where does HMDA stand for? - ANS-Home Mortgage Disclosure Act What appraisal approach is used when appraising property that has been destroyed by a natural disaster? - ANS-Cost Approach or replacement cost approach In the sales comparison approach, how many comps are required? - ANS- What is another name for the Financial Services Modernization Act of 1999? - ANS- Graham Leach Bliley Act How many days does a CREDITOR have to notify a consumer of the status of credit application? - ANS-30 days Which regulation states that a creditor has 30 days to notify a consumer of an application approval or denial? - ANS-ECOA How many hours of Ethics is required to be taught in the 20hr Prelicsening course? - ANS- How many hours of Ethics is required to be taught in the 8hr Continuing Education course? - ANS- How many hours of Federal Law is required to be taught in the 20hr Pre-Licensing course? - ANS- How many hours of Federal Law is required to be taught in the 8hr Continuing Education course? - ANS- A mortgage that includes more than one parcel of land is called what? - ANS-Blanket Mortgage A mortgage that includes appliances such as a stove or refrigerator is called what? - ANS-package mortgage Which closing document itemizes the final closing cost and items paid in connection with the loan for the borrower? - ANS-Closing Disclosure
What does GLBA stand for? - ANS-Graham Leach Bliley Act What type of property is covered under RESPA? - ANS-1-4 unit residential property Which regulation allows lenders to OBTAIN information regarding a borrowers ethnicity, to help identify possible discriminatory patterns? - ANS-HMDA When can a borrower request cancellation of PMI? - ANS-When LTV reaches 80% When must the lender automatically cancel PMI? - ANS-When the LTV reaches 80% What is the primary market? - ANS-Where borrowers/consumers obtain mortgage loans What is the secondary market? - ANS-Where lenders buy & sell loans from one another Name the two Government Sponsored Enterprises (GSEs)? - ANS-Fannie Mae Freddie MAc Which GSE is the Federal National Mortgage Association? - ANS-Fannie Mae Which GSE is the Government National Mortgage Association? - ANS-Ginnie Mae Which GSE is the Federal Home Loan Mortgage Association? - ANS-Freddie Mac Which AUS System does Fannie Mae use? - ANS-Desktop Underwriter (DU) Which AUS system does Freddie Mac use? - ANS-Loan Prospector (LP) How often must the National DNC list be updated? - ANS-Every 90 days How often must a lenders internal DNC list be updated? - ANS-Every 30 days What is the penalty for violating the DNC list? - ANS-$16, Which regulation allows the borrower to sue for 3X's the amount paid for title insurance? ` - ANS-RESPA Section 9 If money was collected, and a borrower rescinds, how long does escrow have to return the funds? - ANS-20 days What is the only way to ask about marital status, according to what law? - ANS-Are you married, unmarried or separated according to Regulation B (ECOA) How long does a creditor have to make a decision on a credit application? - ANS- days
According to what regulation does a lender have 30 days to make a decision on a credit application? - ANS-ECOA What law requires that the equal housing lender slogan and/or logo be placed on all advertising? - ANS-Fair Housing Act How long does a person have to sue for a violation under the Fair Housing Act? - ANS- 1 year Which law says that the lender cannot inquire about a person's sexual orientation or gender identity? - ANS-HUD Equal Access Rule What is the site where you can receive a free copy of your credit report, according to the FACT Act? - ANS-www.annualcreditreport.com Which regulations requires you to shred or burn sensitive credit information when no longer needed? - ANS-FACT Act What regulation is designed to protect consumer's non-public information and how it can and cannot be shared? - ANS-GLBA Which law requires lenders to verify the date of birth, SS# and ethnicity of a person getting a loan in the United States? - ANS-U.S. Patriot Act If you fail the test 3 times, what is the waiting period to retest? - ANS-6 months/ days Under HMDA, how long must a lender keep the Loan Application Register (LAR)? - ANS-3 years What day does your license expire each year? - ANS-December 31st What is the renewal period to keep your license current? - ANS-Nov 1st-Dec 31st Which Act includes provisions to protect consumers' personal financial information held by financial institutions? - ANS-Graham-Leach-Bliley Which act requires companies to give consumers privacy notices? - ANS-Graham- Leach-Bliley Which act was implemented to promote financial stability and to protect consumers from abusive practices? - ANS-Dodd Frank Act What is RESPA section 6 responsible for? - ANS-Mortgage Servicing
