Mortgage Cards

Front 1

What is the lowest down payment on conventional loan?

Back 1

5%

Front 2

What is the required down payment for FHA loan?

Back 2

3.5%

Front 3

What is downpayment on VA loan

Back 3

0% no down payment is required.

Front 4

SAFE Act

Back 4

Secure And Fair Enforcement for Mortgage Licensing Act of 2008

Front 5

Law required Licensing of all Mortgage Lenders, Mortgage Brokers and the MLO's that work for them

Back 5

SAFE Act

Front 6

CE requires how many hours of Ethics?

Back 6

Two

Front 7

How long is the waiting period for a person who seeks to license as an MLO if a prior felony was pardoned?
a.) 1 yr
b. ) 7yrs
c.) 20 yrs
d.) no waiting period

Back 7

no waiting period

Front 8

NMLS was created and is owned by

Back 8

SRR (State Regulatory Registry)

Front 9

CSBS

Back 9

Conference of State Bank Supervisors

Front 10

AARMR

Back 10

American Association Of Residential Mortgage Regulators

Front 11

Contract Processors and UW who do not work for a bank or licensed entity and serve only in a contract basis must take the 20 hrs and license as an MLO

Back 11

True

Front 12

Which of the following would need a license as a mortgage loan originator?
a.) Closing supervisor in mortgage lender operation
b.) A Processor or UW that works for a bank
c.) a processor or UW that works directly with a lender as an independent contract employee
d.) an owner of a Mortgage Company

Back 12

C. a processor or UW that works directly with a lender as an independent contract employee

Front 13

Processors and UW who are employed by licensed or exempt entities are exempt from licensing and are allowed to perform (after the application is taken) Clerical and Support duties

Back 13

True

Front 14

NMLS approves or deny applications for licenses

Back 14

False, NMLS applications only process applications for the states

Front 15

Licensed MLO's may only work for _____ company

Back 15

Licensed MLO's may only work for 1 company

Front 16

Licensed MLO gets ____ hours CE Credit for every 1 hour teaching an NMLS approved course teaching approved course

Back 16

Licensed MLO gets 2 hours of credit

Front 17

MLO is someone who takes mortgage applications or negotiates rates and terms with borrowers

Back 17

True

Front 18

FHA

Back 18

Federal Housing Administration - its a division of HUD

Front 19

HUD

Back 19

US Department of Housing and Urban Development

Front 20

Government Sponsored Enterprise

Back 20

GSE

Front 21

FNMA (FannieMae)

Back 21

Federal National Mortgage Association

Front 22

Mortgage is the pledge of collateral to secure the loan

Back 22

True

Front 23

A NOTE is the promise to repay a debt

Back 23

True

Front 24

FHLMC (FreddieMac)

Back 24

Federal Home Loan Mortgage Corporation

Front 25

GNMA (GinnieMae)

Back 25

Government National Mortgage Association

Front 26

FNMA & FHLMC were created by ______________________?

Back 26

Created by Congress to keep the mortgage markets liquid by PURCHASING conventional conforming loans ( 1st mortgage only) from the banks and lenders who make them. Both are part of the Secondary Market

Front 27

GNMA (GinnieMae) purchases all _________________loans

Back 27

all the Government loans - FHA, VA, USDA

Front 28

FNMA/FHLMC - “___________” Loans

Back 28

FNMA/FHLMC - “Purchases” Loans (Conventional Conforming 1st mortgage loans)

Front 29

FHA - " _________" loans

Back 29

FHA - " Insures" loans

Front 30

VA and USDA - “___________” Loans

Back 30

VA and USDA - “Guarantees” Loans

Front 31

Primary market is where loans are originated

Back 31

MLO's , Brokers, Lenders, Banks

Front 32

Secondary market is where loans are sold

Back 32

GNMA, FNMA, FHLMC

Front 33

Encumbrance

Back 33

a claim against a property that is held by someone who is not the legal owner.

> Easement (utility)
> Public and Private Restrictions ( sidewalk)

Front 34

If a neighbors tree is leaning over the property line, is it considered encroachment?

Back 34

Yes

Front 35

Mortgagor/ Trustor = ____________

Back 35

BORROWER

Mortgagor/ Trustor = Borrower

Front 36

Mortgagee / Trustee = _____________

Back 36

LENDER

Mortgagee / Trustee = Lender

Front 37

A ____________ is considered a Financial Encumbrance/ Lien

Back 37

MORTGAGE

A mortgage is considered a Financial Encumbrance/ Lien

Front 38

Conveyance

Back 38

You convey title when you transfer title from owner to owner

Front 39

Reconveyance

Back 39

When the borrower pays off the loan the lender must RECONVEY the property to the borrower (satisfaction of mortgage would cause this)

Front 40

In a Lien State, the deed stays with the borrower (mortgagor), and the lender (mortgagee) places a lien on the property using the mortgage instrument

