US21FI12 Quiz Question Pool 04sep2013

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An investment bank pools mortgage loans and issues securities based on these pools. Which of the following statements abou
The federal legislation that prevents discrimination against loan applicants on the basis of race is
Mortgage-backed securities are purchased directly from secondary market agencies by all of the following, except:
When depository institutions lose funds to higher-yielding investments, this is called:
Under the Real Estate Settlement Procedures Act, lenders
Secondary market agencies such as Fannie Mae and Freddie Mac do all of the following except:
RESPA requires a lender to give the loan applicant a good faith estimate of the closing costs
Prior to the 2008 takeover of Fannie Mae and Freddie Mac, the federal government explicitly backed the securities issued by w
The purpose of the Home Mortgage Disclosure Act is to
All of the following statements are true, except:
A lender making a conventional loan would not necessarily comply with the underwriting guidelines of the major secondary m
Which federal law applies to all consumer credit and prohibits discrimination against loan applicants?
An agency will not purchase a loan if:
This practice, prohibited under the Fair Housing Act, refers to the refusal to make loans secured by property located in neighbo
Dealing with collection issues is an aspect of:
What federal law requires lenders to disclose information that would help detect instances of redlining?
Secondary markets agencies have successfully accomplished which of the following:
Which of the following is a secondary market agency?
For which type of loan are extensive additional disclosures required under the Truth in Lending Act?
Disintermediation is caused by changes in:
A home equity borrower has _____ days in which to rescind the loan after signing the loan agreement or receiving a disclosure
The long-term goal of the Federal Housing Finance Agency is to do what to the size and power of Fannie Mae and Freddie Mac
The Real Estate Settlement Procedures Act would apply to which of the following loans?
The only secondary market agency that does not purchase conventional loans is:
Which government-sponsored enterprises were placed into conservatorship in 2008?
Loans sold to a secondary market agency must:
Mortgage-backed securities are:
In 2005, Fannie Mae and Freddie Mac reversed policy and began buying significant numbers of what type of loans?
A real estate cycle can be affected by all of the following except:
The Truth in Lending Act is implemented through:
What 1999 legislation removed many barriers between commercial banks, investment banks, and insurance companies?
Mortgage brokers:
A lending institution has only about 15% of its assets invested in residential mortgages; most of its business involves lending fo
By the end of the S&L crisis, the majority of all residential loans were being originated by:
Because of their emphasis on savings accounts for small depositors, savings and loans are also commonly known as:
The most common alternative private source of lending to buyers is:
Long-term mortgage loans were introduced:
The introduction of the Federal Housing Administration and the mortgage insurance that it provided led to increased use of:
A residential lender is not a depository institution, but rather acts as a loan correspondent, by originating loans for large invest
An intermediary who does not originate loans but brings together lenders and borrowers for a commission is a:
What is required under the Community Reinvestment Act?
Prior to the Great Depression, home loans typically:
In contrast to wholesale lenders, retail lenders:
Many savings and loan associations faced insolvency as a result of questionable investment practices during the:
Which of the following would not be considered as contributing to the growth and subsequent collapse of the housing bubble?
A nonprofit organization provides banking services to the members of a large labor union. This organization would be known a
The bill that imposed new rules on savings and loan associations as a result of the S&L crisis was the:
An independent mortgage company engaged in mortgage banking
In a given year, the federal government receives $4 trillion in revenues, but incurs $4.2 trillion in expenditures. The $200 billion
Deductions for depreciation of income-generating property are also known as:
Which of the following is not a tool the Federal Reserve uses to implement federal monetary policy?
The interest rate charged by the Federal Reserve System to member banks who borrow funds to cover shortfalls is the:
Economic growth that is too strong and too fast is usually accompanied by:
Which of the following is not an aspect of the federal governmentâ€™s fiscal policy?
A commercial bank is required by the Federal Reserve to keep between 3% and 12% of its deposits either in its own vaults or o
How is the nine-member board of directors of each Federal Reserve Bank chosen?
In the early 1980s, the problem facing the economy that the Federal Reserve tried to resolve was:
Who â€œownsâ€ a Federal Reserve Bank?
To lower interest rates, the Federal Reserve would:
Which body consists of seven members appointed by the U.S. president for 14-year terms?
The federal funds rate is the:
How many Federal Reserve Districts and Federal Reserve Banks are there?
Because the Federal Reserve will provide short-term emergency loans to banks who can't meet reserve requirements, it is know
How is the federal funds rate set?
A married couple filing a joint return sells their primary residence for a profit. How much of their capital gain from the sale of t
In a deed of trust, the lender is referred to as:
In a real estate transaction, a promissory note is accompanied by a:
The interest paid on a real estate loan is almost always:
The mortgagor makes all of the following promises in a mortgage, except:
Â Borrowers are more inclined to refinance when:
A mortgage or deed of trust gives the lender:
To provide notice and establish the priority of a security interest, a lender must file a/an:
If the maker of a note is able to raise defenses against the original payee, the holder in due course:
The payments under a straight note are made up of:
A mortgage must contain all of the following, except:
A subordination clause is most likely to be included in a:
To be a holder in due course, a third party purchaser of a negotiable instrument:
Which of the following statements is not true?
When construction is finished, a construction loan is often replaced by a:
A lis pendens is recorded by the mortgagee in order to:
If the seller didn't pay off the mortgage, and the buyer didn't assume it:
With an adjustable-rate mortgage, the loan's interest rate:
Which loan-to-value ratio poses the least amount of risk to the lender?
The interest rate of an ARM is adjusted from time to time to reflect:
The interest rate of an ARM is adjusted:
The Posts are buying a house for $254,000. Its appraised value is $255,000, and the estimated closing costs come to $8,900. Th
Which of the following statements regarding mortgage insurance is true?
All of the following are features of an ARM, except:
The amount of the monthly payment on an ARM is adjusted according to the:
The purpose of a loan guaranty is to:
A life-of-loan cap:
When a borrower exercises the conversion option in an ARM, the new fixed interest rate is usually:
The Willards purchase a home with a $150,000 loan, at 4% interest. Over the next three years, market interest rates rise to 6%.
All of the following are advantages of a 15-year loan, except:
The purpose of a negative amortization cap is to limit the:
The Mitchells are financing the purchase of their first home with a 30-year ARM. It has an initial rate adjustment period of seve
The loan has a fixed interest rate and level monthly payments; a portion of each month's payment is applied to interest and the
Which loan repayment period would involve paying the least amount of interest?
A lender tells a buyer that the interest rate at the time of the loan application will be guaranteed for a certain period. This is kn
What federal law requires the disclosure of a loan's annual percentage rate in certain circumstances?
The relationship between the total finance charge and the total amount financed is expressed in a loan's:
For a buyer, which of the following is NOT an advantage of having a preapproval letter?
Which of the following statements is true?
The basic purpose of an origination fee is to:
The purpose of a settlement statement is to:
The Chavez family is buying a house for $200,000. They will pay an origination fee of one point, and they are also paying two d
Which of the following should a loan applicant take to the initial loan interview?
The relationship between the total finance charge and the total amount financed is expressed in a loan's:
Prior to beginning house hunting, a buyer contacts a lender and completes a loan application. The lender evaluates the applica
Which of the following is not a step in the closing process?
Which of the following will a loan applicant not necessarily need to provide during the loan application process?
When choosing a lender, buyers should do all of the following except:
The Jacksons are buying a home for $320,000, and they'll be required to pay a discount fee of three points for their $300,000 lo
Which of the following is NOT one of the steps involved in prequalifying a buyer?
An underwriter calculating a loan applicant's stable monthly income will usually count only a certain percentage of the applican
If a lender requires a borrower to have enough money left over after closing to cover a certain number of mortgage payments,
Jackie's loan did not receive a passing grade from the automated underwriting system. This means:
In analyzing a loan applicant's income to determine if he or she can afford the proposed loan, lenders are usually most concern
Automated underwriting is a/an:
A borrower has an unreliable source of income and had a foreclosure several years ago. He would most likely receive a loan fro
Which of the following persons would NOT likely use a subprime lender?
One of the basic components of creditworthiness is:
All of the following are AU risk classifications, except:
Which of the following loan applicants is most likely to choose a subprime lender?
Employment income is verified using:
Aside from bankruptcies, negative credit information ordinarily remains on an individual's credit report for:
Which of the following statements about Desktop Underwriter and Loan Prospector is true?
In order to determine whether a borrower is creditworthy, the underwriter considers the borrower's:
All of the following are considered potential liabilities of a loan applicant, except:
Which of the following is not likely to be considered an asset?
Income is considered durable if it can be expected to continue for at least:
For a residential loan transaction, an appraiser will be concerned with a property's:
Which principle of value states that the maximum value of a property is determined by how much it would cost to obtain a pro
