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28 Cards in this Set
- Front
- Back
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According to fair lending laws, age may be considered as a factor in denying a loan application if: |
The applicant is too young to enter into a contract The applicant is seeking a reverse mortgage and is 62 years old The applicant is too old to survive the term of the loan The applicant is too young to have accumulated savings and requires a gift from his or her parents in order to make a down payment The answer is the applicant is too young to enter into a contract. According to fair lending laws, age may be considered as a factor in denying a loan application if the applicant is too young to enter into a contract. |
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Securitization helps lenders to: |
Make more loans to lesser-qualified customers Increase the menu of products available to their customers Provide funds to the highest bidder on the secondary market Exchange active loans to another entity to generate new funds to make more loans The answer is exchange active loans to another entity to generate new funds to make more loans. The securitization process allows lenders to transfer active loans to another entity in exchange for funds to make more loans. |
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A _____ is an individual who accepts a fee to falsely claim ownership to a property. |
Straw buyer Air buyer Straw seller Air seller The answer is straw seller. A straw seller is an individual who accepts a fee to falsely claim ownership to a property. |
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This is the term for a charge paid by the borrower when repaying loan principal earlier than required by the amortization schedule |
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Acceleration Prepayment penalty Early termination fee Payoff penalty The answer is prepayment penalty. A prepayment penalty is a charge paid by the borrower when repaying loan principal earlier than required by the amortization schedule. |
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The Dodd-Frank Act listed the creation of financial education programs as one of the primary functions of: |
NMLS CFPB FHA HUD The answer is CFPB. The Dodd-Frank Act listed the creation of financial education programs as one of the primary functions of the CFPB |
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A _____ is defined as any mortgage product other than a 30-year fixed-rate mortgage |
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Piggyback loan Subordinate lien Nontraditional mortgage Nonconventional mortgage The answer is nontraditional mortgage. A nontraditional mortgage is defined as any mortgage product other than a 30-year fixed-rate mortgage. |
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Which of the following may be considered an appraisal red flag? |
An appraiser’s resume shows substantial experience in the area Property owner and seller are not the same Appraisal is dated after the sales contract Comparables are located within one mile of the subject The answer is property owner and seller are not the same. If the property owner and property seller are not the same, it is likely more questions should be asked about the deal. |
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An interest-only loan might be suitable for any of the following, except: |
A corporate executive who receives large quarterly bonuses A part-time hourly worker who may get overtime in the summer and plans to pay principal at that time An investor who would prefer to pay as little as possible while holding the property A self-employed borrower whose company is busiest during a six-month period over the holidays The answer is a part-time hourly worker who may get overtime in the summer and plans to pay principal at that time. An interest-only loan is suitable when a borrower is savvy enough to manage it properly. A part-time, hourly worker who “may” get overtime in the summer likely would not be the best candidate for an interest-only loan |
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Which government agency is responsible for policing and enforcing misleading advertisement for credit? |
HUD CFPB TILA Federal Reserve The answer is CFPB. The CFPB now has primary enforcement responsibility over TILA. The FTC does still retain some authority |
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Which government agency is responsible for policing and enforcing misleading advertisement for credit? |
HUD CFPB TILA Federal Reserve The answer is CFPB. The CFPB now has primary enforcement responsibility over TILA. The FTC does still retain some authority |
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All of the following requirements are applicable to HECMs, except: |
The loan must be secured by the borrower’s principal residence The applicant must complete a consumer information session on reverse mortgages loans The applicant must not have an existing mortgage on the residence The applicant must be at least 62 years old The answer is the applicant must not have an existing mortgage on the residence. HECMs include several requirements, including that the applicant must be at least 62 years old; the applicant must complete a consumer information session on reverse mortgage loans; and the loan must be secured by the borrower’s principal residence |
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Which government agency is responsible for policing and enforcing misleading advertisement for credit? |
HUD CFPB TILA Federal Reserve The answer is CFPB. The CFPB now has primary enforcement responsibility over TILA. The FTC does still retain some authority |
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All of the following requirements are applicable to HECMs, except: |
The loan must be secured by the borrower’s principal residence The applicant must complete a consumer information session on reverse mortgages loans The applicant must not have an existing mortgage on the residence The applicant must be at least 62 years old The answer is the applicant must not have an existing mortgage on the residence. HECMs include several requirements, including that the applicant must be at least 62 years old; the applicant must complete a consumer information session on reverse mortgage loans; and the loan must be secured by the borrower’s principal residence |
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Those who disagree with the idea of a fiduciary duty in mortgage loan transactions feel that _____ is ultimately responsible for ensuring that a certain loan product has appropriate terms and conditions. |
The mortgage broker The lender The consumer The underwriter The answer is the consumer. Those who disagree with the idea of a fiduciary duty in mortgage loan transactions feel that the consumer is ultimately responsible for ensuring that a certain loan product has appropriate terms and conditions |
