Failed Questions PDF

Test 1 ​ According to the Qualified Mortgage Rule, what is the maximum percentage limit on the total obligation DTI ratio for a general qualified mortgage? a) 41% b) 36% c) 28% d) None ​ Under ECOA, the lender is required to provide the borrower a reason for denial. How lo...

Test 1 ​ According to the Qualified Mortgage Rule, what is the maximum percentage limit on the total obligation DTI ratio for a general qualified mortgage? a) 41% b) 36% c) 28% d) None ​ Under ECOA, the lender is required to provide the borrower a reason for denial. How long does the lender have to provide that reason? a) 60 days b) 90 days c) 30 day ​ What type of fraud scheme usually includes a “get rich quick” real estate seminar? a) Chunking b) Churning c) Redlining d) Illegal Property Flipping ​ The application for a mortgage loan originator would be denied for all of the following reasons except: a) The applicant had a mortgage loan originator license revoked b) The applicant was convicted of a felony 5 years ago c) The applicant has a foreclosure on their credit report from 4 years ago d) The applicant has had seriously delinquent accounts in the past 3 years ​ Which federal law was put into place to improve consumer’s access to credit information? a) FCRA b) FACTA c) Gramm-Leach-Bliley d) Red Flags Rule ​ According to FACTA, how often is a consumer entitled to a free copy of their credit score? a) Never b) Annually c) Twice a year d) Once every two years ​ All of the following applies to the right of rescission except: a) It's only available on owner occupied refinance transactions b) The lender is required to provide 2 copies of the notice of right to rescind at closing c) The borrower has 4 days from choosing to rescind the loan d) If the borrower does not receive the 2 copies of the notice of right to rescind the borrower has 3 years to rescind the loan ​ A lender has a policy that only individuals between the age of 25-45 can receive home loans of over $400,000. What would this be considered? a) Disparate Treatment b) Disparate Impact c) Discrimination d) Blockbusting Test 2 ​ Who of the following is in violation of the Section 8 provisions of RESPA? a) An attorney who also earns fees for performing multiple settlement services b) An employer who pays her employees for referrals c) A real estate broker who pays a cooperating real estate broker for a referral d) An MLO who leases office space in a real estate office at an above market amount ​ A person was purchasing an income property which was scheduled to close and fund on June 25th. Rent of $1800 was paid for the month of June on the 1st. What was the buyer’s proration amount? a) $300 b) $210 c) $296 d) $360 ​ HMDA was created to help to eliminate what: a) Redlining b) Steering c) Predatory Lending d) Price Gouging ​ MLOs will be required to provide the following information for disciplinary actions requiring a “Yes” response to the MU4R disclosure questions. Which of the following would not need further explanation? a) Action Type (Criminal, Regulatory, Civil Judicial, or Civil Regulatory) b) Official Documentation related to the Action (e.g., court order or letter from regulatory authority), to be uploaded as a PDF file c) Mandatory explanation of the disciplinary action written and provided by the MLO d) Name of Authority that took the Action being disclosed  ​ What is the industry standard, for gross percentage adjustment on a residential property appraisal? a) 25 b) 15 c) 20 d) 10 ​ hat is it called when the borrowers pay a fee to get a lower interest rate to start, but overtime the interest will raise to the quoted fixed rate? a) Origination fee b) Discount points c) Adjustable rate d) A buydown ​ Omar is closing his purchase transaction, he was not provided the right to rescind information, how long does Omar now have to rescind his loan? a) He does not have a right to rescind his loan as this is a purchase transaction b) Thirty days c) One year d) Three years ​ TRID requires a borrower to: a) Indicate their intent to proceed b) Provide their verifying documentation before an LE can be sent out c) Pay an upfront fee before an LE is sent d) Provide a downpayment at the time of application ​ With an ARM, what happens to a borrower’s payments if the index increases? a) There will be a larger balance due and payable b) Payments go down c) Payments go up d) Payments remain the same ​ What is the conventional mortgage back end DTI ratio on a manually underwritten loan? a) 28% b) 29% c) 36% d) 45% ​ Which of the following is not a requirement under HOEPA? a) Housing counseling on high-cost home loans b) Full appraisals on high-cost home loans c) A HOEPA High-Cost mortgage special disclosure three days prior to consummation d) The APR must be disclosed on all advertisements ​ Which of the following questions is not prohibited while taking a loan application? a) Asking about childbearing intentions b) Asking the borrower to add a spouse to the application c) Asking questions to discouraging a borrower from applying d) Asking the borrower his/her marital status ​ Who receives the YSP? a) The Broker b) The Lender c) The Borrower d) The Servicer Test 3 ​ In qualifying the income of a sole proprietor borrower, the originator should consider which of the following to be most important? a) Form 1040 adjusted gross income b) Schedule C net income c) Expenses reported on Form 2106 d) Schedule C net income plus non-cash expenses and depreciation ​ A lender may keep the: a) credit report fee and yield spread premium. b) discount points and appraisal fee. c) yield spread premium and discount points. d) Origination Fee ​ After the crisis of the Great Recession according to FHA underwriting when can a borrower repurchase again after a foreclosure? a) 7 years from the deed transfer date b) 5 years from the deed