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71 Cards in this Set
- Front
- Back
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What is the maximumCOE on a VA loan, expressed in a dollar amount?
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$36,000.
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What is the maximumorigination fee that can be charged to a veteran on a va loan?
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1% |
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What is the front andback-end ratio for a USDA loan?
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29%/41% |
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What is the maximumLTV for a USDA loan and what is the maximum LTV if a funding fee is financed?
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100%/102%.
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What is the fundingfee on a USDA loan?
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2%.
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What is the only termfor a USDA loan?
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30 years.
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Is there down paymenton a USDA loan?
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No.
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Which FNMA formnumber is known as the Transmittal Summary?
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1008. |
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What three items bestdescribes what a lender or underwriter should consider when making a creditdecision?
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Credit, Capacity, and Collateral.
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You may refer to aborrower as all of the following except: a) single; b) married; c) divorced; d)unmarried?
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C: Divorced.
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What percentage ofownership would not require a self-employed borrower to provide tax returns?
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Less than 25%. If itis 25% or over, tax returns must be provided.
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FEMA stands for?
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Federal EmergencyManagement Agency.
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Which form numberrepresents the Request for Copy of Tax Transcripts?
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4506T.
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How many days does aseller have to wait to sell a home for profit if the new homebuyer is using aFNMA loan product?
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Right away, zerodays.
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Which of thefollowing do not affect the VA funding fee? Marital status, Down payment, ordisability?
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Marital status.
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What does POC standfor?
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Paid outside ofclosing. |
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What does PFC standfor?
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Pre-paid finance charge.
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What does GNMA standfor?
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Gov’t NationalMortgage Association.
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What does FNMA standfor?
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Federal NationalMortgage Association.
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What does FHLMC standfor?
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Federal Home LoanMortgage Corporation.
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Law: RESPA What is the Reg Letter, Oversite committee, and Purpose associated with this law? |
Real EstateSettlement Procedures Act Reg Letter: X ("Xray for RESParatory system")Oversite: CFPB Purpose: ProtectHomeowners Mortgage Loans (1-4 fam, condo, manufactured on lot); Makes EscrowRules; Sect 8 prohibits referrals Record Keeping: 5 yrs (ABA, Servicing Disc,HUD1) Fines: Violating Sec 8 = 10K, and/or 1 yr prison |
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Law: TILA What is the Reg Letter, Oversite committee, and Purpose associated with this law? |
Truth in Lending Act Reg Letter: Z ("Today I Learned About Zebras") Oversite: CFPB unless advertising, then FTC Prupose: Disclose costs (APR, Fin Charge, etc); Disclose key elements of lending transaction; .125 mx variance fixed/.25 on ARM Record Keeping: 2 yrs Fines: 5k for understating APR or willful violation |
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Law: ECOA What is the Reg Letter, Oversite committee, and Purpose associated with this law? |
Equal Credit Opportunity Act Reg Letter: B ("B Equal") Oversite: CFPB Purpose: Keep lenders from discriminating against - Protected classes, Equal access to credit, Notice of adverse action w/n 30 days Record Keeping: 25 mons |
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Law: HMDA What is the Reg Letter, Oversite committee, and Purpose associated with this law? |
Home Mortgage Disclosure Act Reg Letter: C ("C you at Home") Oversite: Reported to HUD annually, disposition of applications on LAR Purpose: Stop Redlining Record Keeping: 3 yrs |
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Law: FCRA What is the Reg Letter & Purpose associated with this law? |
Fair Credit Reporting Act Reg Letter: V ("Vanity FAIR") CRA is mainly responsible for protecting who has access to credit Creditors must have permissible purpose |
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LAW: FACTA What is the Purpose associated with this law? |
Fair and Accurate Credit Transactions Act Purpose: an Amended FCRA developed to curb identity theft and improve customer dispute resolution. Disclosures associated w/ FACTA: Credit Score (upfront) & Negative Info (30 days) |
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Law: TCPA What is the Oversite committee, and Purpose associated with this law? |
TelephoneConsumer Protection Act Oversite: FTC (FTC has oversight of compliance with Red Flags - must have a written plan) TCPA specifically is to stop harassing TM calls DO Not Call Registry (which once registered is good forever) Record Keeping: 2 yrs Fines: 16k |
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Law: USA Patriot Act What is the Oversite committee, and Purpose associated with this law? |
Financial Crimes enforcement network Oversite: FinCEN (part of Treasury Dept) Purpose: Stop terrorist funding - Have CIP in place Record Keeping: 5 yrs Fines: $1m |
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Which is notan example of fraud? a. shotgunning b. strawbuyer c- stated loans d- silentseconds |
c- statedloans ***** |
