All of the following features are prohibited for a qualified mortgage, except:
B. Adjustable interest rates
When must loan applicants receive an Adverse Action Notice if they do not qualify for a loan?
B. Within 30 days of the adverse action
Under ECOA, when is a notice concerning the right to obtain a copy of the appraisal due to a consumer?
D. Within three business days of loan application
HECM
HECM
If a creditor violates ECOA, how many years does a consumer have in which to take civil
action?
B. Five
What is the purpose of Regulation B?
D. To prohibit discriminatory treatment of credit applicants
As a result of provisions included in the Dodd-Frank Act, HOEPA was revised to extend its provisions to:
C. Open-end transactions and purchase money mortgages
The Dodd-Frank Act includes provisions that are intended to help struggling homeowners to obtain loan modifications by:
job loss or salary reduction
C. Requiring the CFPB to write servicing rules to facilitate loss mitigation efforts
When calculating finance charges in compliance with TILA, all of the following are
included, except:
D. Closing agent fees, when the borrower chooses the closing agent
Which of the following federal agencies has supervisory responsibilities for TILA
compliance?
D. CFPB
John and Jane Brown are co-owners of a property that is their principal residence, and are entering into a refinance transaction that is subject to rescission. John is provided with one copy of the Notice of Right to Cancel, and Jane receives none. What is their deadline for rescission?
C. Three years after closing
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.
D. A reasonable opportunity
Which of the following is not a duty assigned to the CFPB by the Dodd-Frank Act?
C. Granting and denying mortgage loan originator licenses
HUD is still responsible for writing rules and implementing which of the following acts?
D. The Fair Housing Act
For charges subject to a 10% tolerance, to the extent that the sum of the charges added together exceeds the sum of charges disclosed on the Loan Estimate by more than 10%:
whether the consumer will receive a refund
B. A consumer is eligible for a refund of the difference
For which of the following is the creditor permitted to charge more than it discloses in the Loan Estimate (i.e., there is no tolerance limitation) and still meet the good faith
requirement?
D. Prepaid interest
Respa is about, while Tila is about
Respa = illegal transactions
Tila = stealing
Who is ultimately responsible for ensuring that the Loan Estimate is provided?
C. The creditor
First lien mortgages are high-cost mortgages if their APR is?
A. 6.5 and subordinate of 8.5 above the average
HOEPA
What does it stand for?
What Regulation?
Is it under anything?
Who enforces it?
Why was it created?
The Home Ownership and Equity Protection Act
Reg Z
Under Truth in Lending Act (TILA)
CFPB
Protects loans with high interest rates and high fees (high-cost mortgages).
GLB Act
What is it?
What does it do?
What part is important?
Who runs it?
What regulation?
What rule?
Gramm-Leach-Bliley Act
Protecting privacy and confidentiality
Title V
CFPB
Regulation P
Safeguards Rule
Ability to repay is under what act?
Truth in Lending Act
Equity based lending is mostly about
red lining under HOEPA under TILA
The MAP Rule
What is it?
Regulation?
Who runs it?
Mortgage Acts and Practices Rule
Regulation N
Consumer Financial Protection Bureau (CFPB)
Freddie Mac
Federal Home Loan Mortgage Corporation
FHLMC: 28/36
FHA
What?
Who runs it?
Qualifying Rate
Federal Housing Administration
Department of Housing and Urban Development
31/43 & 33/45 new const.
VA
What?
Qualifying Rate
Veterans Administration
41 back only
Ginnie Mae
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GNMA
Fannie Mae
What?
Qualifying Rate?
Federal National Mortgage Association
FNMA:36
ECOA
What does it stand for?
Regulation?
What is it for?
What violates it?
The Equal Credit Opportunity Act
Regulation B - B fair
Discrimination
Redlining/Reverse violates ECOA
CFPB
What is it?
What does it do?
What created it?
What section?
