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76 Cards in this Set
- Front
- Back
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The administrative authority of the Commissioner includes all but which of the following? |
Promulgate rules or regulations implementing the S.A.F.E. Act Administer, interpret, and enforce the S.A.F.E. Act Carry out the intentions of the Legislature Sentencing violators of the S.A.F.E. Act to appropriate prison terms The answer is sentencing violators of the S.A.F.E. Act to appropriate prison terms. State regulators, such as a Commissioner, are not responsible for determining criminal sentences for violators of the S.A.F.E. Act. |
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Which of the following forms of compensation is a violation of RESPA? |
A fee paid by a title company to an originator for referral of settlement services Borrower credit Money earned by a title company for closing a loan Broker fee The answer is a fee paid by a title company to an originator for referral of settlement services. RESPA requires any fees to be “earned.” Referral fees are considered a violation. |
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When is it legal to refuse to conduct a lending transaction with a consumer on the basis of their personal characteristics? |
The consumer is a minority who may need assistance with closing costs A large percentage of the borrower’s income is from public assistance The applicant is married but applying individually The borrower is too young to have legal authority to enter a binding contract The answer is the borrower is too young to have legal authority to enter a binding contract. A creditor may consider the personal characteristics of the applicant if the applicant is not of legal age to enter a binding contract. |
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All of the following types of information must be reported for government monitoring purposes in accordance with HMDA, except |
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Identification of loans subject to HOEPA Action taken on the loan and the location of the subject property Ethnicity, race, sex, and income of the applicant Ethnicity, race, sex, and religion of the applicant The answer is ethnicity, race, sex, and religion of the applicant. HMDA monitoring requires the collection of extensive data about each mortgage loan application and origination. This includes any action taken on the loan, indication of whether the loan is subject to HOEPA, and the ethnicity, race, sex, and income of the applicant. HMDA does not require the collection of information about an applicant’s religion |
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Which of the following borrowers is best suited for an HECM? |
A borrower who needs money for several home improvement projects A 62-year old borrower who just cashed in a 401k for a down payment A borrower who was disabled during service for the military A 65-year-old borrower without a mortgage who would like to supplement his income The answer is a 65-year-old borrower without a mortgage who would like to supplement his income. Home equity conversion mortgages allow elderly borrowers who have significant equity in their homes the opportunity to draw on that equity, without repayment, as long as they continue to live in the home. |
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Which of the following borrowers is best suited for an HECM? |
A borrower who needs money for several home improvement projects A 62-year old borrower who just cashed in a 401k for a down payment A borrower who was disabled during service for the military A 65-year-old borrower without a mortgage who would like to supplement his income The answer is a 65-year-old borrower without a mortgage who would like to supplement his income. Home equity conversion mortgages allow elderly borrowers who have significant equity in their homes the opportunity to draw on that equity, without repayment, as long as they continue to live in the home. |
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A consumer signs a closed-end lending agreement on Wednesday. What is the latest that he/she may wait to exercise the right to rescind? |
Midnight on Friday Midnight on Saturday Midnight on Monday Midnight on Tuesday The answer is midnight on Saturday. A consumer for a closed-end loan may exercise the right to rescind at any time up until midnight of the third business day after signing the lending agreement. For the purposes of calculating time limitations for rescission, Saturdays are considered to be business days – meaning that if the consumer signed an agreement on Wednesday, the latest he or she may wait before exercising the right to rescind would be midnight on Saturday |
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If a borrower is required to pay alimony or child support, it must be included as a(n): |
Asset Liability Qualifier Mitigating circumstance The answer is liability. Alimony and child support must be included in a borrower’s liabilities if they are required to pay |
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According to the SAFE Act, which of the following is defined as a nontraditional mortgage product? |
Any mortgage product other than a 30-year fixed-rate mortgage A 30-year fixed-rate mortgage An ARM loan with a 5-year fixed-rate period A 15-year fixed-rate mortgage The answer is any mortgage product other than a 30-year fixed-rate mortgage. The SAFE Act defines a “nontraditional mortgage product” as any product other than a 30-year fixed-rate mortgage. |
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A lender who refuses to originate loans in a particular neighborhood or ZIP code because of the perceived creditworthiness of consumers living in the area is in violation of |
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FCRA ECOA HOEPA RESPA The answer is ECOA. Refusing to originate loans in a particular neighborhood or ZIP code because of perceived creditworthiness is a practice known as “redlining” and is a violation of ECOA. |
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ECOA applies to the extension of credit for: |