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Which of the following could be an indication ofpossible fraud on an application for an owner occupied purchase transaction? a.)The applicants currently live with their parents b.)The applicants currently own & live in a prop.in the same neighborhood as the property for the loan c.)The property is out of state d.)There are 4 applicants on the application |
b.)The applicants currently own & live in a property in the same neighborhood as the property for the loan ****
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MLO went ona vacation & had her LOA meet with her client. When the MLO came back it wasfound that the LOA was signing documents as the MLO, turns out this practicewas happening often & with MLO’s permission. What should be done? a.) Terminatethe LO b.)TerminateLOA c.)Report toauthorities d.)Terminateboth |
d.)Terminateboth **** If you chose: c.)Report toauthorities Remember that it will STILL be reported when you terminate them |
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What actionshould an MLO take if during a refinance involving a mother and son the MLOgets the feeling the mother is hesitant about the refinance? a.) Ignorethe situation as it may be a family matter b.) Pull themother aside to discuss c.) Referthe transaction to the AML department d.) Pull theson aside to discuss |
a.) Ignore the situation as it may be a family matter *****
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A young couple is applying for a loan for anew home purchase. A portion of theirdown payment is a loan from a Grandparent for $25k. The money wasalready given to them & placed in their account 3 months prior to theloan app. The loan paymentswon't start for 1 yr, how should the $25k be reported on the mortgageapplication? a>Asset, b>Liability, c>Gift of Funds, d>Not reported at all |
B. ALiability ****** (The key word is "loan") |
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An MLO takesan application and becomes suspicious of the applicants Soc Sec. #; what should the MLO do? (A) contactthe police (B) denyloan (C) call socsec admin and verify Soc Sec # (D) wait tosee if there is anymore suspicious activity |
(D) wait to see if there is anymore suspicious activity*****
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Which of thefollowing is a risk associated with a nontraditional ARM? a.) theinclusion of a prepayment penalty b.) paymentshock when amortizing begins c.)additional costs associated with reduced document loans d.) all ofthe above |
d.) all of the above ******************
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When can afee be charged for a loan modification? A. At application B. When the modification is complete C. Oncecontact is made with Lender D. Once theDisclosure form is signed |
B. When the modification is complete ****
**** other instance would be if you are a licensed attorney in that state and are accepting fees for preparing or filing documents in bankruptcy, court, or administrative proceedings; YOU CAN NOT CHARGE THE FEE UPFRONT |
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When is itokay to ask someone their religion? a.)Never b.) Never,unless your a non profit c.) Always,unless it is used to deny credit d.) Always |
a.) Never******
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What is the function of Section 8 of RESPA? |
Section 8 ofRESPA prohibits anyone from giving or accepting anything of value for thereferral of a mortgage loan or settlement services. (Kickbacks & Unearned Fees) |
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What is the function of disclosing the GFE or Good Faith Estimate? |
This document accomplishes the purpose of RESPA that pertains to educating borrowers of all the closing costs associated with the loan: Must be provided w/n 3 bus days of app You must guarantee your closing costs for the B for 10days You must guarantee your rate for a period of time (most lenders use the same day w/ an actual time of day)
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Which of the following APR's (on your loan)would trigger HOEPA if the current APOR is 4.25% on a 1st mortgage loan of $200,000?
a.) 6% b.) 10.5% c.) 8% d.) 11% |
d.) 11% *****
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Which of thefollowing is not considered when evaluating the Ability to Repay? a.) PropertyValue b.) Alimony c.) ChildSupport d.) Parttime income |
a.) Property Value ****
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The 3 C's ofUnderwriting are:
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Credit Collateral Capacity - Best defined as a borrower’s ability to repay the loan |
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Which of thefollowing types of income cannot be used or is reason to decline an applicantfor a mortgage? A. Annuity B Part time income last 24 months C. Social security and or public income source D. Intermittent or seasonal income |
D. Intermittent or seasonal income ******
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How longdoes chapter 11 Bankruptcy stay on a credit report? A. 7 years B. 10years C. Chapter11 is not reported on credit reports D. Until itis discharged |
C. Chapter 11 is not reported on credit reports ****** |
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All of thefollowing would be found in a credit report except? a.)Judgments b.)Collections c.) taxliens / foreclosures d.) utilityrecords |
d.) utility records *********
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3 types ofCredit Reports |
1.) In file report - one repository 2.) tri merged - all three repositories on one report 3.) factual data report ( RMCR) Tri-merged is the most popular |
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The marketconditions addendum required in conjunction with the appraisal report lists allof the following information except? a.) numberof foreclosure in the market b.) sellerconcessions c.) currentinventory of homes for sale d.)description of improvements to property |
d.) description of improvements to property *****
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Fannie Mae Transmittal Summary
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1008
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3 types ofAppraisals for determining value:
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1.) Sales Comparison Approach (Most common) aka Market Data/Analysis Approach 2.) Cost Approach - usually used for new construction 3.) Income Approach - typically used for investment or commercial |
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If an MLOstarts an application and then leaves employment causing the lender to reassign to a different MLO. What should thenew MLO do? a.) verifythe information is correct by telephone b.) verifythe information via email c.) start anew application d.) continuewith the old application |
c.) start a new application ******
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You mayrefer to the borrower as all of the following except? > Married >Separated >Single >Unmarried |
>Single **** also cannot say divorced or widowed ( falls under unmarried)
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What 3 pieces of information do NOT have to be provided by the B on their application?