Consumer Financial Protection Bureau
implementing and enforcing lending law
The Dodd-Frank Act
Title X
FTC
Federal Trade Commission
Regulation C
Act?
Purpose?
Who runs it?
Home Mortgage Disclosure Act
To identify urban areas where home financing is limited
CFPB
HMDA
Purpose?
Regulation
Who runs it?
Home Mortgage Disclosure Act
To identify urban areas where home financing is limited
Regulation C
CFPB
The Qualified Mortgage Rule
Term less than or equal to 30 years
no negative amortization
no balloon payments
no interest-only payments
SAFE Act
What is it?
What is it for?
Regulation?
Secure and Fair Enforcement Act
Mandates licensing and registration
Regulation G
HPA
What?
What is it for?
Who runs it?
Homeowners Protection Act
Requires the cancellation of PMI
CFPB
Regulation N
What is it?
Prohibits?
The Map Rule (Mortgage Acts & Practices)
Consumer Financial Protection Bureau (CFPB)
Misrepresentation in advertising of mortgage products
SAFEGUARD Rule
What is it part of?
What section?
Who enforces it?
Regulation?
The Gramm-Leach-Bliley Act
Protecting privacy and confidentiality
Title V
CFPB
Regulation P
TILA
What is it?
What is it for?
Regulation?
Who enforces it?
Applies to?
Truth in Lending Act
cost of credit, advertising, predatory lending, repayment ability
Regulation Z
CFPB
Only personal and family loans
TRUL
TRUL
FACTA
Fair and Accurate Credit Transactions Act
FCRA
Fair Credit Reporting Act
RESPA
What is it?
Regulation?
What is it for?
Real Estate Settlement Procedures Act
Regulation X
Kickbacks and unearned fees
Regulation X
Stands for?
Relates to?
Real Estate Settlement Procedures Act
Kickbacks and unearned fees
Reg Z
Act?
What
Who enforces it?
Applies to?
TILA the Godzilla- Truth in lending act
cost of credit, advertising, predatory lending, repayment ability
CFPB
Only personal and family loans
HMDA’s implementing regulation is:
C. Regulation C
The rule that established requirements for ensuring that a borrower can afford to take on a mortgage loan is known as the:
C. Ability to Repay Rule
Which of the following is included when calculating finance charges?
C. Interest
For the purposes of issuing a revised Loan Estimate, “changed circumstances” must involve a
change that caused estimated amounts to increase by at least:
A. 10%
This Rule applies to commercial communications used to market mortgage loan products and services to consumers.
B. MAP Rule
If a consumer opens an account online, the Gramm-Leach-Bliley Act states that what period of time constitutes a “reasonable opportunity” to opt out of information sharing?
B. 30 days
Lenders must report detailed information about loan transactions and demographic
information concerning borrowers. Which of the following laws creates that reporting
requirement?
B. HMDA
If a creditor denies an application for a first lien mortgage, a copy of the appraisal:
B. Must be provided within 30 days of the decision to deny
HOEPA would not apply to:
A. A bridge loan to finance construction
There is a ____ accuracy tolerance for amounts stated on the Loan Estimate and the actual
closing costs if the consumer is allowed to shop for his/her own settlement service provider.
B. 10%
The mandatory waiting period between issuance of disclosures and consummation may be
waived:
D. If the consumer requests a waiver due to a bona fide financial emergency
HOEPA was enacted as a part of:
D. TILA
A customer with an excellent credit score submits a loan application. When does ECOA
require that the applicant be advised of the status of the application?
D. Within 30 days
The penalties for paying or accepting an illegal referral fee are:
D. Fines of up to $10,000 and up to one year in prison
Finance charges always include which of the following?
B. Document preparation fees
Which of the following is not included in calculating the APR?
D. Escrow fees
The amount of the down payment, the amount of the finance charge, or the number of
payments needed are all examples of _______________ under TILA.
D. Trigger terms
Which of the following is the best example of a conventional loan that exceeds Fannie Mae
and Freddie Mac’s maximum loan limits?
