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76 Cards in this Set
- Front
- Back
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If a mortgage professional advertised a loan product at "7.25% APR," according to TILA what other information about rate must be included in the same advertisement?
A. The monthly payment for the loan B. The finance charges for the loan C. The payment period for the loan D. No other information is required |
D. No other information is required
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All of the following disclosures are provided for an adjustable rate loan, per TILA guideline, except:
A. Possibility of changes in the payment amount over time B. Frequency of changes in the annual percentage rate C. The index used to determine rate adjustments D. Statement that the interets rate will be offered for the duration of the loan |
D. Statement that the interets rate will be offered for the duration of the loan
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The Homeowners Protection Act requires services to do which of the following?
A. Automatically discontinue PMI when the borrower reaches 78% LTV B. Automatically discontinue PMI when the borrower reaches 80% LTV as long as payments have been made on time C. Drop PMI when the borrower's equity reaches 20% D. Continue charging PMI until the borrower files an official request for its discontinuance |
A. Automatically discontinue PMI when the borrower reaches 78% LTV
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Under provisions of the Truth-in-Lending Act, what is the maximum tolerance for an understated finance charge?
A. $50 B. $10 C. $150 D. $100 |
D. $100
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When is the Servicing Disclosure Statement provided to the borrower?
A. Three days after application B. At closing C. At the time servicing is transferred D. Three business days prior to closing |
A. Three days after application
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Which of the following is defined as the cost of credit expressed as a dollar amount?
A. Finance charge B. Debt rations C. APR D.Loan-to-Value |
A. Finance charge
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A loan contains prepayment penalties. Which of the following documents would a borrower review to confirm this?
A. HUD-1 and GFE B. TIL Disclosure and promissory note C. Deed of trust D. Mortgage Servicing Disclosure |
B. TIL Disclosure and promissory note
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Who must receive a Notice of Right to Cancel in a refinance transaction?
A. Only parties with 51% or ore ownership in the property B. Only parties who are signing the mortgage C. Only the primary borrower D. Anyone with ownership interest in the property |
D. Anyone with ownership interest in the property
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According to TILA, a variation up to what amount is permitted for athe annual percentage rate in a regual fixed rate mortgae transaction?
A. One-quarter of one percent B. One-half of one percent C. Three-quarters of one percent D. One-eight of one percent |
D. One-eight of one percent
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An attorney and a lender entered into an agreement in which the attorney's car loan payments are paid by the lender in return for the names of potential loan applicants. Who has violated RESPA?
A. The lender B. Both the attorney and the lender C. Neither the attorney nor the lender D. The attorney |
B. Both the attorney and the lender
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A lender is gathering information on loans for the purposes of HMDA reporting. Loans made on which the following property types may be left out of the lender's reports?
A. Vacation homes B. Duplexes C. Apartment building D. Travel trailers |
D. Travel trailers
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The Gramm-Leach-Bliley Act specifies that a consumer must be given ___ to opt out before personal financial information is disclosed to a third party.
A. Seven business days B. 30 days C. A reasonable opportunity D. 90 days |
C. A reasonable opportunity
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If an individual submits false information for the purpose of obtaining a federally covered loan, he/she could face:
A. Up to $1,000,000 fine and prison B. License suspension C. A misdemeanor conviction D. A reprimand and loss of commission |
A. Up to $1,000,000 fine and prison
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Yield spread premium is disclosed to the borrower:
A. Only on purchase transactions B. On the TIL Disclosure and promissory note C. Only on high cost loans D. On the GFE and Settlement Statement |
D. On the GFE and Settlement Statement
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Mr. Jones' loan application has been denied and you provide him with an Adverse Action Notice as required by ECOA. Which of the following pieces of information would NOT be included on the notice?
A. Reasons for the denial of credit B. Information ob the credit reporting agency if the adverse action is based on his credit report C. His credit score D. A description of credit he requested |
C. His credit score
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Settlement fees and other charges related to a loan transaction must be recorded on the HUD-1 Settlement Statement as:
A. Actual percentage of the loan amount B. Actual dollar amounts C. Estimated dollar amounts D. Estimated percentage of the loan amount |
B. Actual dollar amounts
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Which of the following fees is not included on the Good Faith Estimate?
