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17 Cards in this Set

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What is the SAFE Act?
Secure and Fair Enforcement act. Established a nationwide mortgage licensing system in 2008 and is designed to enhance consumer protection.
What is the purpose of a regulatory authority/commissioner?
To establish licensing rules and regulations.
What is the regulatory authority/commissioner empowered to do?
They are empowered to issue, revoke, deny.... licenses, and conduct enforcement actions necessary to carrying out the SAFE act. They can establish relationships with the NMLS registry. Peform background checks. Determine continuing education requirements. Collect fees/impose penalties. Order a cease and desist.
What orders and directives can the regulatory authority/commissioner issue regarding cease and desist?
They can order a cease and desist from performing activities in violation of the SAFE Act, or from conducting business altogether. Cease and desist orders are effective immediately.
For what reason can the regulatory authority/commissioner issue penalties, and what can be the cost of such an act?
The regulatory authority/commissioner can issue a civil penalty for anyone who has violated a regulation, after giving notice and an opportunity for a hearing. Penalties for each act can be as much as $25,000.
What is a loan originator?
Someone who takes a residential mortgage loan application and offers or negotiates terms of a loan for compensation or gain
What is the difference between a mortgage banker and a mortgage broker?
A mortgage banker is a person who engages in the mortgage loan business by originating and closing loans with its own funds. A broker negotiates or places mortgage loans for others.
What entities developed and maintain the NMLS registry?
The CSBS (Conference of State Bank Supervisors) and AARMR (American Association of Residential Mortgage Regulators)
List the Federal Banking Agnecies.
The Board of Governors of the Federal Reserve System
The Comptroller of the Currency
The Director of the Office of Thrift Supervision
The National Credit Union Administration
The Federal Deposit Insurance Corporation
What is a nontraditional mortgage product?
Any product other than a 30 year fixed mortgage.
What is the difference between a statute and a rule?
A Statute is a law passed by a legislative body. A rule is an interpretation of a statute. Rules set standards and requirements, and can subject persons to a penalty when a requirement is violated.
What can the regulatory authority do with your personal information?
The state may share information with other states and federal officials in charge of the mortgage industry, keeping existing confidentiality policies in place.
In what circumstances would one be allowed to negotiate a mortgage loan without a license?
When you are negotiating with or on behalf of an immediate family member, making less than 5 loans a year, acting as a mortgage broker less than 5 times every 2 months, negotiating a loan for your own residence, or are solely involved in timeshare plans.
What are grounds for denying a license?
If they have had a loan originator license revoked previously, If they have been convicted of a felony within the last 7 years, or if they have ever been involved in an act of fraud, dishonesty, money laundering, etc.
When is it prohibited to broker a loan with a pre-payment penalty?
When the loan amount is under $150,000
When must a licensee disclose his NMLS number?
At the time fee is paid by a loan applicant, within the loan application forms, and any solicitations/advertisements including business cards and websites.
What must be clearly and conspicuously disclosed in advertisements?
The business name, the word "broker" (if applicable), and license number.