B. A non-conforming loan
Which of the following loan programs does not require repayment as long as the owner lives
in the home?
B. Reverse mortgage
MIP would be used for which of the following?
D. An FHA loan
Examples of loans that are typically secured by a subordinate lien include all but which of the
following?
A. A purchase money mortgage
The Federal Housing Administration:
D. Insures loans
A borrower is a 65-year-old retiree with a fixed income and significant equity in his home.
Which of the following would be the best option to supplement his income?
A. HECM
Which of the following would detail the principal and interest payments due on a loan?
B. The amortization schedule
Which of the following best represents a loan that fails to meet Fannie Mae and Freddie
Mac’s underwriting guidelines?
A. A non-conforming loan
In order for a small creditor balloon payment mortgage to be a qualified mortgage, the small
creditor must hold the loan in its portfolio for:
C. Three years
Community Mortgage Bank (CMB) is a small creditor in a rural area. CMB holds the loans it originates in its portfolio until they are paid in full. CMB tries to limit its transactions to those for qualified mortgages. In a balloon payment QM transaction, the transaction must meet all of the following criteria, except:
B. The borrower must have a debt-to-income ratio of no more than 43%
conventional vs non conventional
Conventional=FNMA/FHLMC- not (FHA)Gov secured
Non-Conventional= FHA/VA
FERA
Year
What's it for?
The Fraud Enforcement and Recovery Act
2009
Fraud
This 2009 federal law was put in place to establish increased enforcement of anti-mortgage fraud laws.
A. The Fraud Enforcement and Recovery Act
An advertisement that states “Refinance and we can save you up to $300 per month!” is:
a. A violation of TILA
b. Not a violation of TILA if it provides information on APRs and payments with equal
prominence, as long as the statement is true
c. A TILA violation only if the loans are not available
d. A TILA violation because it targets struggling homeowners
b. Not a violation of TILA if it provides information on APRs and payments with equal
Advertising an attractive interest rate that a mortgage professional is not at liberty to offer is a
major ethical offense and a violation of:
C. Regulation Z
Prior to recent regulatory changes, “yield spread premium” was traditionally defined as:
a. A fee split between service providers for sharing settlement responsibilities
b. Income available to a settlement service provider who has entered into a legitimate
affiliated business arrangement
c. An amount paid by a lender to a loan originator for closing a loan at a rate higher than the rate for which the borrower qualifies
d. A fee paid by borrowers to lenders for lowering the note rate on their loan transaction
c. An amount paid by a lender to a loan originator for closing a loan at a rate higher than the rate for which the borrower qualifies
Conforming vs non-conforming
the big 4 wont buy non-conforming. They're jumbo loans.
Balloon calculations
Balloon calculations
What % adjustments may an appraiser make?
15% net and 25% gross
PMI VS MIP
PMI - PRIVATE so FNMA and FHLMC (both companies)
MIP - All FHA loans
How to calculate Bi-weekly and
semi monthly?
bi-weekly = ($/2)*52
Semi monthly = $*2
CLTV vs HLTV
Combined Loan to Value Ratio
High Loan to Value Ratio
21. Mortgage insurance premium:
D. Is paid upfront on all FHA loans
26. The ratio of the total balance of all mortgage liens against a property to the value is called:
B. CLTV
According to conforming guidelines, an appraiser may make net adjustments to comparables up to ____ in a residential appraisal.
A. 15%
Regulation G
Secure and Fair Enforcement Act
Mandates licensing and registration
MIP would be used for which of the following?