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CLAP CLAPCLAP Ethnicity,Race, Sex
Part of Section 10 "X"
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What is the minimumamount of flood insurance required? a.) 80% b.) 90% c.) 75% d.)95 |
a.) 80% *******
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What amountdoes Flood Insurance Cover? a.) 80% ofdwelling b.) value ofdwelling minus value of land c.) value ofdwelling plus land d.) 100% ofdwelling |
d.) 100% of dwelling ********
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What type ofloan cannot be required to be repurchased? a.) recourse b.) norecourse c.) Bid loan d.) No-bidloan |
d.) No-bid loan********
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What type ofloan has a rate of 5% for 5 years and a rate at 6% for the remaining 25years? |
Variable Rate
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AConstruction loan requires payment of: a.) Interestonly b.) P and I c.) PITI d.) Monthlyadmin fee |
a.) Interest only ******
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What is theborrower of a HECM loan required to pay? A. Principal B. Interest C. Mortgage Insurance D. HOA and Real Estate Taxes(andInsurance) |
D. HOA and Real Estate Taxes(and Insurance)*****
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M + I = R* * watch yourcaps!! |
Margin +Index = Rate |
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Which ofthe following best describes a 2nd mortgage? a. aconventional mortgage that is conforming b. aconventional mortgage that is non conforming c. aconforming loan that is non conventional d. a nonconforming loan that is non conventional |
b. a conventional mortgage that is non conforming*******
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What is a Reconveyance? |
when a borrower has a mortgage out with a lender - means they don't have free and clear rights to title. When the borrower pays off the loan the lender must RECONVEY the property to the borrower (satisfaction of mortgage would cause this)
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What is a Conveyance?
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You convey title when you transfer title from owner to owner |
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Mortgagee / Trustee
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Lender
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Mortgagor/ Trustor
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Borrower
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What are 3 examples of an encumbrance?
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An Encumbrance is a claimagainst a property that is held by someone who is not the legal owner. >Easement (utility) > Publicand Private Restrictions (sidewalk) >Encroachment: (fence or structure) |
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What's the difference between a Primary and Secondary Market?
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Primary market is whereloans are made (originated) ( ie: MLO's, Brokers, Lenders, Banks, etc.) Secondary market is whereloans are sold( GNMA, FNMA, FHLMC ) |
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Which of thefollowing Contract Processors/ UWs would need a mortgage originators license? a.) Closingsupervisor in mortgage lender operation b.) AProcessor or UW that works for a bank c.) aprocessor or UW that works directly with a lender as an independent contractemployee d.) an ownerof a Mortgage Company |
c.) a processor or UW that works directly with a lender as an independent contract employee *** |
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Howlong is the waiting period for a person who seeks to license as an MLO if aprior felony was pardoned? a.) 1 yr b. ) 7yrs c.) 20 yrs d.) nowaiting period |
d.) no waiting period *******
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3. Whichof the following would be grounds for denying a license? a.)convicted for reckless driving in prior 7 years b.)convicted for breach of trust within prior 15 years c.)convicted for homicide 20 years ago d.)convicted for speeding last month |
b.) convicted for breach of trust within prior 15 years *****
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Whattype of MLO must be licensed? A.) An MLOof a savings and loan B. ) An MLOof a commercial bank C. )Building and Loan Association MLO D. ) An MLOof a non-depository firm that arranges mortgages for clients |
D. ) An MLO of a non-depository firm that arranges mortgages for clients ***** Keep in mind, mortgage lenders make loans and mortgage brokers arrange loans.
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Whatbest defines a mortgage broker? a.) servesas an intermediary between a borrower and the actual lender b.) makesloans by funding from a warehouse line of credit c.) makesloans from own funds d.) servicerof mortgage loans for other investors |
a.) serves as an intermediary between a borrower and the actual lender ****
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