Proschools Nmls Flashcards

Front 1

Who is responsible for determining whether states are complying with the SAFE Act?

Back 1

Consumer Financial Protection Bureau

* Although the states have a duty to enact licensing standards that meet SAFE Act requirements, overall responsibility for interpretation, implementation and compliance with the SAFE Act was delegated to the U.S. Department of Housing and Urban Development. However, the SAFE Act was amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Effective July 21, 2011, the authorities and duties delegated to HUD are now delegated to the Consumer Financial Protection Bureau.

Front 2

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 requires that each state

Back 2

Impose a standard of at least 20 hours of prelicensing education, plus testing for loan originator licensing.

Front 3

The function of wholesale lenders is to provide

Back 3

Servicing and pricing

Front 4

The Federal Reserve System normally affects the supply of money in the economy by all of the following ways:

Back 4

-Changing reserve requirements.

-Adjusting the discount rate.

-Buying or selling bonds.

Front 5

When a broker originates, processes, closes and records a loan in its own name, but the loan is underwritten by, funded by and assigned to a secondary lender at the closing table, this is referred to as

Back 5

Table Funding

Front 6

NMLS stands for

Back 6

Nationwide Mortgage Licensing System and Registry

Front 7

In what year was Fannie Mae established?

Back 7

1938

Front 8

Which of the following is responsible for maintaining the NMLS?

Back 8

The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators

Front 9

The market where lenders and investors buy and sell existing mortgages or mortgage-backed securities is:

Back 9

-The secondary market

Front 10

When at least 25% of an applicant's income is from commissions, which of the following is included for employment verification?

Back 10

Two years' tax returns deducting non-reimbursed business expenses as reported on IRS form 2106

Front 11

For a sole proprietorship, the income, expenses and taxable profits are reported on:

Back 11

Schedule C attached to IRS form 1040

Front 12

The declarations section of the Uniform Residential Loan Application asks about bankruptcy. An applicant must answer "Yes" or "No" to whether bankruptcy has occurred during the past ___ years.

Back 12

7

Front 13

A borrower will usually be asked to provide monthly bank statements for the past ____ months.

Back 13

2

Front 14

Which of the following is true of the Uniform Residential Loan Application?

Back 14

It is FNMA form 1003 or FHLMC form 65, and it may be used for conforming, nonconforming, FHA and VA loans.

Front 15

A mortgage loan originator may supply information to the government regarding an applicant's ethnicity, sex or race for monitoring purposes based on visual observation:

Back 15

If the borrower chooses not to disclose it.

Front 16

If the borrower is self-employed, he may need to verify his income by providing which of the following?

Back 16

A year-to-date profit-and loss statement and tax returns

Front 17

Which IRS form authorizes the lender to obtain income tax information?

Back 17

8821 or 4506-T

Front 18

TILA provides that the APR advertised for a mortgage loan can deviate from the actual rate being offered to customers by:

Back 18

0%

Front 19

For purposes of completing FNMA form 1003, a first-time homebuyer is a person who is purchasing security property in which he will reside and who had no ownership interest (sole or joint) in a residential property:

Back 19

During the 3 years prior to purchasing the security property.

Front 20

Which of the following is considered a liquid asset in determining the applicant's ability to make the down payment for a mortgage loan?

Back 20

Funds in a money market account

Front 21

In the Assets and Liabilities section of the Uniform Residential Loan Application, "cash deposit" refers to

Back 21

Money on deposit with a real estate broker or closing agent toward the purchase of the property.

Front 22

Co-borrower information must be provided on the Fannie Mae 1003 when the co-borrower:

Back 22

Has income being used for loan qualification.

Front 23

If an applicant for a loan is a resident alien, he should have:

Back 23

Certificate of Resident Alien Status(Green Card)

Front 24

The Schedule of Real Estate Owned on form 1003 includes which type of properties?

Back 24

All properties currently owned by the applicant

Front 25

Property appraisals are used to determine:

Back 25

The market value of the property.

Front 26

A standard consumer credit report will always display:

Back 26

The consumer's name and Social Security Number

Front 27

In an appraisal, adjustments are made:

Back 27

To comparable properties

Front 28

In underwriting, among other factors, the borrower's capacity is analyzed. The borrower's capacity refers to:

Back 28

His ability to make the monthly loan payments.

Front 29

In underwriting, among other factors, the borrower's capacity is analyzed. The borrower's capacity refers to:

Back 29

His ability to make the monthly loan payments.

Front 30

When the originating lender sells the rights to collect the payments the price charged in the sale is called:

Back 30

A service release premium

Front 31

Which of the following is a claim of a creditor in a property?