A. Real Estate Taxes B. Discount Points C. Real Estate Broker Fees D. Loan Origination Fees |
C. Real Estate Broker Fees
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Which of the following is true of PMI disclosure?
A. It is required on all loans B. It is the same for fixed rate and adjustable rate loans C. It varies based on each type of loan D. It is applicable for loans on every type of property |
B. It is the same for fixed rate and adjustable rate loans
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Which federal law requires originators to use their best judgement in determining demographic information on a borrower if the borrower does not provide the information voluntarily?
A. TILA B. CRA C. RESPA D. HMDA |
D. HMDA
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Which of the follong reason for denying an applicant a loan is a violation of fair lending laws?
A. The applicant's age is below the minimum age for executing a contract B. The applicant;s income doesn't meet the required level for repayment of the loan C. The applicant's credit history included defaults on many credit payments D. The applicant's recent marital status may lead to a change in employment |
D. The applicant's recent marital status may lead to a change in employment
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Which of the following documents shows the cost of a loan expressed as an annual percentage rate?
A. Consumer Caution Notice B. TIL Disclosure C. HOEPA D. HUD-1 |
B. TIL Disclosure
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A mortgage professional may face which of he following if he or she engages in the illegal acceptance of referral fees?
A. Fines of $15,000 and up to one year in prison B. Fines of $20,000 and up to two year in prison C. Fines of $25,000 and up to two year in prison D Fines of $10,000 and up to one year in prison |
D Fines of $10,000 and up to one year in prison
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For the purpose of rescinding a loan transaction, "Business days" include every day of the week except:
A. Sundays B. Sundays and federal holidays C. Federal holidays D. Saturdays and Sundays |
B. Sundays and federal holidays
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According to federal fair lending laws which of the following cannot be considered when qualifying and applicant for a loan?
A. A disabled applicant's credit report shows several instances of 60 and 90-day late credit card payments B. A minority applicant does not have sufficient funds for down payment C. A female applicant is 4 months pregnant and might not continue working once her baby is born D. A female applicant;s credit report and application show gaps of sv= several months between jobs over the past 2 years |
C. A female applicant is 4 months pregnant and might not continue working once her baby is born
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A lender has an affiliated business arrangement with a third party service provider. Under what circumstances can the lender require a borrow to use the services in a loan transaction?
A. Under no circumstances; this is strictly prohibited by RESPA B. Only if the lender has an ownership interest of more than 1% C. If there is no kickback or referral fees and the service provider is an attorney, credit reporting agency or appraiser D. If there is no kickback or referral fee. |
C. If there is no kickback or referral fees and the service provider is an attorney, credit reporting agency or appraiser
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A borrower may request a copy of the HUD-1 how many days prior to settlement?
A. 5 B. 3 C. 7 D. 1 |
D. 1
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Lenders must report detailed information about loan transactions and demographic information concerning borrowers in order to prove they are not discriminating. Which of the following laws creates that reporting requirement?
A. RESPA B. Gramm-Leach-Bliley Act C. HMDA D. TILA |
C. HMDA
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Under the Gramm-Leach-Bliley Act, which of the following is considered nonpublic information?
A. A borrower's current loan balances B. Former owners of a particular property C. The access value of a subject property D. The street address of the propert a borrower intends to purchase |
A. A borrower's current loan balances
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You have taken a loan applicant from a customer with an excellent credit score. When should you advise him about the status of his application?
A. Within 30 days B. Within three days C. Within one week D. Within 90 days |
A. Within 30 days
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***Flood insurance costs are included in which section of the HUD-1?
A. reserves deposited with the lender B. Title charges C. Additional settlement charges D. Items payable in connection with the loan |
A. reserves deposited with the lender
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When a borrower uses a mortgage broker to originate his or her loan, who is initially responsible for providing the Good Faith Estimate?