Loans secured by a first or subordinate lien on residential property Residential, business, commercial, and agricultural loans Business, commercial, and agricultural loans All credit other than government loans The answer is residential, business, commercial, and agricultural loans. ECOA has a wider range than RESPA and TILA, beyond just loans related to residential properties. The law also covers loans for businesses, commercial, and agricultural loans. |
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ECOA applies to the extension of credit for: |
Loans secured by a first or subordinate lien on residential property Residential, business, commercial, and agricultural loans Business, commercial, and agricultural loans All credit other than government loans The answer is residential, business, commercial, and agricultural loans. ECOA has a wider range than RESPA and TILA, beyond just loans related to residential properties. The law also covers loans for businesses, commercial, and agricultural loans. |
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Which law restricts the sharing of nonpublic personal information given when a consumer applies for a mortgage loan? |
Fair Credit Reporting Act FTC Disposal Rules Gramm-Leach-Bliley Act Consumer Regulatory Protection Act The answer is Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act is the federal law that limits or restricts the use of a consumer’s nonpublic personal information. |
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ECOA applies to the extension of credit for: |
Loans secured by a first or subordinate lien on residential property Residential, business, commercial, and agricultural loans Business, commercial, and agricultural loans All credit other than government loans The answer is residential, business, commercial, and agricultural loans. ECOA has a wider range than RESPA and TILA, beyond just loans related to residential properties. The law also covers loans for businesses, commercial, and agricultural loans. |
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Which law restricts the sharing of nonpublic personal information given when a consumer applies for a mortgage loan? |
Fair Credit Reporting Act FTC Disposal Rules Gramm-Leach-Bliley Act Consumer Regulatory Protection Act The answer is Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act is the federal law that limits or restricts the use of a consumer’s nonpublic personal information. |
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In the absence of caps, adjustments on an ARM loan would be determined solely by: |
The index The margin The fully-indexed rate The lifetime rate The answer is the fully-indexed rate. If there were no caps involved, an ARM would adjust based on the movement of the fully-indexed rate (margin + index). It would not be adjusted based on index alone or margin alone. While the margin does not change over time, it must be combined with the fluctuating index to find the new rate. It is not sufficient to apply only the index or only the margin to the adjustment - they must be combined into the fully-indexed rate |
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Which of the following would prevent the conveyance of title? |
Paid lien Owner dies and leaves a legal will Encumbrance Father passing title to his son while still living The answer is encumbrance. An encumbrance would prevent the conveyance of title, meaning there is a debt or lien against the property and title may not change hands until the debt or lien is satisfied |
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Which of the following would prevent the conveyance of title? |
Paid lien Owner dies and leaves a legal will Encumbrance Father passing title to his son while still living The answer is encumbrance. An encumbrance would prevent the conveyance of title, meaning there is a debt or lien against the property and title may not change hands until the debt or lien is satisfied |
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The examination of county and municipal records to determine the legal status of a property is called |
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Title insurance Title search Title binder Title commitment The answer is title search. The title search is the first step in the title process. It involves an abstractor or an attorney searching county or municipal records to determine the status of a property |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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Which of the following reasons for denying an applicant a loan is a violation of fair lending laws? |
The applicant’s recent marital status may lead to a change in employment The applicant’s income does not meet the required level for repayment of the loan The applicant’s age is below the minimum age for executing a contract The applicant’s credit history includes defaults on many credit payments The answer is the applicant’s recent marital status may lead to a change in employment. It is a violation of fair lending laws to deny an applicant because his or her recent marital status may lead to a change in employment |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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Which of the following reasons for denying an applicant a loan is a violation of fair lending laws? |
The applicant’s recent marital status may lead to a change in employment The applicant’s income does not meet the required level for repayment of the loan The applicant’s age is below the minimum age for executing a contract The applicant’s credit history includes defaults on many credit payments The answer is the applicant’s recent marital status may lead to a change in employment. It is a violation of fair lending laws to deny an applicant because his or her recent marital status may lead to a change in employment |
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HMDA data is collected and aggregated to determine: |