A lender will base the maximum loan amount on the property's:
The loan amount will be larger than it should be, and the lender's risk of loss in the event of foreclosure will be greater, if an ap
Which of the following is the final step in the appraisal process?
Which of the following is NOT one of the three basic methods of appraising real estate?
An appraiser is using the sales comparison method. When evaluating a recently sold property to decide if it is a suitable compa
An appraiser is using a comparable that is generally similar to the subject property. However, the comparable has four bedroom
Which of the following is NOT a criterion for a sale under normal conditions?
The cost of constructing an exact duplicate of a building, using the same materials and construction methods but at current pri
A house has lost value because it has four bedrooms and only one bathroom, while most four bedroom houses have at least tw
An appraiser using the income method should try to determine the property's value using its:
A property sold rents for $1,000 per month. A neighboring property recently sold for $220,000, and rents for $1,100 per month
The process of analyzing the results provided by different approaches of value, in order to reach one final estimate of value, is
An informal version of an appraisal performed by a real estate agent, based on the sales comparison method, is a:
Which of the following is NOT a step in the sales comparison method of appraisal?
Under no circumstances should an appraiser using the sales comparison method select a comparable that sold more than:
In a balloon/reset mortgage:
Which of the following statements about private mortgage insurance is false?
Affordable housing programs involving conventional loans often have:
A buyer obtains a 2-1 buydown from the seller. This means that:
Which of the following is most likely to be treated as a compensating factor so that the loan applicant will be allowed to have in
A mortgage is amortized over a 30-year term, but the payments increase at annual intervals, with all of the payment increases
A loan that complies with Fannie Mae and Freddie Mac guidelines is known as a:
Buyer A and Buyer B are both buying single-family homes. Buyer A's borrowing $300,000 and Buyer B's borrowing $500,000. It
According to Fannie Mae, the two primary risk factors in qualifying an applicant are:
As a general rule, secondary financing in conjunction with a conventional loan:
Which of the following statements regarding private mortgage insurance is true?
Which of the following is an example of a conventional loan?
Private mortgage insurance is generally not required on conventional loans unless the loan-to-value ratio is over:
The seller is paying for a level payment temporary buydown that will reduce the buyer's interest rate by 2% for three years, low
A jumbo loan is a loan that:
George Wilson is applying for a 90% conventional loan. His parents are willing to give him some money to help him buy the hou
The benchmark for the housing expense to income ratio for conventional loans is traditionally:
The Riveras buy a house for $100,000, using an FHA-insured loan. The sellers offer to pay $8,000 in discount points in order to
Secondary financing from someone other than a family member is permitted in conjunction with an FHA loan if:
As a general rule, an FHA borrower's debt to income ratio should not exceed:
Which loan program has local maximum loan amounts, related to median housing costs in each area?
Margo Smith and John Perlman just bought a home with an FHA loan. When they sell the home, who could assume their loan?
A borrower obtains an FHA-insured loan through the 203(b) program. She may use the loan to purchase a:
The Federal Housing Administration is an agency within the:
An FHA loan was originated in 2001. Who may assume the loan?
The basic maximum for FHA loans not in a high-cost area is:
Which of the following would not be a recurring charge counted toward a borrower's debt to income ratio?
The Lenihans are buying a single-family home with an FHA loan. The FHA insurance will require:
The typical amount of reserves that an FHA borrower must have at the time of closing is:
The role of the FHA is to:
The Rubensteins obtain an FHA-insured loan for a 30-year term with a 90% LTV. They will pay an annual premium of:
Which of the following statements is true?
Which FHA program helps elderly homeowners increase cash flow through reverse mortgages?
Harriet takes out a 30-year FHA-insured loan with a 90% LTV in the year 2006. Her loan-to-value ratio reaches 78% in the year 2
Unless there are compensating factors, an FHA borrower's total debt to income ratio should not exceed:
An FHA borrower is:
The document issued by the VA indicating a property's appraised value is known as a:
Which of the following is NOT subtracted from a veteran's gross monthly income in order to determine that veteran's residual i
A veteran borrower's debt to income ratio exceeds the maximum limit imposed by the VA. Which of the following would NOT b
A veteran has a monthly income of $2,000. He has $200 in other recurring obligations. Each month, he has $170 withheld for f
The Hudsons take out a $100,000 VA-guaranteed loan to buy a house. They do not make any down payment. How much of a fu
A VA loan may be used to refinance;
A VA borrower's debt to income ratio may not exceed
A veteran borrower has a remaining entitlement of only $50,000. She plans to buy a $250,000 home. How large will her down
The guaranty amount for a VA loan between $144,000 and $417,000 is _____ of the loan amount.
What is the current maximum income limit for a VA loan borrower?
Which eligible veteran may use a VA-guaranteed loan?
Which of the following veterans would NOT be eligible for a VA-guaranteed loan?
An underwriter would be concerned with residual income when evaluating an application for:
A buyer using a VA-guaranteed loan who needs to make a down payment may need to use secondary financing if he doesn't ha
A veteran has a monthly income of $2,000. He has $200 per month in other recurring obligations. What is his maximum PITI ho
The most significant advantage of a VA-guaranteed loan is that:
A husband and wife are both eligible veterans and are buying a home together. Which of the following statements is true?
Which federal law applies to all consumer credit and prohibits discrimination against loan applicants?
This practice, prohibited under the Fair Housing Act, refers to the refusal to make loans secured by property located in neighbo
What federal law requires lenders to disclose information that would help detect instances of redlining?
Which of the following loans would be subject to Truth in Lending Act disclosure requirements?
Which of the following items would not be included in a total finance charge?
Which of the following items would be included in a total finance charge?
For which type of loan are extensive additional disclosures required under the Truth in Lending Act?
A home equity borrower has _____ days in which to rescind the loan after signing the loan agreement or receiving a disclosure
Which of the following phrases from an advertisement would trigger the full disclosure requirement of the Truth in Lending Ac
The Real Estate Settlement Procedures Act would apply to which of the following loans?
According to the Real Estate Settlement Procedures Act, a lender must give all of the following to a borrower within three days
Which of the following is not a predatory lending practice?
This type of predatory lending practice would involve collusion between a lender and an appraiser:
Who is the most likely target for a predatory lender?
This federal law requires lenders to make certain disclosures and avoid certain practices when making high-cost home equity lo
Which of these statements about predatory lending is true?
When a lender issues its annual report in compliance with the Home Mortgage Disclosure Act, which of the following items do
The Truth in Lending Act is implemented through:
This document, given within three days of a loan application (as required under the Real Estate Settlement Procedures Act), list
Which of the following determines continuing education requirements and dates for license renewal?
According to the SAFE ACT a mortgage lender is required to maintain capital of not less than $______ per licensed location:
Which of the following is not considered a Federal Banking Agency?
According to the SAFE ACT which of the following is NOT considered "prohibited conduct"?
According to the SAFE ACT a Mortgage Loan Originator is:
Any person who originates residential mortgage loans must show his or her NMLS unique identifier on all of the following EXCE
The respective state regulatory agency may impose penalties for each violation up to, and not exceeding what amount?
A background check performed by a state regulatory Agency is NOT permitted to include:
The Nationwide Mortgage Licensing System and Registry (NMLS&R) was developed and is overseen by:
All of the following are grounds for a state regulatory agency to revoke a license EXCEPT?
The penalties issued to mortgage loan originators by the regulatory agency are considered what type of penalties?
For a mortgage servicer, refusing to reinstate a delinquent loan after receiving a payment made to pay all past due amounts:
The SAFE Mortgage Licensing Act was never intended to:
After failing three (3) exams, an applicant must wait how long before taking the exam again?
The regulatory agency shall renew a mortgage loan originator's (MLO) license if all of the following are done EXCEPT:
NONE of the following are required to be licensed EXCEPT:
The SAFE Act was designed to do all of the following EXCEPT:
A loan originator who failed to renew his or her license and then applies to be licensed again must:
According to the SAFE ACT a mortgage loan originator is:
In order to renew your license, you must annually complete which of the minimum requirements pertaining to continuing educ
When advertising an MLO is required to include which of the following?
How long must an applicant wait to receive a new license if they have previously had their license revoked?
Of the 125 questions asked on the SAFE MLO exam, how many questions are related to the uniform state content?
It is permissible for an MLO to advertise the availability of specific interest rates, points, or terms if:
Which of the following are powers of a state regulatory agency?
If a state regulatory agency issues a cease and desist order, the order becomes effective:
Regulatory agencies do NOT have free and reasonable access to which of the following of licensees:
The disclosure of the MLO's license and NMLS issued unique identifier number is required in all of the following circumstances
In all references to the mortgage business NMLS stands for:
An example of prohibited conduct is:
A licensed loan originator who is an approved instructor for an approved continuing education course may receive credit for th
By passing the UST after July 1, 2013, you will have met the exam requirements for approximately how many states?Â
