NMLS MLO 10 2017

A type of mortgage lender which would be BOTH a retail lender AND a depository institution would be a?

Savings and loan association;

A higher interest rate charged on a loan in return for lower upfront closing costs would be an example of a:

Yield spread premium;

A partial release clause would be associated with a

Blanket mortgage

What is the primary difference between a Graduated Payment Mortgage and a Growth Equity Mortgage

In a Growth Equity Mortgage, the increased payments apply to principal reduction

What is the minimum credit score required to qualify for an FHA loan

500 to 579 with 10% down 580 or above 3.5%

Which of the following is NOT a cap on the interest rate of an ARM:

Payment cap

The document that makes the property collateral for the debt is the:

Mortgage or Trust Deed

If there is no escrow account for the homeowners insurance, and the borrower fails to renew the policy, the servicing agent for the loan would obtain a hazard insurance policy on the property. This policy is
called a:

Forced place policy

When two people are applying for a mortgage, under what circumstances should you recommend that they each fill out separate applications:

When they are unmarried and do not conduct their financial affairs jointly

Under Fannie Mae and Freddie Mac guidelines for appraisals, what is the maximum gross and net adjustments, respectively, to any one comparable sale

25% gross and 15% net

An applicant has gross earnings of $2,600 per bi-weekly paycheck. His net bi-weekly paycheck is about $1,800. The applicant's gross monthly income would be closest to

2,600 x 26 divided by 12 = $5,633.33,

A Registered Loan Originator must complete how many hours of continuing education courses each year

There are NO continuing education requirements for Registered Loan Originators, only for State Licensed Loan Originators.

Which of the following individuals would NOT need to be licensed as a mortgage loan originator?

One who only originated mortgages on residential properties with more than 4 units.

Under the Model State Law, a supervisory agency may rely on examination or investigation reports made by other government officials:

From within or without that state.

If the CFPB determines that a state is out of compliance with the SAFE Act and Regulation H, after its initial determination of noncompliance it must allow a public comment period for at least

30 days

If the CFPB determines that a state supervisory agency is not in compliance with the SAFE Act and Regulation H, what is the ultimate, highest penalty the CFPB could impose?

The CFPB could create its own state licensing system.

Richard was convicted of securities fraud some years ago. Several years after his release from prison, Richard applies for a mortgage loan originator license. Under what circumstances might he be granted a license?

Only if Richard has received a pardon for his conviction.

Which of the following loans would be a "nontraditional loan" under the Model State Law?

A nontraditional loan is any loan other than a 30 year fixed rate mortgage

Which of the following laws has as one of its central purposes the desire to prohibit sellers from requiring buyers to use a specific title insurance company?

RESPA
RESPA prohibits sellers from requiring buyers to use a specific title insurance company

If a mortgage broker follows the "safe harbor" provisions of the Anti-Steering rules of Regulation Z, what effect will that have?

In any lawsuit involving a claim of steering, the court would presume that the lender did not violate the prohibition against steering,

Which of the following choices would be considered "nonpublic personal information" under the Gramm-Leach-Bliley Act?

The fact that an individual has an account with a firm,

A mortgage brokerage firm has a partnership with a title insurance company and other investors to run a title insurance agency. The mortgage brokerage firm refers all of its customers to this agency. The mortgage brokerage firm shares in the profits based

The mortgage brokerage firm can only share in the profits to the extent of its capital investment, regardless of its referrals

A tax lien must be removed from a consumer's credit report:

7 years after it was repaid.

A lender mails a Closing Disclosure on a Friday. For purposes of determining when the borrower receives the form and disregarding the possibility of a holiday, would the next day (Saturday) count as a business day?

Yes, but only as long as the lender's office was open for business.

A borrower applies for an adjustable rate loan. The initial Closing Disclosure shows the Annual Percentage Rate as 6.125%. What is the maximum rate to which the APR could rise (prior to closing) without triggering the requirement for a revised Closing Dis

6.25%
An adjustable rate loan is considered a regular loan under TILA. Its maximum error tolerance regarding the APR would therefore be one-eighth of one percent or 12.5 basis points. 6.125% + 0.125% =6.25%

Under the Truth in Lending Act, a loan in which there is only one loan disbursement and the loan payments are the same each month (except for the first and last payments) would be considered a(n):

Regular loan;

Which of the following statements is true about individuals who need to be licensed or registered as a Mortgage Loan Originator?

Persons who finance only timeshare interests do not need to be registered or licensed as MLOs.

What is the debt limit on a reverse mortgage:

100% of the market value of the home

When an interest rate adjustment would result in a monthly interest payment that exceeded the payment cap, which of the following would result if the borrower took advantage of the payment cap:

Negative amortization,

Appraisers must report and consider any prior sales of a comparable sale for how many years prior to the date of the appraisal

1 year

When completing the 1003 Form, the loan amount should be rounded to the nearest:

$50.00

When appraising special purpose properties, which of the following appraisal approaches would be likely to be most appropriate:

Cost Approach

In addition to the loan origination fee listed on the Loan Estimate, what fees may a lender charge for making a loan:

The only two fees for making the loan are the loan origination fee and a fee for a specific interest rate ( yield spread premium or discount points). Other permissible fees relate to fees for services rather than for just making the loan. Appraisal fees,

The Notice of Right to Appraisal Report disclosure form is now incorporated into the:

Loan Estimate Form.