A. An FHA loan with a 3.5% down payment
Balloon payment qualified mortgages:
a. May only be made by depository lenders, such as banks
b. May only be made by non-depository lenders, such as state-licensed mortgage
bankers
c. May be made by small creditors in rural/underserved areas
d. May be made by all small creditors offering mortgage credit to finance home purchases in urban areas
c. May be made by small creditors in rural/underserved areas
A loan-level price adjustment (LLPA) is best described as:
a. Handling fees charged by GSEs when creditors sell loans to them
b. An added fee systematically charged by GSEs when purchasing loans made to
consumers with credit scores below 620
c. Premium pricing paid by GSEs to purchase loans made to highly creditworthy customers
d. GSE charges that result in higher interest rates when consumer eligibility or loan
features present a higher risk of default
d. GSE charges that result in higher interest rates when consumer eligibility or loan features present a higher risk of default
A real estate agent believes that his Hispanic client would probably prefer to live in more diverse neighborhood, and so he only shows her homes where there is a higher concentration of residents from Guatemala. This agent is guilty of
steering.
When a licensee ceases to engage in business and files a plan for withdrawal with the state regulatory authority, this is referred to as
surrender.
After investigating a charge of fraud against loan originator Mark, the state regulatory authority permanently withdraws his license. What is this known as?
revocation
Which change of information must be communicated by the mortgage loan originator in writing directly to the state regulatory authority rather than entered through the NMLS system?
name change
A borrower is buying a house for $150,000. She provides a down payment of 10%. If she pays two discount points, what is the total cost of the points?
2,700
ABC Bank receives a change of address request from consumer Jane. What requires the bank to follow up with Jane to verify the validity of the request?
Red Flags Rules
After the collection of statistical data, lenders are required to forward that information to the regulator by what date under the Home Mortgage Disclosure Act?
March 1.
According to the FCRA, when must a credit agency give a consumer a free copy of his credit report?
if the loan application is denied because of information in the report
According to the Fair Credit Reporting Act, An applicant is entitled to a free credit report if
information in that report resulted in adverse action. Denying credit for another reason does not entitle the consumer to a free copy.
Bob meets with a loan originator at XYZ Mortgage Company to inquire about loan options. His name is on the National Do Not Call Registry. XYZ can call Bob for
up to 12 months from the meeting date.
A telemarketer can be fined how much for calling someone registered on the National Do Not Call Registry?
$16,000
According to the Fair Credit Reporting Act, when is a consumer entitled to get a free copy of his credit score from a credit reporting agency (assuming there has been no fraud)?
FCRA provisions do not entitle consumers to a free copy of their credit score from a credit reporting agency.
ABC Mortgage transferred servicing rights of some of its mortgage loans to XYZ Mortgage. ABC must send a Servicing Transfer Statement to the affected borrowers ______ days before the effective date of transfer.
15
What is NOT a protected class recognized by the Fair Housing Act?
national origin
receipt of income from a public source
familial status
disability
receipt of income from a public source
Receipt of income from a public source is covered by ECOA, but is not mentioned in the Fair Housing Act.
What law prohibits discrimination in the sale and rental of a residential property on the basis of race, color, religion, handicap, sex, familial status or national origin? Equal Credit Opportunity Act
Community Reinvestment Act
Home Owners Equity Protection Act
Fair Housing Act
Fair Housing Act
Which is an example of steering?
Seller Oscar tells his listing agent to find only Caucasian buyer prospects.
Property manager Amy suggests Jake would be happier in a more diverse building.
Agent Tom tells homeowners that their property values will drop when a Puerto Rican family moves in.
Mortgage banker Brad refuses to make loans for a particular inner city neighborhood.
Property manager Amy suggests Jake would be happier in a more diverse building.
Steering relates to buyers or renters and is defined as channeling prospective buyers or renters to or away from specific neighborhoods.
What federal legislation requires the term "equal housing lender" to be used in any advertisement that is broadcast over the airwaves?
Fair Housing Act
Fair Credit Reporting Act
Truth in Lending Act
Equal Credit Opportunity Act incorrect!
Fair Housing Act
What is another name for blockbusting, an illegal activity, according to the Fair Housing Act?
discrimination
steering
redlining
panic selling
panic selling
What federal legislation requires that all printed advertising include the Equal Housing Opportunity logo?