What does this definition refer to? _x000D_
Any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent cons
The state regulatory agency may do any of the following EXCEPT:
Which of the following information or data may the NMLS NOT share?
Surety bonds must be maintained by:
The Unique Identifier, issued by NMLS, does NOT have to be included in which of the following?
An interpretation of a Statute is known as a:
Background checks that are performed by state regulatory agencies do not include:
Which of the following are NOT powers/duties of the state regulatory agency?
The definition of a mortgage banker is:
If a test taker fails the licensing exam, how long must he or she wait before taking the exam again?
An applicant could still be eligible for a license under which of the following conditions?
Which of the following is required to be licensed?
A person operating without a license is subject to:
All of the following are considered a Federal Banking Agency EXCEPT:
The state regulatory agency is authorized to do all of the following EXCEPT:
From the following examples, select the one that represents a prohibited conduct.
Is the following statement true or false? According to the SAFE Act states should use NMLS issued unique identifiers for their lo
Is the following statement true or false? A registered loan originator does NOT need to maintain a unique identifier through the
What does the following refer to?
An individual who performs clerical or support duties at the direction of and subject to the supervision and instruction of a sta
A state-licensed loan originator means any individual who is all of the following EXCEPT:
Which of the following is NOT true of a unique identifier?
Is the following statement true or false? _x000D_
Every state SAFE Act requires those applying for a loan originator license to agree to a background check.
When may a loan originator sign a borrower's application or related documents?
Clerical or support duties of a loan processor or underwriter would include:
An independent contractor may engage in residential mortgage loan origination activities as a loan processor or underwriter w
One who assists a consumer in obtaining or applying to obtain a residential mortgage loan best describes a:
According to the SAFE Act which of the following MUST be conspicuously disclosed in ALL advertisements?
The definition of a depository institution includes any credit union.
Which of the following would NOT be considered an administrative or clerical task?
The definition that follows best describes what?
Any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent cons
Which of the following statements is TRUE regarding loan originators?
According to the SAFE Act the term "Nontraditional mortgage product" means:
S.A.F.E. is the short title for what mortgage licensing act of 2008?
Which of the following would NOT be considered a Federal Banking Agency?
Which of the following is NOT true of a loan originator?
The Nationwide Mortgage Licensing System and Registry ( NMLS&R) accomplishes all of the following except:
True or False? _x000D_
A loan processor or underwriter who does not represent to the public, through advertising or other means of communicating o
A state licensed loan originator who fails to maintain a valid license for a certain period or longer must retake the licensing test
A state-licensed loan originator may only receive credit for a continuing education course in the year in which the course is take
Which of the following is NOT a minimum standard for licensing as a state-licensed loan originator?
"Any activity that involves offering or providing real estate brokerage services to the public," is a definition for:
It is the NMLS, not the state regulator, who is authorized to require a person to cease and desist loan originating practices whe
Is the following statement true or false?
The term mortgage loan originator includes a person or entity that only performs real estate brokerage activities and is licensed
How long is the waiting period to take the NMLS approved licensing exam again after failing 3 consecutive times?
Which of the following best describes the content areas on the NMLS approved licensing exam?
Which of the following is NOT specifically listed as a course of study required for continuing education credit?
A state licensed mortgage loan originator who is approved as an instructor of an NMLS approved continuing education course m
If a loan originator fails to comply with the requirements of a temporary cease and desist order, the state regulatory authority m
A state-licensed loan originator may take the same approved course in the same or successive years to meet the annual require
It is the responsibility of the Director of Consumer Finance Protection to conduct an extensive study of the root causes of defau
The definition of a mortgage loan originator does NOT include a person or entity solely involved in extensions of credit relating
If an applicant does not initially pass a test, they may retake the test after waiting at least 30 days. How many total times may a
The NMLS issued unique identifier assigned to each loan originator is used for all of the following reasons EXCEPT:
The state regulatory authority may appoint an examiner to work on behalf of the regulator in making examinations of loan orig
Since by state law the state licensing agency has the authority to conduct investigations of any loan originator who is licensed o
What percentage of correct answers to questions must be achieved in order to have passed an NMLS approved licensing exam
The state regulatory authority has both summons and examination authority over any loan originator as may be relevant or ma
According to the SAFE Act, in order to meet the minimum annual continuing education requirements, at least how many hours
The AARMR is a national association of executives and employees of the various states who are charged with the responsibility
In general, there are two minimum standards for license renewal for state licensed loan originators. The first is that the loan or
According to the SAFE Act a potential licensee shall complete at least 20 hours of approved education in order to meet the min
Which of the following is NOT included in the SAFE Act?
What is the name of the national organization composed of state bank supervisors dedicated to maintaining the state banking
When taking a loan application a reasonable fee not to exceed $100 may be charged to consumers in order to cover the costs o
In order to maintain a loan originator license, the applicant must be covered by either a surety bond or a(n) __________ , or pa
An applicant for licensure will not be issued a mortgage loan originator license if at any time preceding the date of the applicati
Which of the following would NOT be considered a federal banking agency?
A state-licensed loan originator may not apply credits for education courses taken in one year to meet the continuing educatio
Loan originators who are licensed with tax exempt organizations must renew their MLO license:
An applicant for licensure must pass a written test which shall include questions on Federal and State law and regulation. Whic
What does the following describe?
An individual who, with respect to the origination of a residential mortgage loan, performs clerical or support duties at the dire
In order to be issued a loan originator license, an applicant must demonstrate financial responsibility, character and general fitn
Who is empowered with administrative authority to administer, interpret and enforce the SAFE Act, and promulgate rules or re
An individual does not need to be licensed if that person performs only purely administrative or clerical tasks on behalf of and
An individual is not considered to have taken a loan application by doing any of the following, EXCEPT:
Which of the following refers to , "an individual who performs his or her duties other than at the direction of and subject to the
In general, the term, "person" would refer to a natural person, however, the definition under the SAFE Act could mean all of th
While some states require fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or e
Expunged convictions still have an affect on the eligibility of an individual to receive a license as a loan originator.
The Safe Act mandates that an applicant for licensure must pass a written test which includes questions on laws and regulation
All states require fingerprints for submission to the Federal Bureau of Investigation, and any other governmental agency or enti
The SAFE Act was used to establish the NMLS.
It is required that periodic reports be sent to Congress regarding the effectiveness of the SAFE Act. Which of the following is NO
Each individual state has its own prohibited content information, however some prohibited acts are consistent in every state. W
According to the SAFE Act, which of the following would NOT be considered a prohibited act?
By taking and passing the UST, you will meet the exam requirements of how many states?
The unique identifier of residential mortgage loan originator must be clearly shown on all of the following EXCEPT?
The entire UST exam will consist of __ questions of which __ are graded?
Fill in the Blank. In the event that a cease and desist hearing is ordered, the notice instituting proceedings must fix a date for th
The SAFE Act makes no mention subprime mortgage lending.
NMLS has sole authority to require a person to cease and desist loan originating practices.
The SAFE Act prohibits states from establishing minimum standards for the licensing and registration of loan originators.
Each individual state has its own prohibited activities. However, some prohibited acts are consistent in every state. All of the fo
How many of the 125 National Test with UST questions are scored?
Which of the following is NOT required to be compiled in reports by loan originators?
The SAFE Mortgage Licensing Act was created to do all of the following EXCEPT?
Which one of the following is required to be licensed?
True or False? _x000D_
The Regulatory Authority may conduct investigations and issue subpoenas.
Who determines continuing education requirements and dates for licensing renewal?
No loan originator license may be revoked or suspended until after issuing a notice and a hearing.
For a loan originator to require a consumer to pay a referral fee is considered prohibited conduct.
Which of the following is NOT included in background checks by regulatory agencies?
Correct choice
4
3
2
3
1
3
4
4
2
3
3
1
1
3
4
3
4
3
1
3
2
2
2
4
1
3
3
4
1
1
2
2
1
2
4
3
1
4
1
3
4
2
1
3
3
1
2
4
2
1
4
1
3
3
3
4
2
2
1
3
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1
1
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1
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3
1
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3
3
1
3
3
1
2
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2
1
3
1
2
2
2
1
1
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2
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3
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3