A. The mortgage broker B. The title company C. The settlement agent D. The lender |
A. The mortgage broker
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Which of the following documents discloses the annual percentage rate for a loan to a borrower?
A. Opt-out Notice B. TIL Disclosure Statement C. Promissory D. Good Faith Estimate |
B. TIL Disclosure Statement
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The Real Estate Settlement Procedures Act applies to:
A. Residential lot loan B. Residential loans C. Residential investment properties such as condos and duplexes D. Commercial loans |
A. Residential lot loan
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An initial Servicing Transfer Notice must be provided to a borrower, at least ____ days prior to the transfer of servicing of the loan?
A. 30 B. 15 C. 45 D. 60 |
B. 15
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Which of the following federal agencies creates the regulation for TILA?
A. Federal Reserve B. HUD C. FHA D. Federal Trade Commission |
A. Federal Reserve
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When must the TILA Disclosure be provided to the borrower?
A. Within 3 days after closing B. Within 3 business days of application C. At closing D. 30 days prior to closing |
B. Within 3 business days of application
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In a mortgage broker decides to use telemarketing to estable leads for loan origination, which of the following should occur:
A. The broker should register with the FTC in accordance with the DO-Not-Call Implementation act B. The broker should stop calling current customers unless they have given consent to accept calls C. The broker should invest in a state oft he art predictive dialer D. The broker should only call former and current customer to ask for referrals |
A. The broker should register with the FTC in accordance with the DO-Not-Call Implementation act
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What ist he primary purpose of the Truth-in-Lending Act?
A. To ensure that thrid-party service providers do not charge high fees B. To ensure that applicants have equal opportunity to credit from lenders C. To ensure that creditors provide consumers clear disclosure of the terms of credit D. To ensyre that creditors fo not charge high interest rate on credit |
C. To ensure that creditors provide consumers clear disclosure of the terms of credit
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A real estate agent receives a %50 restaurant gift certificate from a mortgage broker as a token of appreciation for referring a home buyer to the mortgage broker. Which of the following laws was violated as a result of this transaction?
A. RESPA B. FCRA C. Fair Housing Act D. ECOA |
A. RESPA
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The TILA Disclosure Statement for a regular loan must be re-disclosed to a borrower if:
A. The APR varies more than 1/8th of 1% before closing B. The borrower rejects the APR stated on the initial TIL C. The APR changes by more than 1/4th of 1% before closing D. The APR on the TIL and the GFE don't match |
A. The APR varies more than 1/8th of 1% before closing
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Which of the following facts about Settlement Cost Booklet is NOT true?
A. It can be included in a larger document B. It can he translated into other languages C. It can be reproduced in any form D. It can be stamped with the company name pf the mortgage professional |
A. It can be included in a larger document
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Under the Truth-in-Lending Act, a mortgage professional is required to disclose ___ to a borrower.
A. Terms of the credit transaction B. Estimated closing costs C. Appraisal results D. Personal financial information provided by a credit reporting agency |
A. Terms of the credit transaction
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A lender is permitted to deny an applicant credit based on which of the following factors?
A. The applicant lacks income stability B. The applicant is divorced C. The applicant has participated in a consumer counseling program D. The applicant public assistance income |
A. The applicant lacks income stability
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According to teh fair lending law, which of the following ar eyou permitted oto ask loan appliants?
A. Their race B. Their religion C. If they stop working once they have children? D. If they plan to have more than one child |
A. Their race
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If a creditor violate ECOA, how many years does a consumer have in which to take civil action?
A. 2 B. 10 C. 1 D. 5 |
A. 2
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You must re-disclose the APR on a regular loan if:
A. It changes by more than 1/2 of one percent from its initial disclosure B. It varies by more than 1/8 of one percent from its initial disclosure C. It is more than one percent greater than it was at the time of its initial disclosure D. 30 days have elapsed since the time of the disclosure |
B. It varies by more than 1/8 of one percent from its initial disclosure
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The disclosure requirements for RESPA would apply to which of the following loans?