transfer date c) 2 years from the deed transfer date d) 3 years from the deed transfer date ​ When a deed of trust is recorded, which of the following is true? a) Ownership is conveyed b) A lien is released c) A lien is created d) It verifies both the lender and borrower signed the document ​ Which of the following is true about asking a borrower questions about divorce? a) Asking questions about divorce is permissible if there is any documentation in the loan file that suggests a divorce. b) Questions about divorce are always allowed. c) If you  suspect a divorce based on visual evidence, questions may be asked. d) Questions about divorce are never allowed. ​ If borrower Jill has a loan with an LTV of 95% how would her PMI change if she put an extra 5% down to bring her LTV to 90%? a) It would depend solely on the loan amount b) It would be lower c) It would stay the same d) It would be higher ​ What are the terms of the “cooling off” period if a loan falls under HOEPA? a) Three business days prior to closing b) Three business days after closing c) Seven business days prior to closing d) 30 business days after closing ​ After the crisis of the Great Recession according to FHA Standard underwriting when can a borrower repurchase again after a Chapter 13 bankruptcy? a) 7 years from the credit discharge date b) 5 years from the credit discharge date c) 1 year from the credit discharge date d) 3 years from the credit discharge date ​ The FACTA allows a consumer to dispute inaccurate credit information. How many days are allowed for an incorrect item to be investigated? a) 30 b) 60 c) 90 d) 120 ​ When are the funds disbursed for an owner-occupied residential a) After the loan documents are recorded b) At the time of the loan closing c) Within seven days after the application d) After the three business-day right of rescission period has expired ​ MLO Josh is working with Javier. Josh knows that HOEPA requires a specific counseling disclosure on all federally related high-cost transactions. What is not true about that disclosure? a) The disclosure is a list of housing counselors b) The disclosure must be sent within 3 business days of application c) The disclosure must be sent 3 days prior to consummation d) The disclosure must include 10 housing counselors Test 4 ​ When is it legal for the loan originator to provide the consumer with a copy of his/her credit report? a) Never b) When the customer pays for it c) When the customer requests it d) When the MLO's contract with the credit reporting agency does not prohibit it ​ The back-end DTI on a manually underwritten conventional loan cannot exceed: a) 36% b) 43% c) 45% d) 42% ​ Angela has a 1/1 ARM with caps of 2/2/8. The initial interest rate is 4% and adjusts annually. The SOFR is currently at 2% and margin is 1.25%. What would be the interest rate at 6 months? a) 4% b) 6% c) 8% d) 10% ​ Which of the following things is not considered when a credit score is calculated? a) Payment history b) Amounts owed c) Credit Mix d) Your monthly payment on all credit lines ​ Broker Juan advertises low interest rates and includes the accurate APR. However, when qualified applicants come in, Juan tells them that the smarter loan for them would be one with a slightly higher rate and more fees. Did Juan do anything wrong? a) No, he included everything he was supposed to in his advertisement b) No, he was simply helping a borrower find a better product for them c) Yes, this could be considered a bait and switch tactic d) Yes, this is a UDAAP ​ A consumer could claim that in originating the mortgage, a creditor did not make a reasonable and good faith determination of repayment ability, and that they violated the ATR Rule. If a court finds that the loan met the QM requirements and was not  higherpriced, the consumer would lose the claim. Following QM requirements provides the lender with: a) Safe Harbor b) Rebuttable presumption c) No liability d) None of the above ​ If a trigger term appears in an advertisement all of the following must be disclosed except: a) The APR b) The amount of the down payment or that none is required c) The terms of repayment d) The origination fee on the loan ​ If an advertisement lists a finance charge, what else must be disclosed on the advertisement? a) The APR b) The interest rate c) Both the interest rate and APR d) All of the above ​ According to Regulation Z, the borrower on a primary residence has the right to rescind. At closing the Notice of the Right to Rescind must be provided to the borrower. Which of the following is true about the Notice of the Right to Rescind? a) You must provide 2 copies of the Notice of the Right to Rescind b) You must provide 2 copies of the Notice of the Right to Rescind to all owners on the property. c) You must provide 2 copies of the Notice of the Right to Rescind to all of the borrowers on the loan. d) None of the above are true about the Notice of the Right to Rescind ​ According to RESPA, a servicer is required to disclose an initial escrow account statement. How long does the servicer have to disclose that initial escrow account statement? a) 30 calendar days from settlement b) 45 calendar days from settlement c) 90 calendar days from settlement d) 15 calendar days from settlement Test 5 ​ Which of the following would require a person to be licensed as an MLO? a) Assisting a family member who is filling out an application by explaining the contents of the application and where particular borrower information is to be provided on the application b) Generally describing for a borrower or prospective borrower the loan application process without a discussion of particular loan product specifics c) Responding to a borrower's inquiry resulting from a prequalified offer, collecting detailed identifying information and/or loan application information from the