1
3
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1
1
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1
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2
2
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2
1
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1
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2
2
1
3
2
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3
1
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2
2
1
3
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2
3
4
2
1
3
2
1
1
3
2
4
2
1
3
1
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2
1
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3
1
3
4
4
1
1
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2
2
1
2
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3
2
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2
2
1
3
2
4
1
1
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2
2
1
4
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1
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1
1
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2
1
2
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1
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3
3
1
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2
4
1
2
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4
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1
1
1
1
1
1
1
1
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1
1
1
1
1
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1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
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1
1
1
1
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1
1
1
2
1
1
1
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1
1
1
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1
1
Item 1
Pooling loans like this is known as 'warehouse' lending
Regulation Z.
charitable endowments
appreciation
are prohibited from paying kickbacks or referral fees.
guarantee mortgage-backed securities
at the time of application.
Fannie Mae
prohibit discrimination against individuals whose income is derived from public assistance
Fannie Mae and Freddie Mac are only allowed to invest in residential mortgage assets
because conventional loans cannot be sold on the secondary market
Equal Credit Opportunity Act
the lender failed to use the agency's uniform documents for the loan application
blockbusting
disintermediation
allowed for diversification of underwriting standards
FHA
Adjustable-rate mortgages
the local interest rates and investment yields
2
Hold steady
A construction loan from a commercial bank
Federal National Mortgage Association
Fannie Mae and Freddie Mac
be sponsored by an independent investor
collateral
Commercial loans
capital turnover
Regulation Z
Financial Institutions Reform, Recovery, and Enforcement Act
are also called mortgage bankers
commercial bank
commercial banks
credit unions
insurance companies
in response to the foreclosure epidemic that occurred during the Depression
adjustable-rate mortgages
mortgage company
loan correspondent
Depository institutions are prohibited from discrimination in loan decisions based on the race or national origin of borrowers
had a fixed interest rate
deal directly with loan applicants
1930s
ARMs with low introductory rates for short periods of time
credit union
Depository Institutions Deregulation and Monetary Control Act
brings together lenders and borrowers in exchange for a commission
federal debt
cost recovery deductions
Interest rates
discount rate
deficit spending
Debt financing
fiscal policy
Nine directors are appointed by the U.S. president
budget deficits
Individual investors who buy shares
decrease reserve requirements and buy government securities
Federal Advisory Council
percentage of deposits that lenders must maintain in their vaults or on deposit at a Federal Reserve Bank
12
lender of last resort
By each of the individual Federal Reserve Banks, with the approval of the Board of Governors
$1,000,000
the beneficiary
bond
accrued interest
to grant access easements to neighboring properties
a co-signor is required
increase interest rate periodically throughout the term of the loan
affidavit of ownership
may demand payment from the payee
interest only
an accurate legal description of the property
budget mortgage used in an affordable housing program
has purchased in good faith, and without notice of any defenses against the instrument
A deed of trust is an example of a security instrument
bridge loan
establish lien priority for the deed of trust
the buyer took title subject to the mortgage, and the lender can still foreclose on the property
cannot increase after the first five years of the loan term
80%
the amount the property value has appreciated or depreciated
at the beginning of the mortgage payment adjustment period
$220,590
The borrower must meet the insurer's underwriting standards
a discount rate
discount period
protect against fire and other hazards
limits the amount the interest rate may decrease over the life of the loan
2% above the loan's original adjustable rate
blanket loan
a lower interest rate
amount of interest paid over the life of the loan
10/1 ARM
fully amortized
15 years
annual percentage rate
Fair Credit Reporting Act
APR
It enables buyers to look for a home without having to complete a loan application
A loan's APR will always be higher than its quoted interest rate
cover the lender's overhead and costs incurred in making a loan
disclose loan-related charges that the buyer must pay at closing
$2,000
A copy of the prequalifying certificate signed by the real estate broker
ALV
preapproval
Inspection
Account numbers for all bank accounts
always choose the lender who offers the lowest interest rate
$3,000
Adding an amount for property taxes and insurance to the maximum principal and interest payment to find the maximum PITI
child support or alimony (spousal maintenance)
bonds
her application will automatically be denied by the lender
asset to liability ratio
computer program that analyzes applications and recommends approval or rejection
mortgage company
A borrower who needs a "super jumbo" loan to purchase a very expensive property
bankruptcy
"Approve"
A self-employed applicant who can't meet the income documentation requirements of other lenders
bank statements
five years
Loan that are not underwritten using these programs cannot be sold on the secondary market
net worth
car loans
Antique sofa
1 year
investment value
Anticipation
appraised value
overvalues a property
Apply appropriate methods of appraisal
Income method
Cost of replacing improvements
comparable's sale price downward
Both parties must be acting free of unusual pressure
replacement cost
deferred maintenance
contract rent
$200,000
balancing
competitive market analysis
Adjusting comparable sales prices
one month ago
the buyer has the option, after a certain number of years, of refinancing the loan or resetting the loan to the current market ra
Private mortgage insurance protects the lender against the risk of the buyer's default
accelerated payment plans
the buyer will always qualify at the bought-down rate, rather than the note rate
Her current housing expense is significantly lower than the proposed housing expense
biweekly mortgage
conforming loan
allowed a higher loan-to-value ratio than Buyer A
cash reserves and loan-to-value ratio
is permitted only by subprime lenders
Cancellation of PMI does not affect the borrower's monthly mortgage payment
A loan made by Atlantic Bank and insured by a private mortgage company
80%
$2,625
exceeds $275,000
No; gift funds cannot be used for the down payment when the LTV is over 80%
28%
$0
the borrower cannot qualify for the loan without secondary financing
29%
Conventional
Any buyer (owner-occupant or investor) who meets the FHA's standards
commercial property
Department of Health and Human Services
A buyer who will occupy the property as a primary residence
125% of the area median house price
A car loan with two years remaining
an annual premium
FHA loans do not require reserves
insure loans
0.25% of the loan balance, including financed UFMIP
An FHA borrower must make a minimum cash investment of at least 5% of the sales price
Section 203(k)
2009
28%
not allowed to pay discount points
Certificate of Eligibility
Federal income tax withheld
The veteran has a full entitlement available
$1,045
$1,250
a conventional, FHA, or VA loan
31%
$12,500
25%
$109,435
A veteran purchasing a commercial property
A veteran who served 10 years in the National Guard
a 95% conventional loan
The buyer must have a full guaranty entitlement available
$520
all veterans are guaranteed a loan regardless of income or credit history
Only one of the spouses may use his or her entitlement for the loan
blockbusting
A loan for the purchase of a strip mall
Appraisal fee
Appraisal fee
Adjustable-rate mortgages
2
$250,000 cash price
A construction loan from a commercial bank
a booklet about settlement procedures
Blockbusting
balloon payment abuse
A landlord with a number of investment properties
Fair Credit Reporting Act
Most predatory lending takes place in the subprime market
The dollar amount of the loan
Regulation Z
good faith estimate of closing costs
The relative state regulatory agency as required by the SAFE Act
This is determined by the relative state regulatory authority and is a function of the dollar amount of loans originated.
The Consumer Financial Protection Bureau (CFPB)
Making a costly error
any person who for compensation places a loan within this state for others
On all social media pages
$25,000
Individual checking or savings account information
The Conference of State Bank Supervisors ( CSBS) and The American Association of Residential Mortgage Regulators (AARMR)
Not completing Continuing Education before the due date
Civil
Is prohibited
keep mortgage rates low by establishing licensing standards
6 months
The originator passes an annual exam
Independent contractors who engage in loan origination activities as a loan processor or underwriter
Reduce fraud by creating an enforcement agency in each state that prosecutes unethical activity
Complete the continuing education requirements for the last year in which the license was held prior to issuance of a new or re
An individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan fo
3 hours of federal law, 2 hours of ethics, 2 hours of non-traditional mortgage products and 1 hour of elective content
The MLO's unique identifier issued by the NMLS
Once revoked the former MLO is not eligible for license in the future.
25 questions
The terms advertised are currently available from the MLO.
Conduct examinations of an MLO's books and records
At time the licensee is served the cease and desist order
State Tax Returns
On personal e-mails to family and friends as well as posting on social media
Nationwide Mortgage Licensing System
Accepting fees from a consumer in the MLO's own name rather than the employer
Two hours of credit for every one hour taught in an approved course
30 states
A residential mortgage loan
Ignore education requirements for licensing

