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50 Cards in this Set
- Front
- Back
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Originating lenders often sell their loans in the secondary market. In some cases the originating lender may be required to buy back the loan. this might be due to ? |
Terms of a buyback agreement. |
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A large insurance agency, which does a high volume business in the area, holds a dinner party for the top producing mortgage loan originators in the area. The brokers of the various mortgage companies each speak at the dinner party and encourage their respective originators to send businss to the insurance agency. Is there a RESPA violation here and if so, who is in violation? |
Yes, the insurance agency and the mortgage brokers are in violation |
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When applying for a loan, the applicant will usually be asked to provide IRS tax returns as well as W-2 forms for how many years? |
2 years |
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Appraisers use recently sold comparable properties in the area when preparing a residential appraisal. Comforming guidelines permit the appraiser to make net adjustments to the comparable up to _____ in the residential appraisal? |
15 % of the sales price, and the gross adjustments cannot exceed 25%. A single adjustment can't exceed 10% |
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Would the purchase of a new home require the distribution of the booklet "Buying Your Home Settlement Costs and Helpful Information"? |
Yes |
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If interest rates are rising what should you advise a borrower regarding an ARM? |
It represents greater risk to the borrower |
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The Gramm-Leach-Bliley Act ( GLBA ) is also known as? |
The Financial Modernization Act |
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A loan applicant has four young children and the lender feels that if the children should become ill it might jeporadize the loan repayment. Is This a valid reason to deny the loan? |
No, familial status may never be considered in a credit decision. |
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FHA loan limits are based on? |
Housing costs in a given geographic area |
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If you take an application my phone, it is important that you be cognizant of your obligation to do what? |
Either mail or hand deliver the GFE and the TIL Disclosure with 3 days |
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An interest only ARM is an adjustable rate mortgage that permits the borrower to pay only the interest for a certain period of time. Typically that period is? |
3 to 10 years |
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What term best describes Fannie Mae and Freddie Mac? |
GSE's ( Government Sponsored Enterprises) |
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What represents the primary advantage of a reverse mortgage? |
No payments and no income requirements |
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Section 8 of RESPA provides kickbacks and illegal referral fees. Violators of this section are subject to which penalty? |
A fine of up to $10,000 and up one year in prison |
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When a loan exceeds the limits established by Fannie mae and Freddie Mac, it is usually referred to as what? |
Non conforming loan |
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The terms TILA and Reg Z are closely associated with? |
CCPA ( Consumer Credit Protection Act ) |
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The Good Faith Estimate ( GFE ) and the HUD-1 are both disclosures of settlement costs. What best describes the difference between the two? |
The HUD-1 is a statement of actual settlement costs, while the GFE is only an estimate. |
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Disclosures may be made in languages other than English providing? |
They are also available in English |
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The term "flipping" refers to? |
The purchase and re-sale of a property in a short period of time |
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What would have the greatest negative effect on a credit history when being reviewed for a mortgage loan? |
Foreclosure |
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The charging of excessive prepayment penalties could be considered to be? |
Predatory lending |
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When an appliant is turned down, the Notice of Adverse Action must be provided within ____ advising the applicant that they did not qualify for the loan ? |
30 days of loan application |
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If a veteran secures a VA loan he must agree to? |
Occupy the property within 60 days after closing of the transaction |
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The regulations established by RESPA are applicable to? |
One to four unit family residences |
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The cushion in an escrow account can be up to ? |
2 months |
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Submitting false information on a federally related mortgage loan can be costly because it could result in ? |
Fine up to $1,000,000 and 30 years in prision |
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After working with a potential borrower, a mortgage broker decides to refer the borrower to another broker, who might be able to assist the borrower. The second broker pays the referring broker $250 for the referral. Who is in violation of Section 8 of RESPA? |
Both brokers are in violation of Section 8 of RESPA. |
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Regulation B |
Prohibits discrimination in credit transactions |
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Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provisions for an amount equal to ? |
Three times all charges made for the title insurance |
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Does RESPA set the maximum origination fees on a loan? |
NO |
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The cost of the loan expressed in Annual Percentage Rate ( APR ) would be found on which document? |
TIL Disclosure |
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Unscrupulous mortgage professional have been known to base a loan approval only on the appraised value of the property used for collateral, and to not take into consideration the borrower's inability to repay the loan. This is known as? |
Equity stripping |
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Which of the following information about a loan applicant would NOT be recorded on a form 1003? |
Credit Score |
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Who permits a 1/8 percent error in the APR in a fixed rate transaction? |
TILA |
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Margin rates are usually constant for the term of the loan? |
True |
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In an ARM the lower initial introductory interest rate is also called the _____ rate? |
Note |
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Regulations regarding " advertising triggers" are the result of? |
Reg Z |
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Sterring or channeling is a term that refers to ? |
Suggesting that prospective buyers should consider a different area in which to buy |
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What controls the setting of the "prime rate"? |
The Market |
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A property has been purchased at a low price than a fake appraisal is generated and the property resold in a short period of time for a much higher price. What is this called? |
Illegal flipping |
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You have recently taken a loan application and verified the credit score froma potential borrower. As the mortgage broker, the Equal Credit Opportunity Act ( ECOA ) requires you to contact the applicant and advise him of the status of his application within what period of time? |
30 days ( A Notice of Action) also, if credit is denied a Notice of Adverse Action must also be filed. |
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Titles, such as Mr or Ms., may be requested on a title, but only if the form indicates that? |
The information is optional |
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A title company pay a mortgage loan orignator $50 for each client referred for settlement business. Is this a violation of Section 8 of RESPA? |
Yes |
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Many nontraditional mortgage products result in eventual "payment shock" for consumers. To help prevent this, loan providers should try for? |
A narrow initial spread in the interest rates |
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What is closely associated with Morgage Backed Securities ( MBS)? |
The secondary market |
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What does the term "margin" refer to? |
In an ARM it is the amount above the index that the interest rate can be adjusted |
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In general, the most common form of mortgage fraud involves? |
Loan documentation |
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What does the acronym PFC stand for? |
Prepaid finance charge |
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Under common law, the simplest form of real property ownership is? |
Fee Simple |
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What is LIBOR? |
The London Interbank Offered Rate ( LIBOR) |