The success rate of nontraditional mortgage loans Whether the success of lending terms varies in different geographic areas The extent of creditor compliance with privacy protection laws Whether different credit terms are offered to members of protected classes The answer is whether different credit terms are offered to members of protected classes. HMDA data is collected and aggregated to determine whether different credit terms are offered to members of different protected classes. |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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Which of the following reasons for denying an applicant a loan is a violation of fair lending laws? |
The applicant’s recent marital status may lead to a change in employment The applicant’s income does not meet the required level for repayment of the loan The applicant’s age is below the minimum age for executing a contract The applicant’s credit history includes defaults on many credit payments The answer is the applicant’s recent marital status may lead to a change in employment. It is a violation of fair lending laws to deny an applicant because his or her recent marital status may lead to a change in employment |
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HMDA data is collected and aggregated to determine: |
The success rate of nontraditional mortgage loans Whether the success of lending terms varies in different geographic areas The extent of creditor compliance with privacy protection laws Whether different credit terms are offered to members of protected classes The answer is whether different credit terms are offered to members of protected classes. HMDA data is collected and aggregated to determine whether different credit terms are offered to members of different protected classes. |
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An ARM was locked for three years and began adjusting two years ago. It is about to adjust for the third time. What limits the amount the interest rate will increase on this movement? |
Payment cap Starter cap Initial cap Periodic cap The answer is periodic cap. The periodic cap is used to limit rate adjustments for ARMs after the initial adjustment. |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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Which of the following reasons for denying an applicant a loan is a violation of fair lending laws? |
The applicant’s recent marital status may lead to a change in employment The applicant’s income does not meet the required level for repayment of the loan The applicant’s age is below the minimum age for executing a contract The applicant’s credit history includes defaults on many credit payments The answer is the applicant’s recent marital status may lead to a change in employment. It is a violation of fair lending laws to deny an applicant because his or her recent marital status may lead to a change in employment |
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HMDA data is collected and aggregated to determine: |
The success rate of nontraditional mortgage loans Whether the success of lending terms varies in different geographic areas The extent of creditor compliance with privacy protection laws Whether different credit terms are offered to members of protected classes The answer is whether different credit terms are offered to members of protected classes. HMDA data is collected and aggregated to determine whether different credit terms are offered to members of different protected classes. |
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An ARM was locked for three years and began adjusting two years ago. It is about to adjust for the third time. What limits the amount the interest rate will increase on this movement? |
Payment cap Starter cap Initial cap Periodic cap The answer is periodic cap. The periodic cap is used to limit rate adjustments for ARMs after the initial adjustment. |
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A balloon rider, a prepayment penalty rider and a second-home rider may all be part of: |
A title insurance policy A deed of trust A note A power-of-attorney agreement The answer is a deed of trust. A deed of trust is used to secure a note. A deed can carry a rider, or an addendum, which may include a balloon rider, a prepayment penalty rider and a second-home rider, among others |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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Which of the following reasons for denying an applicant a loan is a violation of fair lending laws? |
The applicant’s recent marital status may lead to a change in employment The applicant’s income does not meet the required level for repayment of the loan The applicant’s age is below the minimum age for executing a contract The applicant’s credit history includes defaults on many credit payments The answer is the applicant’s recent marital status may lead to a change in employment. It is a violation of fair lending laws to deny an applicant because his or her recent marital status may lead to a change in employment |
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HMDA data is collected and aggregated to determine: |
The success rate of nontraditional mortgage loans Whether the success of lending terms varies in different geographic areas The extent of creditor compliance with privacy protection laws Whether different credit terms are offered to members of protected classes The answer is whether different credit terms are offered to members of protected classes. HMDA data is collected and aggregated to determine whether different credit terms are offered to members of different protected classes. |
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An ARM was locked for three years and began adjusting two years ago. It is about to adjust for the third time. What limits the amount the interest rate will increase on this movement? |
Payment cap Starter cap Initial cap Periodic cap The answer is periodic cap. The periodic cap is used to limit rate adjustments for ARMs after the initial adjustment. |
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A balloon rider, a prepayment penalty rider and a second-home rider may all be part of: |
A title insurance policy A deed of trust A note A power-of-attorney agreement The answer is a deed of trust. A deed of trust is used to secure a note. A deed can carry a rider, or an addendum, which may include a balloon rider, a prepayment penalty rider and a second-home rider, among others |