Back 31

Lien

Front 32

The following are all appraisal approaches:

Back 32

-Income

-Sales comparison

-Cost

Front 33

Which of the following is true regarding the service release premium?

Back 33

It is not paid to the originating mortgage broker.

Front 34

Existing liens and mortgages are recorded in:

Back 34

Schedule B of a title commitment.

Front 35

For an appraisal of a residence, the minimum number of comparables required by FNMA is

Back 35

3

Front 36

The appraisal approach in which the replacement value is calculated is:

Back 36

The cost approach.

Front 37

A credit report does not show:

Back 37

Payments to creditors that have not been reported to a repository.

Front 38

The appraisal approach most suited to residential property is:

Back 38

The market data approach (aka sales comparison approach)

Front 39

The guidelines for the professional conduct of appraisers are set in:

Back 39

The USPAP

Front 40

The housing expense ratio and debt-to-income ratio for an FHA loan are:

Back 40

31% and 43%

Front 41

If Applicant A earns $1,600 biweekly and Applicant B earns $1,700 semimonthly, then:

Back 41

Applicant B earns about $70 less than per month than Applicant A.

Front 42

How may net cash flow from a property that is currently rented be calculated?

Back 42

At 75% of the current rent

Front 43

What is the front-end ratio given the following variables? Gross monthly income: $5,300 Monthly principal and interest: $1,020 Annual property taxes: $3,278 Annual Homeowner insurance: $650 Monthly auto payment: $295

Back 43

25%

Front 44

In the calculation of an applicant's income, a capital gain can be considered if:

Back 44

The borrower owns additional capital assets.

Front 45

A lender will count in full income from all of the following sources EXCEPT:

Back 45

Unemployment insurance benefits received due to loss of the job the borrower held for the past 10 years.

Front 46

Which of the following is true regarding the qualification of an applicant who receives child support and alimony?

Back 46

Child support income can be grossed up.

Front 47

A borrower has a gross monthly income of $10,000. His monthly debt payments are $1,000. If his monthly debt ratio is 30%, his total housing expense is:

Back 47

$2,000

Front 48

One way to ensure a borrower is capable of repaying his loan is to:

Back 48

Ensure the borrower's debt-to-income ratio is reasonable.

Front 49

A portion of each payment made on an uninsured amortized loan without an escrow account is applied to:

Back 49

Interest and principal

Front 50

A buyer offers $150,000 for a home. The property is appraised at $145,000. If he gets a conforming loan, he will need private mortgage insurance if the loan exceeds:

Back 50

$116,000. He needs PM is his loan exceeds 80% of the price or value, whichever is less. In this case, take 80% of $145,000, which is $116,000.

Front 51

A borrower obtains a $150,000, 30 year loan with a fixed rate of 6.5%. If he gets a 2/1 buydown in order to calculate the cost of the buydown he will have to calculate:

Back 51

Monthly payments for the loan at 4.5%, 5.5% and 6.5%.

Front 52

A borrower applied for a first loan of $240,000 and a piggyback second of $30,000 to purchase a $300,000 home. What is his LTV?

Back 52

-80%

The LTV is the relationship of the first loan to the purchase price: $240,000/$300,000=.80(80%)

Front 53

An applicant is interested in a 30-year home mortgage with 2 points at a fixed interest rate of 6%. The price of the house is $300,000 and the down payment will be 20%. What is the loan amount?

Back 53

-$240,000

=$300K x .80

=$240,000

*Points, interest and term of loan are irrelevant.

Front 54

A portion of each payment made on an uninsured amortized loan without an escrow account is applied to:

Back 54

-Interest and principal.

Front 55

If a buyer obtains a loan with a 1/1 buydown, this means:

Back 55

The rate on which the payment is computed will be reduced by 1% in the first and second years of the loan term.

Front 56

A basis point is:

Back 56

One-hundredth of 1%

Front 57

If a borrower had an outstanding loan balance as of April 1 of $549,287 with monthly loan payments of $4,020 at an interest rate of 5.75%, what would the outstanding loan balance be as of May 1?

Back 57

$547,899

Front 58

If a mortgagor pays $794.62 monthly to the mortgagee to be applied first to 7% interest and the balance to the principal, how much is applied to principal when the unpaid principal balance is $83,695.47?

Back 58

$306

Front 59

The principal balance on Doug Fish's home is currently $180,000. He has a 30-year loan at 9%. His next monthly payment of $1,500 will reduce his principal balance by:

Back 59

$150