Credit scores
all licensees, unless excluded by the state regulatory agency
E-mails
Rule
Medical history
Issue warrants for arrest
A person who engages in the mortgage loan business by directly or indirectly originating and closing mortgage loans with its ow
Thirty (30) days
The applicant pled guilty to a felony in a domestic court eight years prior to their application.
An individual who negotiates a mortgage loan for another for compensation
Civil financial penalties
NMLS
Make arrests of loan originators for violations of the SAFE Act
Refusing to issue a satisfaction of mortgage
0
0
A loan processor
An employee of a depository institution

A unique identifier can be used to access comprehensive employment history of mortgage loan originators.
Never
Data entry on a file
A mortgage loan originator

The NMLS issued unique identifier number
Working to bring borrowers and lenders together to mortgage a property
Residential mortgage loan
All must be either licensed or registered as a loan originator

Any mortgage product other than a 30-year fixed rate mortgage
Secure and Fair Enforcement
The Central Intelligence Agency
A loan originator performs purely administrative tasks.
Provides tracking of the number of loans a loan originator writes.
5 years
The applicant has demonstrated financial responsibility through maintaining a credit score above 640 points.
Real estate brokerage
6 months
Federal and state laws and regulations, including instruction on fraud, consumer protection, the nontraditional mortgage mark
1 hour of state real estate regulations
$25,000
1
1
3 times
To provide personal loan originator information to the general public
Examiners may administer oaths and affirmations, make examinations and examination reports.
Being absent during an examination
75%
8 hours
American Association of Residential Mortgage Regulators
The licensee meets the annual continuing education requirements of the state
6 hours of training related to Fair Housing laws
The authority to issue revised credit scores and personal financial information under the SAFE Act
Conference of State Bank Supervisors (CSBS)
Acceptable net worth
The Director of the Office of Credit
Annually
Calculating interest rates
Loan Processor or Underwriter
Current outstanding judgments as a result of medical expenses

The Director (Secretary)
Collects detailed identifying information and loan application information from the prospective borrower on behalf of that lend
Independent Contractor
A city, county or state government
Title Insurance policies
1
To keep interest rates low and encourage home ownership
Conducting any business covered by the S.A.F.E. Act without holding a valid license as required under this Act, or assist or aide
Causing or requiring a borrower to obtain property insurance coverage
Any current or future states that adopt the UST
The office front door
125/115
30/60
Obtaining a loan on real property for a friend

115
Loan types by each MLO
Ensure that ALL loan originators have been licensed
Independent loan processor contractors who engage in loan origination activities
The state regulatory agency
Marital history
Item 2
The bank may not do this; by law, only secondary market agencies may issue mortgage-backed securities
RESPA.
individual investors
capital turnover
may pay real estate agents a fee for referring loan applicants to them.
issue mortgage-backed securities
before closing.
FHA
require that lenders disclose information that may provide evidence of redlining.
Fannie Mae and Ginnie Mae purchase FHA and VA loans
because underwriting is not required for conventional loans
Fair Housing Act
the loan is conventional
puffing
loan guaranty
Fair Housing Act
eliminated the need for mortgage brokers
FIRREA
FHA loans
the local supply of mortgage funds
3
Reduce
A loan from a commercial bank used to purchase an existing single-family home
FNMA
FHA and VA
be underwritten by the secondary market agency
guaranties
Home equity lines of credit
economic factors
the Home Mortgage Disclosure Act
Financial Services and Modernization Act
arrange loans on behalf of wholesale lenders
credit union
mortgage companies
people's banks
real estate investment trusts
in response to the savings and loan crisis
interest-only mortgages
mutual savings bank
mortgage banker
Depository institutions must allocate a certain percentage of all loans they make to low-income borrowers
required refinancing or a balloon payment after five years
focus on conventional loans
1950s
Increased use of subprime lending
loan correspondent
is affiliated with a commercial bank
federal deficit
exclusion of gain
Open market operations
federal funds rate
deflation
Government spending
open market operations
Six directors are appointed by the Federal Reserve Board of Governors and three are elected by stockholders
high and volatile interest rates
Member commercial banks within the district
decrease reserve requirements and sell government securities
Federal Open Market Committee
prevailing rate charged to mortgage borrowers by commercial banks
14
primary market lender
By the Federal Advisory Council
$100,000
the grantor
cashier's check
compound interest
to keep the property insured against fire and other hazards
a large down payment is required
the right to enter the property
estoppel letter
may not receive payments on the note
interest only for the first payment period and principal only after the first payment period
an identification of the promissory note
loan for the purchase of a second home
may buy the instrument for less than market value
A lender cannot enforce a promissory note without a security instrument
nonrecourse mortgage
provide public notice of the foreclosure action pending against the property
the lender can choose whether to sue the seller or the buyer in case of default
is adjusted whenever the index rate changes
85%
the cost of money
at the end of the rate adjustment period
$228,600
The insurance covers losses due to fire or other hazards
a note rate
mortgage payment adjustment period
protect the borrower from a deficiency judgment
limits the amount the interest rate may increase each adjustment period
the index rate at the time of conversion
hybrid ARM
borrower equity builds up quickly
amount of the borrower's monthly payments
3/1 ARM
negatively amortized
20 years
loan guaranty
CRV
It helps streamline the closing process
A loan's APR will always be lower than its quoted interest rate
discourage the borrower from backing out of the transaction before closing
disclose the commission that will be paid to the broker who arranged the loan transaction
$3,000
A copy of the purchase and sale agreement, if the applicant has already entered into one
APR
predetermination
Issue of title insurance policy
Address and tax information for the house being purchased
consider obtaining financing from the financial institution where they do their banking
$8,000
Applying an appropriate income ratio to the buyer's monthly income to find the maximum PITI payment
income from a rental property
impounds
her application will be underwritten manually by the lender
debt to income ratio
manual underwriting system
savings and loan association
A developer who needs funds to construct a shopping mall on a large parcel of land
foreclosure
"Caution"
An applicant who has only 5% of the purchase price available for a down payment
income tax returns
seven years
The primary purpose of the programs is to make loan purchase decisions
part-time job he has held for one year
credit card balances
Car
3 years
liquidation value
Conformity
appraised value or sales price, whichever is less
undervalues a property
Define the problem
Quantity survey method
Date of the sale
comparable's sale price upward
Both parties must be fully informed of the property's attributes and deficiencies
reproduction cost
economic obsolescence
economic rent
$220,000
interpolation
conditional appraisal
Determining whether the comparable sales took place under normal conditions
one year ago
the buyer will have a fixed interest rate for several years, and then the interest rate will be adjusted according to an index every
Private mortgage insurance typically covers only 25% to 30% of the loan amount
bi-weekly payments
the interest rate will be reduced by 1% in the loan's first year, and 2% in its second year
She's applying for an ARM
graduated payment mortgage
conventional loan
qualified with more lenient standards than Buyer A
credit history and debt-to-income ratio
may not exceed 5% of the sales price or appraised value, whichever is less
PMI is automatically canceled once the borrower has made the payments reliably for two years
A loan made by Edge Mortgage Company and insured by the FHA
90%
$3,000
exceeds the conforming loan limits set by Fannie Mae and Freddie Mac
Yes, as long as Wilson is still paying at least 5% of the sales price out of his own resources
36%
$2,000
the secondary financing is obtained from an institutional lender (not from the seller)
36%
FHA-insured
Any buyer who agrees to release the sellers from liability
duplex where she will occupy one of the units
Department of Housing and Urban Development
A buyer who will use the property as a vacation home
175% of the conforming loan limit
A student loan with four payments remaining
an upfront (one-time) premium that must be paid in cash at closing
one month's reserves
originate loans
0.25% of the loan balance, not including financed UFMIP
It is more difficult to qualify for an FHA loan than a conventional loan
Section 234(c)
2011
31%
not required to make a down payment
Certificate of Reasonable Value
Installment debts with fewer than 10 payments remaining
The veteran has an excellent long-term credit history
$1,250
$1,500
any type of loan, but the borrower must use additional entitlement
36%
$200,000
33%
$78,358
A veteran purchasing a duplex for investment purposes
A veteran who served 12 months of active duty during the late 1980s
a VA-guaranteed loan
The buyer must have enough income to qualify based on payments for both loans
$620
it does not require a down payment
The husband and wife may combine their full guaranty entitlements
Fair Housing Act
puffing
Fair Housing Act
A loan to a corporation that develops new subdivisions
Interest
Credit report fee
FHA loans
3
"Buy at 6.125% APR"
A loan from a commercial bank used to purchase an existing single-family home
a good faith estimate of closing costs
Equity stripping
loan in excess of value
A subdivision developer
Fair Housing Act
Most subprime lenders engage in predatory lending practices
The geographic location of the property
the Home Mortgage Disclosure Act
mortgage servicing disclosure statement
The Governor of the state
$50,000
The Office of Thrift Supervision
Negligent behavior
an individual whose job is to function only as a loan processor
Forms for residential mortgage loan applications
$50,000
Individual experience
The Conference of State Bank Supervisors (CSBS) and the U.S. Senate
Material misstatements on an application for licensure
Criminal
Is permitted if the loan is over 180 days late.
increase integrity in the residential mortgage loan market
90 days
The originator satisfied the continuing education
An individual negotiating a residential mortgage loan with or on behalf of an immediate family member
Reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgag
Receive a new unique identifier from the NMLS.
A person who only handles clerical or data entry functions
2 hours of federal law, 2 hours of ethics, 2 hours of non-traditional mortgage products and 2 hours of elective content
An e-mail address of the MLO
1 year
10 questions
The MLO has offered those terms in the past.
Arrest
At the time the state regulatory agency issues the order
Books
When loan applicants pay a fee
National Mortgage Licensing Standards
Accepting fees in the name of the Loan Originator's employer
One hour of credit for every one hour taught in an approved course
15 states
A line of credit specifically on an assumable residential loan
Deny a license
Employment history
licensees who will originate less than $10,000,000 in loans per year
Advertisements
Statuette
A credit report
Conduct Investigations of licensees
A person who engages in the mortgage loan business by directly or indirectly negotiating or placing mortgage loans for others
Fifteen (15) days
The applicant has previously had a loan originator license revoked.
Any person solely involved in developing timeshare plans
Criminal court proceedings in federal court
The Board of Governors of the Federal Reserve System
Establish licensing rules and regulations
Not making and filing two original copies of a loan application
1
1
A real estate broker
A loan originator
A unique identifier is a number issued by the NMLS.
When the borrower has given their consent