Back 40

TRUE

Indiana Is a Lien State

Front 41

A COMPLETE financing agreement and sales contract in one executed document

Back 41

Contract For Deed

Front 42

This is an agreement you make with the lender to keep the loan for a set period of time or face a penalty for early payoff thru sale or refinance

Back 42

Prepayment Penalty


2 types
1.) Hard Prepayment Penalty - set time frame, the property if sold or refinanced during this time frame, would allow the lender to charge a set penalty
2.) Soft Prepayment Penalty - cannot refinance without penalty but you may sell

Front 43

Due on Sale / Demand Feature

Back 43

if you sell your property, you must payoff any outstanding debt

Front 44

Part of an agreement that relieves one party from the contract

Back 44

Exculpatory Clause

Front 45

Defeasance Clause

Back 45

If a borrower defaults on a loan, the defeasance clause allows the lender to take the property without foreclosure

Front 46

Liens: First in time _____________in line

Back 46

First in time is first in line

Taxes take priority over any lien

Front 47

Conforming Loans are always Conventional, however Conventional Loans are not always Conforming

Back 47

Jumbo loans are non Conforming

Front 48

Which of the following best describes a 2nd mortgage?
a. a conventional mortgage that is conforming
b. a conventional mortgage that is non conforming
c. a conforming loan that is non conventional
d. a non conforming loan that is non conventional

Back 48

B

a 2nd mortgage is a conventional mortgage that is non conforming

Front 49

Conforming loans have a limit of $___________

Back 49

Conforming loans have a limit of $417,000

Front 50

The SAFE ACT defines a NON Traditional Loan as anything other than __________.

Back 50

The SAFE ACT defines a NON Traditional Loan as anything other than a 30 yr fixed rate loan.

Front 51

Features of a Conforming Loan

Back 51

> Always conventional financing
> 1003 - Uniform Residential Loan Application (URLA)
> 1008 - Underwriting and Transmittal Summary
> 5% down
> Qualifying Ratios - Manual Underwriting 28/36%

Front 52

Form 1003

Back 52

Uniform Residential Loan Application (URLA)

Front 53

Form 1008

Back 53

Underwriting and Transmittal Summary

Front 54

Form 4506T

Back 54

Request for a copy of a tax transcript

Front 55

FHA

Back 55

Federal Housing Administration

Front 56

- 2 types of Mortgage Insurance that are charged on an _________ loan
1.) UFMIP - Up Front Mortgage Insurance Premium
And
2.) (Annual) Monthly MIP

Back 56

FHA

Front 57

How long does MIP stay on an FHA loan with a term of 30 or 15 years greater than 90% LTV?

Back 57

MIP is now Lifetime

Front 58

How long does MIP stay on an FHA loan with a term of 30 or 15 years greater at 90% LTV?

Back 58

11 Years

Front 59

Can gift money be used for FHA load

Back 59

Yes

Front 60

What is the qualification ratio of FHA loan?

Back 60

Qualifying Ratios are 31%/43%

Front 61

VA Loans are made by lenders and guaranteed by the VA

Back 61

True

Front 62

COE

Back 62

Certificate of Eligibility

Front 63

IRRRL

Back 63

Interest rate reduction refinance loan

Front 64

VA loans can finance 100% the value of the home

Back 64

TRUE

Front 65

What is the qualifying ratio of VA load

Back 65

41%

Front 66

What is the maximum loan value of VA loan

Back 66

4 times the value of COE

Front 67

USDA Loans are only offered as a 30 year fixed rate

Back 67

True

Front 68

LTV maximun on USDA loan is _________%

Back 68

The maximum LTV is 102%

Front 69

LIBOR

Back 69

LIBOR -London Interbank Offered Rate

Front 70

COFI

Back 70

COFI - Cost of Funds Index

Front 71

5/1 ARM

Back 71

( 5) is number of years fixed
(1) Adjusts annually

Front 72

Caps: 2/6

Back 72

(2) Represents how much the loan can adjust in any adjustment period
(6) Represents how much the loan may adjust over its life (max)

Front 73

Caps: 2/1/6

Back 73

(2) Represents the first adjustment max
(1) Represents all other adjustment periods
(6) max adjustment over term of loan

Front 74

What is the shortest term for a balloon?

Back 74

5yrs

Front 75

Balloon Mortgages are loans that do not fully amortize.

Back 75

True

Front 76

Ballon loan product such as a 30/15

Back 76

> term of the loan is 15 years
> the payment is based on 30 years

Front 77

Home Equity Conversion Mortgage

Back 77

HECM - Home Equity Conversion Mortgage

Front 78

HECM characteristics

Back 78

> NO credit requirements are or income are required to get this loan
> Must be 62 yrs or older
> LTV is based on your age - the older you are the higher the LTV

Front 79

HELOC

Back 79

Home Equity Line of Credit

Front 80

What is the borrower of a HECM loan required to pay?
A. Principal
B. Interest
C. Mortgage Insurance
D. HOA and Real Estate Taxes (and Insurance)