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Which government agency is responsible for policing and enforcing misleading advertisement for credit? |
HUD CFPB TILA Federal Reserve The answer is CFPB. The CFPB now has primary enforcement responsibility over TILA. The FTC does still retain some authority |
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All of the following requirements are applicable to HECMs, except: |
The loan must be secured by the borrower’s principal residence The applicant must complete a consumer information session on reverse mortgages loans The applicant must not have an existing mortgage on the residence The applicant must be at least 62 years old The answer is the applicant must not have an existing mortgage on the residence. HECMs include several requirements, including that the applicant must be at least 62 years old; the applicant must complete a consumer information session on reverse mortgage loans; and the loan must be secured by the borrower’s principal residence |
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Those who disagree with the idea of a fiduciary duty in mortgage loan transactions feel that _____ is ultimately responsible for ensuring that a certain loan product has appropriate terms and conditions. |
The mortgage broker The lender The consumer The underwriter The answer is the consumer. Those who disagree with the idea of a fiduciary duty in mortgage loan transactions feel that the consumer is ultimately responsible for ensuring that a certain loan product has appropriate terms and conditions |
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When completing the Loan Estimate, costs must be presented |
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In dollars and cents In dollars and cents, except for appraisal costs By rounding them to the next whole number, except for estimated principal and interest payments By rounding them to the next whole number, except for third-party costs The answer is by rounding them to the next whole number, except for estimated principal and interest payments. Except for estimated principal and interest payments, costs on the Loan Estimate are rounded to the next whole number. |
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If a foreclosure proceeding has been initiated by a creditor, the borrower may exercise his/her three-year right to rescind if the finance charge for the loan was understated by |
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$35 $10 More than $35 More than $100 The answer is more than $35. If a foreclosure proceeding has been initiated by a creditor, the borrower may exercise his/her three-year right to rescind if the finance charge for the loan was understated by more than $35. |
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A mortgage and a lien are both examples of |
deeds of trust. concepts which are legal in some states but not in others. easements. encumbrances. The answer is encumbrances. An encumbrance is a claim or liability on the title to a property, such as a lien or a mortgage. |
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A mortgage and a lien are both examples of |
deeds of trust. concepts which are legal in some states but not in others. easements. encumbrances. The answer is encumbrances. An encumbrance is a claim or liability on the title to a property, such as a lien or a mortgage. |
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A first-lien mortgage loan will exceed the HOEPA APR threshold and qualify as a high-cost mortgage if its APR is |
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1.5 percentage points above the average prime offer rate for a comparable transaction 6.5 percentage points above the average prime offer rate for a comparable transaction 3 percentage points above the average prime offer rate for a comparable transaction 4.5 percentage points above the average prime offer rate for a comparable transaction The answer is 6.5 percentage points above the average prime offer rate for a comparable transaction. First-lien mortgage loan will exceed HOEPA’s APR threshold and qualify as a high-cost mortgage if its APR is 6.5 or more percentage points above the average prime offer rate for a comparable transaction |
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An underwriter |
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Is responsible for approving an originator’s license Verifies that the applicant and subject property meet lender guidelines Looks for red flags in marketing Facilitates the Safeguards Rule for the lender The answer is verifies that the applicant and subject property meet lender guidelines. The underwriter’s responsibility is to make sure that both the applicant and the property meet lender guidelines before approval for the investor |
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An underwriter |
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Is responsible for approving an originator’s license Verifies that the applicant and subject property meet lender guidelines Looks for red flags in marketing Facilitates the Safeguards Rule for the lender The answer is verifies that the applicant and subject property meet lender guidelines. The underwriter’s responsibility is to make sure that both the applicant and the property meet lender guidelines before approval for the investor |
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All of the following are considered involuntary liens, except |
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Mortgage Mechanic’s lien Tax lien Judgment The answer is mortgage. An involuntary lien is “imposed” on a borrower. In the case of a mortgage, a borrower would “consent” to having a lien on his/her home. |
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An underwriter |
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Is responsible for approving an originator’s license Verifies that the applicant and subject property meet lender guidelines Looks for red flags in marketing Facilitates the Safeguards Rule for the lender The answer is verifies that the applicant and subject property meet lender guidelines. The underwriter’s responsibility is to make sure that both the applicant and the property meet lender guidelines before approval for the investor |
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All of the following are considered involuntary liens, except |
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Mortgage Mechanic’s lien Tax lien Judgment The answer is mortgage. An involuntary lien is “imposed” on a borrower. In the case of a mortgage, a borrower would “consent” to having a lien on his/her home. |
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Which of the following settlement services would not be covered by RESPA? |
Services of a real estate agent Office supply provider Processing services Title abstractor The answer is office supply provider. A company that delivers office supplies is not generally covered by RESPA |