A. A loan to purchase 75 acres of land B. A loan to purchase a duplex and rehabilitate it into a single family dwelling C. A farm lona D. A loan to purchase a property that includes a gas station and convenience store. |
B. A loan to purchase a duplex and rehabilitate it into a single family dwelling
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Which of the following scenarios would violate Section 8 of RESPA?
A. A broker accepts a lon origination fee B. An attorney accepts payment for performing a title search C. A broker charges $50 for obtaining a $50 credit report D. A title company pays a mortgage broker $100 per client for referral of settlement business |
D. A title company pays a mortgage broker $100 per client for referral of settlement business
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When calculating finance charges in compliance with TILA, all of the following are included excerpt:
A. Private mortgage insurance premium B. Appraisal fees C. Settlement fees D. Broker fees |
B. Appraisal fees
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What is the purpose of Regulation B?
A. To promote the availability of credit to all creditworthy applicants B. To require disclosure of settlement costs C. To regulate referral fees D. To prohibit misleading advertisements for mortgage loans |
A. To promote the availability of credit to all creditworthy applicants
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What is the purpose of Regulation B?
A. To prohibit misleading advertisements for mortgage B. To require disclosure of settlement costs C. To regulate referral fees D. To prohibit discrimination in credit transaction |
D. To prohibit discrimination in credit transaction
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What federal statute primarily governs settlement of residential mortgage loans?
A. RESPA B. ECOA C. TILA D. HMDA |
A. RESPA
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Under ECOA, when is a notice concerning the right to obtain a copy of the appraisal due to a consumer?
A. At the time of Notice of Action Taken B. Within 3 days of loan application C. Within 90 days of loan application D. Within 30 days closing |
A. At the time of Notice of Action Taken
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Under the Fair Credit Reporting Act, which of the following entities has a burden of protecting a consumer's privacy when his/her credit information is being reported?
A. The consumer B. Mortgage broker C. HUD D. Credit reporting agency |
D. Credit reporting agency
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What must be provided to a borrower if his/her loan application is turned down due to the credit score not meeting lender guidelines?
A. Copy of their credit report B. Loan options for which they qualify C. Adverse action notice D. Verbal notice |
C. Adverse action notice
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You take an application over the phone. Which of the following must occur within three business days of a potential borrower submitting an application for a loan?
A. Hand deliver or mail the Good Faith Estimate and Affiliated Business Disclosure B. Provide the borrower with confirmation of receipt of the application C. Submit the application to the lender for underwriting D. Hand deliver or mail the Good Faith Estimate and TIL disclosure |
D. Hand deliver or mail the Good Faith Estimate and TIL disclosure
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When must a lender advise loan applicants about the status of their application?
A. Within 30 days B. Within 90 days C. Within three days D. Within one week |
A. Within 30 days
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***John Brown and Jane Brown are co-owners of a property that is their principal residence and are entering into a refinance transaction that is subject ti rescission. John is provided with one copy of the eNotice of Right to Cancel, and jane received none. What is their deadline?
A. 72 hours after closing B. Three years after closing C. Midnight on the third day following closing D. Three business days after closing |
B. Three years after closing
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***Finance charges always include which of the following
A. Credit report fee B. Mortgage broker fee C. Documentation fee D. Title insurance charges |
B. Mortgage broker fee
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Jack Smith has been turned down for a loan. He would like to receive a copy of his appraisal. When must the lender receive his request for the appraisal?
A. Within 90 days of application B. Within 90 days of the appraisal C. Within 90 days after Jack has been turned down for the loan D. Within 90 days after Jack has received the Right to Receive a Copy of Appraisal Notice |
D. Within 90 days after Jack has received the Right to Receive a Copy of Appraisal Notice
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What kind of loan transaction requires disclosure of the Settlement Cost Booklet?