Offering or negotiating loan rates or terms
A loan processor
The name of the business as registered with the Secretary of State
Gathering information from a borrower
Personal property mortgage loan
All must be registered as a loan originator

Any mortgage product other than a 30-year fixed rate or variable rate mortgage
Secure and Fair Environment
Comptroller of the Currency
A loan originator offers or negotiates terms of a residential mortgage loan for compensation or gain.
Providing uniform license applications and reporting requirements for State-licensed loan originators.
3 years
The applicant has never had a loan originator license revoked.

Loan originating
1 year
Federal laws, state laws, and ethics
3 hours of federal laws training
$10,000
0
0
6 times
To facilitate electronic tracking and uniform identification of loan originators
Examiners have the responsibility of paying assessments to the Director in conjunction with carrying out examinations.
Removing information
70%
10 hours
American Association of Real Estate Mortgage Regulators
The licensee has closed at least three mortgage loans in the current calendar year
3 hours of Federal law and regulations
The authority to issue licenses to conduct business under the Act
Congress of State Bank Supervisors (CSBS)
Employer's letter of credit/recommendation
The Board of Governors of the Federal Reserve System
Tax exempt organizations only employ registered loan originators, so renewal is not required
Instruction on fraud
A 1099 paid Independent Contractor
A pattern of seriously delinquent accounts within the past three years

The Secretary of State
Helps a prospective borrower fill out an application by explaining the contents of the application and where particular informa
Loan Processor
Association
Consumer protection
0
To strengthen consumer protections
Making disclosures as required by the S.A.F.E. Act and any other applicable state or federal law including regulations thereunde
Making a payment, threat or promise, directly or indirectly, to any person for the purposes of influencing the independent judg
All states after July 1, 2013
Any other documents as established by rule, regulation or order
100/80
15/30
Directly or indirectly employing any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any pe
125
Accounting compilations
Enhance integrity in the residential mortgage loan market
An individual negotiating a residential mortgage loan with or on behalf of an immediate family member
The Mortgage Bankers Association
Administrative, civil, or criminal findings by a governmental agency

Item 3
The investment bank will also service the loans
the Equal Credit Opportunity Act.
life insurance companies
disintermediation
must disclose the APR of the loan they are offering to make.
issue private-label securities
within seven days of application.
Freddie Mac
require that lenders disclose the total finance charge and annual percentage rate.
Ginnie Mae has a greater impact on the mortgage industry than Fannie Mae and Freddie Mac
if the lender intended to keep the loan in portfolio
Home Mortgage Disclosure Act
the loan is for the purchase of a condominium
redlining
loan origination
maintained a steady market interest rate nationwide
FNMA
Interest-only loans
the national interest rates and investment yields
4
Sharply increase
A loan from a commercial bank used to purchase vacant land
Freddie Mac
Ginnie Mae and FHA
comply with the agency's underwriting rules
investment instruments
Investor loans
employment levels
the Home Ownership and Equity Protection Act
Glass-Steagall Act
make only conventional loans, not FHA or VA loans
mortgage company
savings and loan associations
savings banks
sellers
in the 1970s, as an alternative to adjustable-rate mortgages
mortgages with balloon payments
mortgage broker
Depository institutions must lend to low-income borrowers without consideration for their ability to pay
were fully amortized
generally work with loan correspondents
1980s
Stricter underwriting standards
mutual savings bank
Garn-St. Germain Depository Institutions Act
is subject to the same regulations as commercial banks
reserve requirement
installment sales
Reserve requirements
open market rate
inflation
Setting key interest rates
reserve requirements
Six directors are appointed by the U.S. president and three are elected by stockholders
low savings rates
The Board of Governors
increase reserve requirements and buy government securities
Federal Reserve Board of Governors
rate charged by the Federal Reserve for short-term loans to lenders facing a shortfall in funds
7
secondary market agency
By the Federal Reserve Board of Governors
$250,000
the trustee
negotiable instrument
simple interest
to maintain the structures in good repair
market interest rates drop
the right to foreclose
financing statement
must be paid by the maker
principal and interest
the amount of the down payment
loan for the purchase of vacant land, when construction is planned
may purchase the instrument in bad faith
A security instrument makes the property the collateral for a loan
package mortgage
trigger the right of statutory redemption
the sale extinguished the mortgage and the lender has no further rights in regard to the property
may increase or decrease during the loan term
90%
the index
every time the index rate changes
$229,500
The insurer agrees to reimburse the borrower for interest paid on the loan
a rate adjustment period
principal adjustment period
protect the lender from foreclosure loss
limits the amount the interest rate may increase over the life of the loan
the market rate at the time of conversion
package mortgage
higher monthly payments
total amount the borrower can owe above the original loan amount
5/1 ARM
partially amortized
30 years
lock-in
Real Estate Settlement Procedures Act
LTV
It provides assurance to the seller that a financing contingency won't be a problem
A no-fee loan will have the same APR as its quoted interest rate
increase the lender's yield on the loan above the interest rate
disclose the true costs of financing, such as the loan's annual percentage rate
$4,000
A good faith estimate of closing costs
ARV
prequalification
Preparation of settlement statement
Name and address of employers for previous two years
seek referrals from friends and family members who recently bought homes
$9,000
Calculating the maximum loan amount based on the interest rate and the maximum principal and interest payment
social security or welfare benefits
reserves
the lender will approve her loan application
gap ratio
system of underwriting that uses index tables to rate the risk of default
subprime lender
A doctor with a credit score of 750 but who, because of student loans, has a very high debt-to-income ratio
seasonal income
"Deny"
An applicant whose funds for closing include gift funds
verification forms sent to the employer
ten years
The programs are specifically designed to underwrite FHA and VA loans
rental history
phone bills
Mixing bowls
4 years
market value
Contribution
assessed value
uses the income approach to value
Issue the appraisal report
Replacement cost method
Location of the property
subject property's value downward
The buyer must be paying cash for the property
square foot cost
external obsolescence
indexed rent
$240,000
reconciliation
final value estimate
Finding the cost per square foot of replacing improvements
six months ago
the buyer will make interest-only payments for a certain number of years, then begin making amortized payments
The buyer will always pay a single life-of-the-loan premium at closing
buydown requirements
the interest rate will be reduced by 2% in the loan's first year, and 1% in its second year
She's been at her job for at least two years
growing equity mortgage
nonconforming loan
required to pay a higher interest rate than Buyer A
credit history and loan-to-value ratio
must be partially amortized
PMI is required on a conventional loan throughout the loan term
A loan made by First Federal Savings and guaranteed by the VA
95%
$4,500
exceeds the FHA's maximum loan amounts for the area in which the property is located
Yes, as long as Wilson is still putting at least $10,000 of his own money into the purchase
41%
$6,000
the secondary lender waives the right to foreclose
43%
GEM
Anyone who intends to occupy the home as a primary or secondary residence
ten-unit apartment complex
Federal Reserve System
An investor who will not occupy the property
65% of Freddie Mac's general conforming loan limit
Alimony payments
an upfront premium that may be paid in cash or financed
three months' reserves
purchase loans
0.5% of the loan balance, including financed UFMIP
Mortgage insurance is required for the life of all FHA loans
Section 251
2016
36%
required to make a minimum cash investment, which doesn't include closing costs, discount points, or prepaid expenses
Compensating Value
Proposed housing expense
The veteran is making a down payment
$1,800
$2,000
only another VA loan
41%
$50,000
40%
$88,250
A veteran purchasing a duplex where he will live in one of the units
A veteran who served 150 days of active duty during the Vietnam War
an FHA-insured loan
The second loan may not restrict the borrower's ability to sell more than the VA loan does
$660
the maximum loan amount is high
The husband and wife may use one-and-a-half of their two combined entitlements
redlining
A loan to an individual for $1,000,000 for the purchase of a residence
Origination fee
Mortgage insurance premium
Interest-only loans
4
"Call now for a low down payment loan"
A loan from a commercial bank used to purchase vacant land
a mortgage servicing disclosure statement
Fee packing
negative amortization scheme
A young homeowner with a good credit history
Predatory lending occurs primarily in connection with refinancing and home equity loans, not home purchase loans
The race, ethnicity, sex, and annual gross income of the borrower
the Home Ownership and Equity Protection Act
Truth in Lending disclosure
The NMLS Chairman
$100,000
The National Credit Union Administration
Not acting in good faith
a person involved in selling or developing timeshares
All residential mortgage loan applications
$1,000
Criminal history
The American Association of Residential Mortgage Regulators (AARMR) and the U.S. House of Representatives
Conviction of any crime of moral turpitude
Compulsory
enhance consumer protections
120 days
The originator paid the fee to renew
Any person who acts as a mortgage broker fewer than 5 times within any 2 consecutive months
Establish and maintain a nationwide mortgage licensing system and registry
Write a letter to the regulatory agency explaining the reason for failure to maintain a license and then requesting a new license
A person who only performs real estate brokerage activities and is not compensated by a lender, a mortgage broker, or other lo
3 hours of federal law, 2 hours of ethics, 1 hours of non-traditional mortgage products and 2 hours of elective content
A list of the types of residential loans the MLO handles
3 years
15 questions
Competitors offer similar rates, points, or terms.
Access to the FBI criminal database
After the licensee has had 10 days to respond to the order
Records
On residential mortgage loan application forms
Nationwide Multiple Listing Service
Accepting fees payable to 3rd party providers
One hour of credit for every two hours taught in an approved course
All 50 states
A loan on a multifamily dwelling or small commercial building
Suspend a license
Disciplinary actions against mortgage loan originators
licensees who will originate at least 10,000,001 to $20,000,000 in loans per year
Business cards
Bill
Administrative findings by a governmental agency
Conduct examinations of licensee's books and records
A person who only performs real estate brokerage activities unless the person is compensated by a lender, a mortgage broker,
One (1) week
The applicant was currently incarcerated for a felony offence.
A staff loan processor or underwriter (not contracted)
CSBS disciplinary actions
The Comptroller of the Currency
Issue, revoke, deny, suspend, and condition licenses
Paying compensation to a licensed individual
A mortgage loan originator
Not an employee of a subsidiary that is regulated by the Farm Credit Administration