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Liabilities may include which of the following? |
Real estate Net worth of businesses Student loans Stocks and bonds The answer is student loans. Liabilities may include student loans. |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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Which of the following reasons for denying an applicant a loan is a violation of fair lending laws? |
The applicant’s recent marital status may lead to a change in employment The applicant’s income does not meet the required level for repayment of the loan The applicant’s age is below the minimum age for executing a contract The applicant’s credit history includes defaults on many credit payments The answer is the applicant’s recent marital status may lead to a change in employment. It is a violation of fair lending laws to deny an applicant because his or her recent marital status may lead to a change in employment |
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HMDA data is collected and aggregated to determine: |
The success rate of nontraditional mortgage loans Whether the success of lending terms varies in different geographic areas The extent of creditor compliance with privacy protection laws Whether different credit terms are offered to members of protected classes The answer is whether different credit terms are offered to members of protected classes. HMDA data is collected and aggregated to determine whether different credit terms are offered to members of different protected classes. |
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An ARM was locked for three years and began adjusting two years ago. It is about to adjust for the third time. What limits the amount the interest rate will increase on this movement? |
Payment cap Starter cap Initial cap Periodic cap The answer is periodic cap. The periodic cap is used to limit rate adjustments for ARMs after the initial adjustment. |
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A balloon rider, a prepayment penalty rider and a second-home rider may all be part of: |
A title insurance policy A deed of trust A note A power-of-attorney agreement The answer is a deed of trust. A deed of trust is used to secure a note. A deed can carry a rider, or an addendum, which may include a balloon rider, a prepayment penalty rider and a second-home rider, among others |
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Liabilities may include which of the following? |
Real estate Net worth of businesses Student loans Stocks and bonds The answer is student loans. Liabilities may include student loans. |
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How many total hours of ethics are required, at minimum, for continuing education? |
Three Eight Two Eleven The answer is two. The NMLS requires, as a federal minimum, at least two hours of ethics training within the total eight hours of education required for continuing education. |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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Which of the following reasons for denying an applicant a loan is a violation of fair lending laws? |
The applicant’s recent marital status may lead to a change in employment The applicant’s income does not meet the required level for repayment of the loan The applicant’s age is below the minimum age for executing a contract The applicant’s credit history includes defaults on many credit payments The answer is the applicant’s recent marital status may lead to a change in employment. It is a violation of fair lending laws to deny an applicant because his or her recent marital status may lead to a change in employment |
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HMDA data is collected and aggregated to determine: |
The success rate of nontraditional mortgage loans Whether the success of lending terms varies in different geographic areas The extent of creditor compliance with privacy protection laws Whether different credit terms are offered to members of protected classes The answer is whether different credit terms are offered to members of protected classes. HMDA data is collected and aggregated to determine whether different credit terms are offered to members of different protected classes. |
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An ARM was locked for three years and began adjusting two years ago. It is about to adjust for the third time. What limits the amount the interest rate will increase on this movement? |
Payment cap Starter cap Initial cap Periodic cap The answer is periodic cap. The periodic cap is used to limit rate adjustments for ARMs after the initial adjustment. |
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A balloon rider, a prepayment penalty rider and a second-home rider may all be part of: |
A title insurance policy A deed of trust A note A power-of-attorney agreement The answer is a deed of trust. A deed of trust is used to secure a note. A deed can carry a rider, or an addendum, which may include a balloon rider, a prepayment penalty rider and a second-home rider, among others |
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Liabilities may include which of the following? |
Real estate Net worth of businesses Student loans Stocks and bonds The answer is student loans. Liabilities may include student loans. |
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How many total hours of ethics are required, at minimum, for continuing education? |
Three Eight Two Eleven The answer is two. The NMLS requires, as a federal minimum, at least two hours of ethics training within the total eight hours of education required for continuing education. |
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Intentionally targeting borrowers in poor or upnderserved areas with expensive high-cost loans is considered illegal under |
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TILA Homeowners Protection Act HOEPA RESPA The answer is HOEPA. HOEPA prohibits the intentional targeting of poor or underserved areas with expensive high-cost loans, which is a practice known as reverse redlining. |