"APR" means? - ANS-Annual percentage rate. This is the cost of credit expressed as a percentage. A Reconveyance Clause is: - ANS-The method used to transfer title for a property following full payment of a loan. Reconveyance is typically used with deed of trust. A subordinate lien is: - ANS-The same as a second mortgage. It may also be called a junior lien What is a mortgage? - ANS-A legal Document that connects a promissory note with the collateral used to secure the note. A deed is: - ANS-A legal instrument that conveys title to real property. An amortization schedule is: - ANS-A table providing the periodic payments needed to pay off a loan by the end of its term. The Payments include principal and interest. Qualified mortgages may not have Back-end DTI exceeding: - ANS-43% What is a note? - ANS-A legal document that obligates a borrower to repay a loan. It specifies the terms by which the repayment will occur. It may also be called a promissory note. VA underwrites use a debt ratio of: - ANS-41% Discount points are paid to? - ANS-The lender at closing to reduce the note rate of the loan Securitization is used to? - ANS-Pool similar types of loans to create mortgage- backed securities for sale on the financial market. These securities are used to create a renewable source of funds for lenders. When does "Dry Settlement" occur? - ANS-Parties meet to execute documents, but funds are not disbursed. When does "Wet Settlement" occur? - ANS-Parties meet to execute documents and funds are subsequently disbursed Name 4 involuntary liens that could be filed on a property. - ANS-Tax Liens Mechanics Liens Judgement Attachments What type of lien is a voluntary lien on property? - ANS-mortgage
What is the definition of "Real Property"? - ANS-Land and anything that is permanently affixed to it Suppose the payment is late on a conventional loan and the monthly principal is $1,000, the monthly interest is $500, the monthly taxes are $125 and the monthly insurance is $25.00.... what is the amount of the late payment? - ANS-$75 ($1,500 x 5%) *Remember - late charges are not calculated on the taxes and insurance Suppose the payment is late on a FHA loan and the monthly principal is $1,500, the monthly interest is $150, the monthly taxes are $150, the MIP is $210 and the monthly insurance is $33.00.... what is the amount of the late payment? - ANS-$66 ($1,500 + $150 x 4%) Mortgage companies must submit a residential loan origination activity report to the NMLSR every: - ANS-three months What is the process in which a broker originates and closes a loan in his/her own name, then transfers the loan to a lender at closing? - ANS-Table funding What law protects homeowners from foreclosure-prevention scams? - ANS-Mortgage Assistance Relief Services Rule Individuals must file a report when they transport how much cash out the country? - ANS-10,000 or more What type of federal report is filed when financial institutions detect suspicious activity?
- ANS-suspicious activity report Which law requires businesses to print only the last five card numbers in a credit card receipt? - ANS-FACT Act What happens if the acceptable variance between the Loan Estimate and the closing disclosure is exceeded? - ANS-The excess is refunded t the borrower within 60 days A hihoe loan is one that has: - ANS-APR exceeds the average prime rate by at least: 1.5% for first-lien mortgage 2.5% for a first lien Jumbo loan, or 3.5% for a subordinate mortgage lien What is the shortest time in which a mortgage purchase loan can close? - ANS- business days What type of mortgage is a non-recourse loan? - ANS-Reverse mortgage A lender that offers mortgage loans directly to the public is a: - ANS-Retail Lender
Who does Fannie Mae hold responsible for the quality of an appraisal? - ANS-Lender Which law prohibits discrimination by lenders when extending credit? - ANS-Equal Credit Opportunity Act A property sold for $200,000 and was appraised at $180,000. The borrower received a loan for $150,000. What is the loan-to-value? - ANS-83.3% How many days does a lender have to send an adverse action notice? - ANS- The enforcement of a lien is known as a: - ANS-Foreclosure What minimum percentage of ownership qualifies an individual as self-employed? - ANS-25% Which law defines the right of rescission? - ANS-TILA How long after the application date must social security payments continue to be received in order to count as income? - ANS-3 years Which clause in a mortgage allows a lender to increase the interest rate? - ANS- escalation A VA appraisal is known as a: - ANS-CRV or NOV Which type of loans are meant for rural areas? - ANS-USDA-Section 502 The purchase price of a home is $200,000 and the loan amount is $180,000. The borrower pays 6% interest with 1 discount point and 1 origination point. What is the cost of the points? - ANS-$3, What is the maximum allowable amount of VA seller concessions? - ANS-4% The late fee for a VA loan is: - ANS-4% of principal and interest What is the clause in a mortgage that is also known as a "due on sale clause"? - ANS- Alienation Alimony payments must continue to be received for how long after the application date if they are to be included as income? - ANS-3 years Credit reports are good for how many days after they are pulled for qualifying purposes?