A unique identifier is assigned by protocols established by the NMLS.
When the individual who needs to sign cannot do so

Counseling consumers about residential mortgage loan rates or terms
A real estate broker or salesperson

The company website URL (address)
Processing a loan application
Nontraditional mortgage loan
All must be licensed as a loan originator

Any mortgage product other than a 15-year fixed rate mortgage
Safe and Fair Enforcement
Board of Governors of the Federal Reserve System
A loan originator has a unique identifier issued by the NMLS.
Providing a comprehensive licensing and supervisory database as well as providing increased accountability and tracking of loa
2 years
The applicant has not been found guilty of a felony in the 7-years preceding the date of application for licensing.
Loan processing
4 months
Federal law, mortgage origination, and ethics
2 hours of ethics
$50,000
Once
To allow public access to loan originator licensing information
Examiners have legal authority to order loan originators to be present in court ordered hearings.
Mutilating or destroying information
77%
6 hours
American Academy of Residential Mortgage Regulators
The licensee has joined a group, such as NAMB or MBA
3 hours of ethics training
The authority to deny, suspend, or revoke licenses issued under the Act
Committee of State Bank Supervisors (CSBS)
High credit score
The National Credit Union Administration
Every 3 years
Consumer protection
Mortgage Loan Originator
Foreclosures within the past three years

The Governor
Describes for a prospective borrower the loan application process without a discussion of particular loan products.
Mortgage Loan Originator
Limited liability company
Fair lending issues

To streamline communication among those involved in residential mortgage loan origination and processing
Failing to comply with the S.A.F.E. Act or rules or regulations promulgated under this Act, or failing to comply with any other st
Collecting, charging, attempting to collect or charge, or using or proposing any agreement purporting to collect or charge any f
All states after September 1, 2013
Solicitations or advertisements
150/125
15/60
Engaging in any unfair or deceptive practice toward any person

120
Information lists and data concerning loan transactions in a format prescribed
Enhance consumer protections
Any Mortgage Lender making fewer than five mortgage loans within any 12 consecutive months
The Governor of the state
Fingerprints, personal history and experience