The prohibition against unfair, deceptive, or abusive acts and practices is found in:

The Dodd-Frank Act

During the real estate boom up through 2006, Wall Street investment firms purchased a tremendous number of mortgages for inclusion in

C. Collateralized Debt Obligations;

The Mortgage Acts and Practices (MAP) Rule is found in:

Regulation N

Jerry obtained his mortgage loan originator license in 2009. In 2013, he allowed his license to lapse. In 2016 he wanted to regain his license. In order to become licensed again, Jerry would be required to complete what continuing education requirements u

The MSL would require Jerry to complete the continuing education requirements only for the last year when he was previously licensed (2015)

The Model State Law and the SAFE Act both require that several topics be covered for specific time amounts as part of the continuing education requirements. Which of the following is the actual allocation of these required topics?

3 hours on federal law and regulations, 2 hours on ethics (including fair lending), and 2 hours on nontraditional lending.
The difference between the prelicense and continuing education requirements is that the ethics category is 3 hours for prelicense ed

A registered mortgage loan originator is an individual who acts as a mortgage loan originator and who is an employee of:

depository institutions or their subsidiaries

If the CFPB determines that a state supervisory agency is not in compliance with the SAFE Act and Regulation H, what is the ultimate, highest penalty the CFPB could impose?

C. The CFPB could create its own state licensing system.

Which of the following statements is true regarding the provisions of the E-SIGN Act is correct?

A. A consumer has the right to terminate consent to having electronic documents and electronic signatures, but the consequences could include termination of the relationship.
B. A consumer has the right to consent to only receiving certain documents elect

According to the FRB Statement on Subprime Lending, which of the following would be an example of "risk layering:

The FRB Statement on Subprime Lending defines the practice of "risk layering" as any type of sub prime loan that has two or more high-risk factors. Choice A is a no-doc loan, which means the income is not verified and is a 5/1 ARM, which means the interes

When a consumer refuses to answer the question about the applicant's race or ethnicity the MLO taking the application should answer the question based on

Either visual observation or the applicant's surname.

Under the Home Mortgage Disclosure Act, the Loan Application Register is reported annually to the:

Federal Financial Institutions Examination Council (the FF!EC).

RE SPA would apply to which of the following loans:

A loan to purchase a vacant lot on which a single-family residence will be built.

A loan which has been designated as a Higher Priced Mortgage Loan under the Home Ownership Equity Protection Act is not permitted to be a(n)

C. Stated income loan;

A junior mortgage which falls under the general definition of a qualified mortgage would be considered a higher-priced qualified mortgage if the APR of the qualified mortgage exceeded the APOR by:

3.5%

The finance charge, as computed under the Truth in Lending Act, would include each of the following, EXCEPT:

Appraisal Fee:

Quarterly mortgage call reports must be filed:

Within 45 days of the end of the calendar quarter

A small mortgage lender that makes a loan to a homebuyer and immediately sells it to a larger lender is acting as a

Both a correspondent lender and a retail lender.

A Registered or State Licensed Loan Originator is identified in the NMLS by his or her

Unique identifier

If an adjustable rate mortgage is described as a "5 / 2 / 6" loan, the second number would indicate the maximum:

Interest rate adjustment after the initial adjustment

The phrase "the gradual reduction of the principal balance of a loan on an installment basis" describes the term:

Amortization

When Private Mortgage Insurance is obtained on a loan, the borrower must put up a down payment of at least

3%

The initial interest rate on an adjustable rate loan is 2. 5% below its fully-indexed rate. This rate would most accurately be called a

Discount rate

Which of the following statements is true of land contracts

The vendor transfers equitable title to the vendee

Which of the following statements would be true of a "5/6" ARM

Rate would be fixed for the first 5 years and would adjust every 6 months thereafter

A loan which is "amortized over 30 years, but due and pay able after five years" would be a loan which

Is a partially amortized balloon loan

The right to cancel PMI was created by which federal law

The Homeowners Protection ACT

What is a straight note

an interest only loan

In a VA loan what is the limit on the sellers contribution towards the buyers non recurring closing cost?

no limit

The notice of Right to Appraisal report disclosure is incorporated into

Loan Estimate

On a Loan Estimate what cannot be changes

Transfer taxes

If CD is being emailed to borrower it must be emailed ____ business days prior to consummation?

6 days

Under ECOA the lender must inform an applicant of the action about an application for credit within

30 days

Which of the following disclosures must be made immediately upon occurrence of the action that triggers the need for disclosure?

Affiliated Business Disclosure

A loan to be sold to Fannie Mae would use which of the following definitions of Qualified Mortgage?

Temporary Definition

Under ECOA if an applicant receives public assistance what can the lender do in considering that income?

Determine the likelihood of its continuance

A type of loan fraud that often involves identity theft

Straw Buying

The prohibition against unfair, deceptive or abusive acts and practices is found in

The Dodd Frank Act

CEE Requirement

3hr fed law, 2 hr Ethics 2 hr nontraditional lending

Under Model State Law a lender cannot require property insurance coverage that exceeds

The replacement cost of improvements

FHA DTI

31 and 43 %

Conventional DTI

28 and 36%