Fair Credit Reporting Act Equal Credit Opportunity Act
Truth in Lending Act
Fair Housing Act
Fair Housing Act
Which is LEAST LIKELY to be an example of illegal flipping?
a group of sellers and buyers changing ownership of one property among them
a series of sales and quick resales
purchasing and remodeling a house and selling it for quick profit
an inflated appraisal
purchasing and remodeling a house and selling it for quick profit
What information would be EXEMPT from the privacy requirement of the Gramm-Leach-Bliley Act?
the loan amount that appears on a recorded mortgage
income information a consumer includes in a credit application
a consumer's credit score a loan originator gets from the credit bureau
a bank customer's account balance
the loan amount that appears on a recorded mortgage
What type of scam entails homeowners who are encouraged to refinance their property over and over until little or no equity remains?
reverse equity
property skimming
extreme lending
loan flipping
loan flipping
A mortgage loan originator is NOT required to provide a Loan Estimate if the borrower
applies for loans from multiple lenders.
is unlikely to be approved for a loan.
withdraws the application before the end of the three business-day period.
refuses to provide the government monitoring data required in the application.
withdraws the application before the end of the three business-day period.
A mortgage loan originator who supplies a revised Loan Estimate to a borrower must maintain the related documentation for at least
5 years.
180 days.
1 year.
3 years.
3 years.
Your applicant receives child support for her seven-year-old son. Can you gross up the child support payments she receives?
Yes, gross up all net income if it is verified and likely to continue for three years.
No, you can never gross up funds that are intended for a child.
No, you can only gross up income that is processed by a state agency.
No, you can never gross it up, but you can deduct half of the amount against the house payment for debt ratio calculations.
Yes, gross up all net income if it is verified and likely to continue for three years.
A loan on a borrower's primary dwelling where the APR exceeds at least 1.5% of the applicable average prime offer rate for a first lien loan is known as a
high cost loan.
HOEPA loan.
higher-priced loan.
predatory loan.
higher-priced loan.
Who does NOT share responsibility for enforcing the provisions of the National Do Not Call Registry?
Federal Communication Commission
Federal Trade Commission
Federal Reserve Board
State law enforcement
Federal Reserve Board
How soon after a borrower is provided with all required disclosures may a loan close?
on the 7th business day after the disclosures were provided
within 1 business day after the underwriter makes an approve decision
within 3 business days of the borrower's application
after a 3-business day waiting period from when disclosures were delivered
on the 7th business day after the disclosures were provided
The amended Truth in Lending Act requires a 7-business day waiting period before a loan can close.
At what point can a lender collect a loan origination fee?
three business days after mailing the required disclosures
when the loan closes
after the underwriter approves the loan
after the borrower signs the application
three business days after mailing the required disclosures
Which statement about loan origination fees on a Loan Estimate is FALSE?
The fee includes services performed by or on behalf of the loan originator.
Origination fees must be expressed as lump sum.
Lender and mortgage broker fees for the same transaction must be itemized.
The fee cannot change unless there is a changed circumstance.
Lender and mortgage broker fees for the same transaction must be itemized.
Actually, the fees for the lender and mortgage broker are not itemized; they must be shown as a lump sum.
Which act provides a specific definition of a nontraditional loan?
Mortgage Disclosure Improvement Act
Homeownership Equity Protection Act
Secure and Fair Enforcement Mortgage Licensing Act
Truth in Lending Act
Secure and Fair Enforcement Mortgage Licensing Act
In order for a junior mortgage on a primary residence to be considered a higher-priced loan, the APR must exceed the applicable average prime offer rate by at least
1.5%.
10%.
3.5%.
8%.
3.5%.
How long does a lender have to cure a tolerance violation?
within 10 business days after settlement
The borrower must be reimbursed at settlement.
within 1 business day after settlement
within 30 calendar days after settlement
within 30 calendar days after settlement
If a veteran’s loan goes into foreclosure, the government will:
C. Reimburse the lender up to the guaranteed amount of the loan