Which law protects an individual's confidential information? - ANS-Gramm-Leach-Bliley Act The Mortgage Servicing Disclosure must be sent to the borrower within how many business days of receiving a loan application? - ANS- After an escrow account analysis, money must be refunded if the over-paid amount equals or exceeds: - ANS-$ The maximum escrow cushion that a lender can request is: - ANS-Equal to 2 months (1/6) The fluctuating economic indicator used in an ARM is the? - ANS-INDEX The Home Mortgage Disclosure Act (HMDA) was implemented by the: - ANS-Federal Reserve Board Tax liens can be kept in the credit report for: - ANS-7 years The range of possible credit score is: - ANS-300- The Red Flags Rule is concerned with: - ANS-Identity Theft For how many years must a lender retain the Loan Estimate? - ANS- For how many years must a lender retain the Closing Disclosure? - ANS- For how many years must a lender retain the Escrow Cancellation Notice? - ANS- For how many years must a lender retain the Partial Payment Policy? - ANS- The mortgagor is the: - ANS-Borrower Which law (regulations) is designed to create financial stability? - ANS-The Dodd Frank Act Mortgages are a(n): - ANS-Voluntary lien What establishes the lien position? - ANS-date and time of recording What type of mortgage has a fixed interest rate and increasing payments? - ANS- Growing equity mortgage A graduated payment mortgage: - ANS-Has payments that start low and increase over time
What type of funding occurs when a lender obtains funds from a line of credit at a commercial bank? - ANS-Warehouse funding The late fee for FHA and VA loans is: - ANS-4% When a lender sells a mortgage loan to another lender this is called? - ANS-Assignment of mortgage What type of mortgage fraud scam occurs when a buyer borrowers the down payment from seller without the lenders knowledge? - ANS-Silent Second What can result in a $1,000,000 fine and 30 years in prison? - ANS-Acts of mortgage fraud After loan servicing is transferred, the new servicer cannot asses late fees for a period of __________ if the payment is made to the previous lender by mistake: - ANS- days Monthly PITI payments are $1,400 and the borrower's gross monthly income is $5,000. His other debts are $200 a month. What is the Housing Expense Ratio? - ANS-28% ($1,400 divided by $5,000) What type of property is NOT covered by RESPA? - ANS-All cash sales, rental units of more than 4, property 25 acres or more & commercial property A lender/Servicer can contact a borrower how many days after a missed payment? - ANS-36 days A lender/servicer must inform the borrower of the available loss mitigation options after __________days of missed payments? - ANS-36 days Which regulation allows the borrower to sue for "treble" damages? - ANS-RESPA Section 9 What law requires the lender to provide an annual summary of the activity associated with the borrower's impound account? - ANS-RESPA section 10 The servicing transfer statement must be provided to the borrower ___________prior to transfer. - ANS-15 days What are the 6 items that make a "complete" Application? - ANS-Borrower name, Social Security Number, Subject Property address, Borrower's monthly income, estimated value amount, and the loan amount. The "Know Before You Owe" disclosure must be provided within ______days of a complete application? - ANS-3 days
The "Know Before You Owe" disclosure must be provided for what type of transactions?
- ANS-Purchase Only If the application is withdrawn within the first _______days or the lender declines the application within the first ________days, the lender is NOT required to provide the _______to the borrowers. - ANS-3,3, initial disclosure __________ occurs if the lender chooses the hazard insurance company when the borrower allows the policy to lapse. - ANS-Forced-placed insurance Which items have a zero tolerance between the Loan Estimate and the Closing Disclosure? - ANS-Real estate transfer taxes, loan origination fees, interest rates, appraisal and credit report Which items have a 10% tolerance between the Loan Estimate and the Closing Disclosure? - ANS-Government recording fees, title insurance On what document would you find information regarding the "RATE LOCK"? - ANS-The LOAN ESTIMATE ONLY What is the penalty for violating RESPA? - ANS-$10,000 and 1 year in jail Which regulation is Reg Z? - ANS-TILA Which disclosure requires that entities that purchase or acquire mortgage loans to notify the borrower and provide the name, address and telephone number of the owner within 30 days of acquisition? - ANS-Transfer of Ownership Disclosure The total "interest" being charged on the loan, expressed as a percentages is known as the _______________? - ANS-Total Interest Percentage (TIP) If a borrower was not properly notified of his/her right to rescind, how long can the rescission period be extended? - ANS-3 years How many copies of the "Right of Rescind" must each borrower receive? - ANS-two What law requires that the borrower receive the Right of Recession notice? - ANS-TILA What does APOR stand for? - ANS-Average Prime Offer Rate When is a loan considered a Section 32 (High Cost) Loan? - ANS-A loan will be considered a High Cost (section 32) loan if its APR exceeds the APOR by more than 6.5% for a first lien or 8.5% for a subordination lien, or when the total points and fees payable in conjunctions with the loan exceed 5% (8% for loans of $20,000 or less)
