SAFE Comprehensive Mortgage Loan Originator Fundamentals
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Questions and Answers

What type of loans are secured by a consumer's principal dwelling with an APR that exceeds the average prime offer rate by 1.5 percentage points?

  • Section 32 loans
  • Higher-Cost loans (correct)
  • Higher-Rate loans
  • Higher-Priced loans
  • What is the name of the regulation implementing the Truth in Lending Act?

  • Regulation B
  • Regulation Z (correct)
  • Regulation C
  • Regulation X
  • What does the annual percentage rate (APR) represent?

  • Sum of all costs required to obtain credit
  • Cost of a borrower's credit calculated as an annual rate (correct)
  • Ratio between the interest rate charged and the amount borrowed
  • Nominal interest rate of the loan over the term of the loan
  • How many hours of continuing education must a state-licensed loan originator complete to meet the annual requirement?

    <p>15 hours of CE</p> Signup and view all the answers

    What type of mortgage loan has an interest rate that remains fixed for a certain period then changes over time based on a market index?

    <p>Hybrid ARM</p> Signup and view all the answers

    What is the date on which Mr. and Mrs. Smith are closing on a home?

    <p>January 10, 2011</p> Signup and view all the answers

    What is the percentage of LTV approved by the lender for the Smith's mortgage loan?

    <p>90%</p> Signup and view all the answers

    How much pre-paid interest must the Smith's pay at closing, assuming a 360-day calendar year?

    <p>$1,238.19</p> Signup and view all the answers

    Within how many days of receiving a completed application must a mortgage loan originator notify an applicant of action taken on their request?

    <p>30 days</p> Signup and view all the answers

    What type of mortgage provides an elderly borrower with a monthly check instead of the borrower paying a monthly payment?

    <p>Reverse mortgage</p> Signup and view all the answers

    What is the name of FHLMC's automated underwriting system?

    <p>Desktop Underwriter</p> Signup and view all the answers

    What does Section 8 of RESPA prohibit?

    <p>Giving or receiving a fee or thing of value for referrals</p> Signup and view all the answers

    What is the maximum prison sentence for a violation of the SAFE Act?

    <p>30 years</p> Signup and view all the answers

    What type of deterioration refers to a loss in value caused by factors outside the property itself?

    <p>External obsolescence</p> Signup and view all the answers

    What is included in the housing expense to income ratio (Front End Ratio)?

    <p>Homeowner’s Insurance</p> Signup and view all the answers

    What type of mortgage product is not considered a nontraditional mortgage product?

    <p>30 year Fixed Rate Loan</p> Signup and view all the answers

    Who can provide gift funds for a down payment according to FHA underwriting guidelines?

    <p>The borrower’s family member</p> Signup and view all the answers

    How many basis points is 3.5 discount points?

    <p>350 bpts</p> Signup and view all the answers

    Mortgage loan originators who make cold calls must update their download of the National Do-Not-Call registry at least every:

    <p>31 days</p> Signup and view all the answers

    Which appraisal approach is used as the best indicator of value for existing properties?

    <p>Sales Comparison Approach</p> Signup and view all the answers

    Which regulation implements the Equal Credit Opportunity Act?

    <p>Regulation B</p> Signup and view all the answers

    What is the maximum percentage of financing concessions that FHA sellers are permitted to provide?

    <p>6 percent of the sales price</p> Signup and view all the answers

    What is the allowable tolerance for the Final APR disclosed in a regular transaction?

    <p>0.125%</p> Signup and view all the answers

    What minimum score is required to pass the NMLS-developed Mortgage Loan Originator Test?

    <p>80% or better</p> Signup and view all the answers

    According to TRID, when must the Closing Disclosure be completed and made available for inspection?

    <p>3 business days prior to consummation</p> Signup and view all the answers

    What is the maximum LTV allowed for VA loans?

    <p>97%</p> Signup and view all the answers

    What is the primary factor considered in the VA's debt-to-income ratio?

    <p>Residual income calculation</p> Signup and view all the answers

    Which of the following is NOT prohibited by the Equal Credit Opportunity Act?

    <p>Immigration status</p> Signup and view all the answers

    How often can an individual retake the SAFE Act qualified test?

    <p>Every 30 days after the preceding test</p> Signup and view all the answers

    Which of the following loans is excluded from the Ability-to-Repay Rule requirements?

    <p>VA loan</p> Signup and view all the answers

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