Item 4
These are known as private-label mortgage-backed securities
the Truth in Lending Act.
pension funds
underwriting
must require borrowers to use a particular title insurance company.
pool loans together for resale on the secondary market
within three days of application.
Ginnie Mae
require that lenders provide good faith estimates of all closing costs.
Ginnie Mae is a government-owned corporation
if the proposed loan amount were $100,000 or less
the property value exceeds the loan amount
steering
loan servicing
stabilized the primary market
OTS
VA loans
the national supply of mortgage funds
5
Slowly increase
A seller-provided second loan
GNMA
Sallie Mae and Ginnie Mae
have been held in portfolio for a probationary period
mortgage instruments
Subprime loans
political events
the Real Estate Settlement Procedures Act
Housing and Economic Recovery Act
originate loans using their own funds, then sell them on the secondary market
savings bank
savings banks
thrifts
small private investors
in the 1980s, as an alternative to fixed-rate mortgages
thirty-year fixed-rate mortgages
secondary market agency
mortgage company
Depository institutions must report the number of mortgage loans issued to low- and middle-income borrowers
were repaid over a 30-year term
tend to be large, nationwide institutions
Tax breaks on sales of principal residences
Glass-Steagall Act
originates residential loans, but does not accept deposits
trade deficit
mortgage interest deductions
Taxation
reserve rate
unemployment
Taxation
the discount rate
Six directors are elected by stockholders and three are appointed by the Federal Reserve Board of Governors
stagnant growth
The federal government
increase reserve requirements and sell government securities
Thrift Institutions Advisory Council
rate that banks charge each other for overnight, unsecured loans
9
wholesale lender
Member banks decide how much they will charge each other, although the Federal Open Market Committee sets a target for t
$500,000
the trustor
security instrument
variable interest
to pay the property taxes
PMI is required
the right to sell the property
installment note
must challenge the maker's defenses before receiving payment on the note
principal only
the names of the parties
loan that will be supplemented with seller financing
must have notice of any defenses against payment of the instrument
The lender has the right to foreclose under a security instrument
take-out loan
validate the promissory note
the seller has no further liability to the lender
may increase, but cannot decrease, during the loan term
95%
the note rate
once a month
$236,610
The lender ordinarily pays the insurance premiums
an index
rate adjustment period
protect the seller from foreclosure
restricts the amount of the monthly payments over the loan term
the market rate at the time the loan was originated
wraparound mortgage
lower amount of total interest paid
total amount the interest rate can increase over the life of the loan
7/1 ARM
unamortized
35 years
teaser rate
Truth in Lending Act
MIP
It signifies that the buyer is ready, willing, and able to buy at the agreed price
The Truth in Lending Act does not apply to no-fee loans
reduce the borrower's monthly payments to an affordable level
provide a detailed list of all charges and credits for each party to a transaction
$6,000
A personal credit report from a reputable credit bureau
LTV
preverification
Underwriting
Payroll stubs for the previous 30 days
talk to three or four lenders before deciding which one to apply to
$9,600
Dividing the maximum loan amount by an appropriate loan-to-value ratio to find the buyer's maximum purchase price
stock dividends and other investment income
residuals
the lender will hold her application for 6 months before re-evaluating the report
housing expense to income ratio
underwriting standard designed by Ginnie Mae
wholesale lender
A freelance writer who usually earns a high income but cannot document a reliable income stream
significant assets
"Refer"
An applicant with a high FICO score
VOD
three years
They were developed by Ginnie Mae for residential lenders
risk classification
taxes owed
Vacant lot
5 years
value in use
Substitution
uses the replacement cost method
Reconcile the result to arrive at a final value estimate
Sales comparison method
Terms of sale
subject property's value upward
The property must have been on the open market for a reasonable period of time
substitution cost
functional obsolescence
percentage rent
There is not enough information to solve the problem
regression
preliminary listing
Selecting appropriate comparable sales
three months ago
the interest rate is adjusted once after several years to reflect the current market rate
The buyer will most likely pay one-twelfth of the annual premium each month
maximum income limits
the loan's interest rate is bought down permanently
She's buying an energy-efficient home
reverse equity mortgage
portfolio loan
required to pay off his loan over a shorter term than Buyer A
debt-to-income ratio and loan-to-value ratio
must comply with restrictions imposed by the primary lender
Under certain conditions, the lender is required to cancel the PMI whether or not the borrower requests cancellation
A loan made by the seller
97%
6 points
has a loan-to-value ratio over 97%
Yes, as long as Wilson obtains extra mortgage insurance for the loan
43%
$8,000
the two loans combined do not exceed the maximum loan amount for the transaction
47%
VA-guaranteed
Only a buyer who meets the FHA's creditworthiness standards and will occupy the home as his or her primary residence
vacation home
Treasury Department
FHA loans may never be assumed
the local median housing price
Credit card payments
an upfront premium that may be paid in cash or financed, plus most likely an annual premium
two months' reserves
sell loans
0.85% of the loan balance, not including financed UFMIP
Secondary financing from the seller is always applicable toward the minimum cash investment
Section 255
She was not charged an annual premium in the first place
43%
required to make a minimum cash investment, which may include closing costs, discount points, and prepaid expenses
Home Analysis
Social Security and Medicare withheld
The veteran's residual income is at least 20% over the required minimum
$935
$2,150
under no circumstances
43%
A VA loan cannot be used in this situation
50%
There are no income limits for VA loans
A veteran purchasing a single-family home that will be used as a rental
A veteran who was discharged after 60 days for a service-connected disability
any conventional loan
The total of all financing must not exceed the appraised value of the property
$820
there is no mortgage insurance or funding fee
Their ability to combine entitlements will depend on whether or not they make a down payment
steering
A second loan provided by the seller of a residential property
Points paid by borrower
Points paid by seller
VA loans
5
"Monthly payments of just $1,020"
A seller-provided second loan
a Uniform Settlement Statement
Loan flipping
unfair prepayment penalty
An elderly person with a lot of home equity
Home Ownership and Equity Protection Act
The Home Ownership and Equity Protection Act (HOEPA) has eliminated predatory lending in all but a few states
The source of the borrower's income
the Real Estate Settlement Procedures Act
Uniform Settlement Statement
The state legislature
$250,000
The Federal Deposit Insurance Corporation (FDIC)
Acts of commission as well as acts of omission
a person who services mortgage loans
Loan advertisements for residential mortgages
It depends on how earlier cases of a similar nature have been settled
Fingerprints
The Association of state Governors
Failure to account for all funds received or disbursed relative to any loan or client
Conditional
reduce the probability of fraud in the lending process
30 days
The originator continues to meet the minimum requirements
Any mortgage lender making fewer than five mortgage loans within any 12 consecutive months
Provide consumers with easily accessible information, offered at no charge, through electronic media, including the Internet
Retest as a new licensee and achieve a passing score as is in place at the time of retesting.
A person or entity solely involved in extensions of credit relating to timeshare plans
2 hours of federal law, 3 hours of ethics, 2 hours of non-traditional mortgage products and 1 hour of elective content
A list of all states in which the MLO is currently or has previously been licensed in
5 years
35 questions
You have actually made loans at those rates, points, or terms in the past.
Set minimum prices for continuing education classes
State regulatory agencies cannot request the issuance of a cease and desist order
Physical and virtual offices
On any solicitation, advertisement, business cards and websites
National Mortgage Listing Service
Conspicuously posting the MLO's license number on advertising
Instructors are not permitted to receive credit for teaching
10 states
A construction loan for a residential lease purchase
Revoke a license
Enforcement actions against mortgage loan originators
licensees who will originate $20,000,001 to $50,000,000 in loans per year
Websites
Summation
Civil, or criminal findings by a governmental agency
Assess Fees and Penalties
A contract MLO who works outside of the office and is not sponsored
One (1) month
The applicant was previously involved in an act of money laundering ten years prior to their application.
An individual who negotiates a loan that serves as the individual's residence
Imprisonment for not more than 90 days
FDIC
Conduct audits, investigate, and conduct enforcement actions necessary to carrying out the SAFE Act
Charging rates or fees below those permitted by predatory laws
A 1099 employee
A person licensed by a state as a mortgage loan originator with a unique identifier from the NMLS
A unique identifier allows for the electronic tracking of loan originators for the sole use of federal banking agencies.
When the borrower is present when it is done

Signing documents in the event the borrower failed to do so
An underwriter
The license number of the MLO
Distributing information for processing or underwriting a loan
Commercial mortgage loan
All must be both licensed and registered as a loan originator

Any mortgage product other than a 30-year variable rate mortgage
Systematic and Fair Enforcement
National Credit Union Administration
A loan originator takes a residential mortgage loan application.
Enhances consumer protections and supports anti-fraud measures.
4 years
The applicant has completed an NMLS approved pre-licensing course and passed a licensing exam.
Property appraisal
2 months
Federal and state laws as well as regulations pertaining to mortgage loan origination
2 hours of nontraditional mortgage product training
$30,000
4 times per year
To access information related to the employment history of and enforcement actions against loan originators
Examiners have the authority to issue cease and desist orders.
Hiding any books or records
80%
4 hours
American Association of Registered Mortgage Regulators
The licensee has closed loans in value exceeding $500,000 during the current calendar year
2 hours of training related to nontraditional mortgage products
The authority to examine, investigate and conduct enforcement actions to carry out the purposes of the Act
Confluence of State Bank Supervisors (CSBS)
National lender as an employer
The Comptroller of the Currency
Every 5 years
Fair lending issues
Mortgage Loan Officer
Current outstanding tax liens or other government liens and filings

The State Financial Supervisorial Authority
Receives a loan application through the mail and forwards it, without review, to loan approval personnel.
Mortgage Loan Officer
Corporation
Fraud prevention
To establish performance based bonding requirements for mortgage originators
Making, in any manner, any false or deceptive statement or representation
Failing to truthfully account for monies belonging to a party to a residential mortgage loan transaction
The contiguous 48 states
Residential mortgage loan application forms
175/150
30/45
Soliciting or entering into a contract with a borrower that provides in substance that the person or individual subject to the SAF
110
Such other information deemed necessary
Reduce fraud in the industry
Any person who acts as a Mortgage Broker fewer than 5 times within any 2 consecutive months
The Nationwide Mortgage Licensing System
State, national, and international criminal history

US21FI12 Quiz Question Pool 04sep2013

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US21FI12 Quiz Question Pool 04sep2013

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Type

A residential mortgage loan

Ignore education requirements for licensing

An employee of a depository institution

A mortgage loan originator

Working to bring borrowers and lenders together to mortgage a property

Residential mortgage loan

All must be either licensed or registered as a loan originator

Acceptable net worth

The Director of the Office of Credit

Loan Processor or Underwriter

Current outstanding judgments as a result of medical expenses

Title Insurance policies

Obtaining a loan on real property for a friend

The state regulatory agency

A line of credit specifically on an assumable residential loan

A real estate broker

When the borrower has given their consent

Gathering information from a borrower

Personal property mortgage loan

All must be registered as a loan originator

The applicant has never had a loan originator license revoked.

Employer's letter of credit/recommendation

The Board of Governors of the Federal Reserve System

A 1099 paid Independent Contractor

A pattern of seriously delinquent accounts within the past three years

The Mortgage Bankers Association

Administrative, civil, or criminal findings by a governmental agency

A loan on a multifamily dwelling or small commercial building

Not an employee of a subsidiary that is regulated by the Farm Credit Administration

When the individual who needs to sign cannot do so

A real estate broker or salesperson

Processing a loan application

Nontraditional mortgage loan

All must be licensed as a loan originator

High credit score

The National Credit Union Administration

Mortgage Loan Originator

Foreclosures within the past three years

Fair lending issues

Engaging in any unfair or deceptive practice toward any person

The Governor of the state

Fingerprints, personal history and experience

A construction loan for a residential lease purchase

When the borrower is present when it is done

Distributing information for processing or underwriting a loan

Commercial mortgage loan

All must be both licensed and registered as a loan originator

National lender as an employer

The Comptroller of the Currency

Mortgage Loan Officer

Current outstanding tax liens or other government liens and filings

The Nationwide Mortgage Licensing System

State, national, and international criminal history

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