A. A reverse mortgage origination B. Refinance transaction C. A new home purchase D. Subordinate financing |
C. A new home purchase
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A mortgage broker pays for title services on behalf of a developer. In return, the developer agrees to refer prospective buyers to the mortgage broker. Who has violated RESPA?
A. Both B. The developer C. The mortgage broker D. Neither |
A. Both
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Which of the following payments is in a violation of RESPA?
A. Two mortgae brokers decide to split the mortgage broker fee from a residential loan transaction B. A title company charges a market fee for examination and evaluation of title evidence C. A mortgage broker pays a fee to determine if a property is located in a flood zone D. A mortgage broker accepts a fee for sending its customers to a title company |
D. A mortgage broker accepts a fee for sending its customers to a title company
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Five siblings have ownership rights to a property. If a refinance transaction affecting the property is subject to rescission, how many of these individuals must submit a rescission notice in order to void the loan?
A. All five B. Any of the five C. A majority of the five D. At least two of the five |
B. Any of the five
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Why did Congress enact the Home Mortgage Disclosure Act?
A. To assist lenders in setting intertest rates for residential loans B. To create a repository of information on real estate values C. To ensure home values are consistent within geographic areas D. To help identify patterns of discriminatory lending |
D. To help identify patterns of discriminatory lending
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A borrower has gone to settlement for a cash out refinance on Tuesday for his principal residence. Their rescision period is over at midnight on Friday. According to the provisions specified under federal law, when does the loan fund?
A. Monday, the following week B. Friday C. Saturday D. Tuesday |
C. Saturday
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An aggregate escrow analysis is used to do which of the following?
A. Ensure the loan is properly amortized B. Prevent escrow shortage C. Reduce burden on the servicer D. Prevent escrow overages |
D. Prevent escrow overages
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When must a loan applicant receive an adverse action notice if they cannot qualify for a loan?
A. Within 60 days of the loan application B. Within 15 days of the loan application C. Within 90 days of the loan application D. Within 30 days of the loan application |
D. Within 30 days of the loan application
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RESPA does not apply to:
A. Loans secured by a lien on a principal dwelling B. Federally related mortgage loans C. Loans for business, commercial, and agricultural purposes D. Subprime mortgage loans |
C. Loans for business, commercial, and agricultural purposes
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The Real Estate Settlement Procedures Act includes all of the following provisions except?
A. It requires the use of a uniform settlement statement B. It limits the kind of business affiliations that settlement providers may create C. It prohibits receipt of referral fees D. It establishes the maximum origination fee that may be charged on a loan |
D. It establishes the maximum origination fee that may be charged on a loan
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It is legal for settlement service provider A to pay settlement service provider B a portion of fees charged to a borrow only when:
A. The consumer is aware the service providers are splitting fees B. Service provider B has performed bona fide services to earn the fee C. Both service providers have a written agreement in place to split fees D. The service providers are separate entitles and not affiliate in any way |
B. Service provider B has performed bona fide services to earn the fee
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RESPA does not apply to:
A. Loans for business, commercial, and agricultural purposes B. Federally related mortgae loans C.Loans secured by a lien on a principal dwelling D. Subprime mortgage loans |
A. Loans for business, commercial, and agricultural purposes
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***Which of the following fees is not included on the Good Faith Estimate?
A. Real Estate Taxes B. Real Estate Broker Fees C. Loan Origination Fees D. Discount Points |
B. Real Estate Broker Fees
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Which of the following is included when calculating finance charges?
A. Seller's point B. Interest C. Notary fees D. Title insurance fee |
B. Interest
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The penalties for paying or accepting an illegal referral fee are:
A. Fines up to $5,000 and up to one year in prison B. Fines up to $10,000 and up to three year in prison C. Fines up to $10,000 and up to one year in prison D. Fines up to $20,000 and up to one year in prison |
C. Fines up to $10,000 and up to one year in prison
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If a mortgage broker is receiving yield spread premium on a loan transaction, on which of the following documents must the amount be disclosed?
A. GFE B. Affiliated business arrangement disclosure C. Borrower/broker agreement D. TIL Disclosure |
A. GFE
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