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What action must a creditor take if it is discovered that the APR is outside of the range of tolerance? |
Provide disclosure of the corrected discrepancy and wait three business days before closing Keep records of the discrepancy for three years Adjust the APR and close the loan as scheduled Restart the seven-business-day waiting period after the new disclosure has been made The answer is provide disclosure of the corrected discrepancy and wait three business days before closing. When the APR is inaccurate, the APR must be re-disclosed to the borrower, and the loan cannot close for at least three business days from the re-disclosure date |
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A state-licensed loan originator is |
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Licensed by the NMLS An employee of a non-depository institution Identified by the unique identifier of his/her employer An employee of a subsidiary which is owned or controlled by a depository institution The answer is an employee of a non-depository institution. A state-licensed loan originator is an employee of a non-depository institution and is licensed by the state. An originator employed by a depository or the Farm Credit Administration would be registered |
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Oversight and enforcement of FCRA is left to what government agency? |
FNMA CFPB FHFA HUD The answer is CFPB. The CFPB has primary oversight and enforcement authority for the Fair Credit Reporting Act. However, it shares some of its enforcement authority with the FTC |
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Misleading claims of debt elimination in an advertisement may lead a borrower to inaccurately believe that: |
Consumer debt is “disappearing” as a result of the new loan The borrower’s new loan will lower the overall monthly outlay The borrower is extending what may have been a short-term debt out over a longer period The borrower may gain some tax benefit by rolling consumer debt into the new mortgage loan The answer is consumer debt is “disappearing” as a result of the new loan. “Debt elimination” is a regular claim of some mortgage professionals that specialize in consolidation loans, and it is often very misleading. Some borrowers will not understand that by “rolling in” the debt to a new mortgage, they are just extending the term and often paying more in interest. |
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Which of the following reasons for denying an applicant a loan is a violation of fair lending laws? |
The applicant’s recent marital status may lead to a change in employment The applicant’s income does not meet the required level for repayment of the loan The applicant’s age is below the minimum age for executing a contract The applicant’s credit history includes defaults on many credit payments The answer is the applicant’s recent marital status may lead to a change in employment. It is a violation of fair lending laws to deny an applicant because his or her recent marital status may lead to a change in employment |
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HMDA data is collected and aggregated to determine: |
The success rate of nontraditional mortgage loans Whether the success of lending terms varies in different geographic areas The extent of creditor compliance with privacy protection laws Whether different credit terms are offered to members of protected classes The answer is whether different credit terms are offered to members of protected classes. HMDA data is collected and aggregated to determine whether different credit terms are offered to members of different protected classes. |
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An ARM was locked for three years and began adjusting two years ago. It is about to adjust for the third time. What limits the amount the interest rate will increase on this movement? |
Payment cap Starter cap Initial cap Periodic cap The answer is periodic cap. The periodic cap is used to limit rate adjustments for ARMs after the initial adjustment. |
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A balloon rider, a prepayment penalty rider and a second-home rider may all be part of: |
A title insurance policy A deed of trust A note A power-of-attorney agreement The answer is a deed of trust. A deed of trust is used to secure a note. A deed can carry a rider, or an addendum, which may include a balloon rider, a prepayment penalty rider and a second-home rider, among others |
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Liabilities may include which of the following? |
Real estate Net worth of businesses Student loans Stocks and bonds The answer is student loans. Liabilities may include student loans. |
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How many total hours of ethics are required, at minimum, for continuing education? |
Three Eight Two Eleven The answer is two. The NMLS requires, as a federal minimum, at least two hours of ethics training within the total eight hours of education required for continuing education. |
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Intentionally targeting borrowers in poor or underserved areas with expensive high-cost loans is considered illegal under |
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TILA Homeowners Protection Act HOEPA RESPA The answer is HOEPA. HOEPA prohibits the intentional targeting of poor or underserved areas with expensive high-cost loans, which is a practice known as reverse redlining. |
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What action must a creditor take if it is discovered that the APR is outside of the range of tolerance? |
Provide disclosure of the corrected discrepancy and wait three business days before closing Keep records of the discrepancy for three years Adjust the APR and close the loan as scheduled Restart the seven-business-day waiting period after the new disclosure has been made The answer is provide disclosure of the corrected discrepancy and wait three business days before closing. When the APR is inaccurate, the APR must be re-disclosed to the borrower, and the loan cannot close for at least three business days from the re-disclosure date |