Back 80

D. HOA and Real Estate Taxes (and Insurance)

Front 81

A Construction loan requires payment of:
a.) Interest only
b.) P and I
c.) PITI
d.) Monthly admin fee

Back 81

a.) Interest only

Front 82

An Appraiser must visit the property and complete a form 442 (FHLMC) or a 1004D (FNMA) to certify construction is complete

Back 82

True

Front 83

POC

Back 83

Paid Outside of Closing (credit report, appraisal fee)

Front 84

PFC

Back 84

Prepaid Finance Charge (discount points)

Front 85

Mortgagee Clause

Back 85

Lender must be added to the insurance policy as the "LOSS PAYEE"

Front 86

Private Mortgage Insurance - Required on Conforming loans over _______%

Back 86

Private Mortgage Insurance - Required on Conforming loans over 80%
- Automatically drops off at 78% LTV or 22% equity position as required by Homeowners Protection Act ( HPA )

Front 87

Title Insurance

Back 87

Protects from financial loss due to defects on title to real property and from unenforceability of mortgage liens or other types of liens

Front 88

Flood Zones A and V require flood insurance

Back 88

True

Front 89

What amount does Flood Insurance Cover?
a.) 80% of dwelling
b.) value of dwelling minus value of land
c.) value of dwelling plus land
d.) 100% of dwelling

Back 89

d.) 100% of dwelling

Front 90

What is the minimum amount of flood insurance coverage required?
a.) 90% of structure
b.) 80% of structure
c.) 85% of structure
d.) 95% of structure

Back 90

b.) 80% of structure

Front 91

You may refer to the borrower as all of the following except?
> Married
> Separated
> Divorced
> Unmarried

Back 91

Divorced **** also cannot say single or widowed

Front 92

What information is collected in the assets and liability section of 1003 form?

Back 92

Name of creditor/ monthly payment/ unpaid balance

Front 93

What is the significance of having the MLO sign the last page of the 1003?

Back 93

> attest to the truthfulness of the document ( borrower attests)
> express how the application was taken and who the MLO is employed by?

Front 94

Government Monitoring Information is collected in Section 10 (X) of 1003 and required by HMDA

Back 94

Ethnicity, Race and Sex

Front 95

URAR

Back 95

URAR - Uniform Residential Appraisal Report

Front 96

Which of these methods is NOT used by Appraisers for determining value:

1.) Sales Comparison Approach (Most common) aka Market Data/Analysis Approach
2.) Income Approach - typically used for investment or commercial
3.) Cost Approach - usually used for new construction
4.) MLS Approach is not a valid appraisal approach

Back 96

4. MLS Approach is not a valid appraisal approach

Front 97

The market conditions addendum required in conjunction with the appraisal report lists all of the following information except?
a.) number of foreclosure in the market
b.) seller concessions
c.) current inventory of homes for sale
d.) description of improvements to property

Back 97

d.) description of improvements to property

Front 98

Credit Reporting Agencies

Back 98

CRA
- there are 3
1.) Experian
2.) Trans Union
3.) Equifax

Front 99

All of the following would be found in a credit report except?
a.) Judgments
b.) Collections
c.) tax liens / foreclosures
d.) utility records

Back 99

d.) utility records

Front 100

Public records stay on a credit report for about 7 years with the exception of Bankruptcies Chapter 7’s stay on for 10 years

Back 100

True

Front 101

How long does chapter 11 stay on a credit report?
A. 7 years
B. 10 years
C. Until it is discharged
D. Chapter 11

Back 101

D. Chapter 11 is not reported on credit reports****

Front 102

Credit Score - range from 300 -850

Back 102

yes

Front 103

Which of the following types of income cannot be used or is reason to decline an applicant for a mortgage?
A. Annuity
B Part time income
C. Social security and or public income source
D. Intermittent or seasonal income

Back 103

D. Intermittent or seasonal income

Front 104

You must provide tax returns for the business if you own more than ______% of the business.

Back 104

You must provide tax returns for the business if you own more than 25% of the business.

Front 105

3 C's of Underwriting are

Back 105

Credit
Collateral
Capacity

Front 106

Another term for a Junior Lien is?

Back 106

Subordinate

Front 107

Modification

Back 107

Permanent change in the terms of a loan

Front 108

Forbearance

Back 108

Temporary agreement where the borrower pays a reduced amount while also paying past due amount

Front 109

Which gets paid first? - place in order -
interest
principle
past due

Back 109

Past Due, Interest, Principle

Front 110

Ratios

Back 110

FHA Guidelines 31%/43%
VA Only has back end - 41%
FNMA/ FHLMC 28%/36%

Front 111

When dealing with purchases you must use the purchase price or appraised value - whichever is less

Back 111

True

Front 112

LTV

Back 112

Loan To Value

Front 113

CLTV

Back 113

CLTV - Combined Loan To Value

Front 114

TLTV

Back 114

TLTV - total loan to value
Comes into play when a borrower has a HELOC with a high credit limit that is not being fully utilized - in other words - what is worst case scenario if he maxed his HELOC?