borrower or prospective borrower on behalf of a lender. d) Receiving a loan application through the mail and forwarding it, without review, to loan approval personnel. ​ According to ECOA, when must you provide a copy of the appraisal to your borrower? a) 3 business days prior to settlement b) At settlement c) 1 business day prior to settlement d) Within 90 days after a borrower request for the appraisal ​ If an underwriter is looking at a borrower's credit report, how far back are they looking at credit inquiries? a) 12 months b) 6 months c) 24 months d) 120 days ​ A violation of TRID is you disclose all the Zero and 10% Tolerance costs on the LE, except: a) Escrows b) Realtor Fees c) Discount Points d) Homeowners Insurance ​ Which of the following is NOT true about the VOE? a) It must be sent directly by the processor to the employer. b) It must be signed by the personnel department or the borrower's superior. c) It can be sent electronically to the borrower to be presented to the lender. d) It must be provided for all employed applicants, and must be fully completed, signed, and dated.  ​ All of the following are acceptable actions by the State Regulatory Authority except: a) Issuing a cease and desist order b) Imposing fines c) Refusing to renew a license d) Requiring community service ​ Business income is derived from a sole proprietorship and is calculated on which of the following tax forms? a) Schedule C b) Schedule E c) Form 1099 d) W-2 ​ Which of the following would NOT be included in a list of Federal Banking Agencies? a) The Board of Governors of the Federal Reserve System b) The National Credit Union Administration c) The Comptroller of the Currency d) The Director of the Office of Credit Compliance ​ Andrew is a veteran looking to obtain his first VA loan to purchase a house putting 10% down. He knows that he will have to pay a funding fee. What would his funding fee be? a) 3.30% b) 2.15% c) 1.25% d) 1.50% ​ How many days do you have to correct a non-numeric clerical error on the Closing Disclosure? a) 10 day after consummation b) 20 days after consummation c) 30 days after consummation d) 60 days after consummation ​ The sales contract in Donovan's file states the agreed purchase price is $227,000. The closing costs are $5,200. The seller is paying $1,000 in closing costs on a $175,000 loan amount. What is the acquisition cost? a) $180,200 b) $179,200 c) $232,200 d) $231,200 ​ The consumer can be charged an appraisal review fee: a) Only after an appraisal and you know a review is needed b) If the appraiser requests a review appraisal be completed c) Never d) Only if the review fee is disclosed on the Loan Estimate ​ The term "State Housing Finance Agency" includes any authority that is/has all of the following EXCEPT: a) When chartered by a state to help meet the affordable housing needs of the residents of the state. b) When it has the status of a tax-exempt organization. c) When it is supervised directly or indirectly by the state government. d) When it is subject to audit and review by the state in which it operates. ​ Which of the following is considered liability fraud? a) Debts from the credit report to do not transfer over to application b) Debts match up with Verification of Credit c) Borrower fails to tell you about a property he is buying on a contract d) Borrower is to explain the slows on the credit report ​ What is a wraparound mortgage? a) A type of balloon mortgage b) A type of second mortgage c) A type of graduated payment mortgage d) A type of reverse mortgage Test 6 ​ What will the lender obtain to insure proper lien position? a) Attorney's opinion b) A lenders title insurance policy c) Title endorsement d) Title insurance guarantee ​ An act of practice is considered ____________ if it materially interferes with the ability of the consumer to understand the term or conditions of the loan product. a) unfair b) deceptive c) abusive d) reasonable ​ Who is responsible for the completion of the URLA? a) the processor b) the mortgage loan originator c) the borrower d) the lender ​ According to ECOA, which is an allowable inquiry an MLO may make during an application? a) ask a woman her capability to bear children b) ask about birth control  practices c) ask the age of the dependents they may have d) ask if they have child support income ​ The CFPB has provided guidance on which of the following agreements related to RESPA Section 8: a) Co-marketing b) Co-branding c) Social media d) Marketing Service Agreements ​ What rule prohibits the use of forged, counterfeit, lost, or stolen documents to obtain customer information from a financial institution? a) The Pretexting Rule b) The Disposal Rule c) The Financial Privacy Rule d) The Red Flags Rule ​ What federal law requires lenders to provide housing counseling disclosures to borrowers? a) Truth-in-Lending Act b) Real Estate Settlement Procedures Act c) Gramm-Leach-Bliley Act d) Ability to Repay Act ​ The government sponsored enterprise major role in mortgage lending has been to… a) standardize and structure conforming guidelines to increase mortgage investor cash flow to the market b) protect lenders from fraudulent loans by identifying the bad players c) generate funds for Fannie Mae and Freddie Mac to fund more loans d) to fund home loans for low income homeowners ​ What is the percentage of APR tolerance allowed by TILA for a regular transaction? a) 0.25% b) 0.38% c) 0.13% d) 0.50% ​ A misleading act or practice is considered _______ when it cannot be reasonably avoided by consumers. a) unfair b) deceptive c) abusive d) reasonable ​ What does the Negative Option ARM recast feature do? a) fixes the interest rate b) allows the borrower to refinance without qualifying c) caps the adjustments to reduce payment shock d) amortizes the loan for the remaining term to ensure it is paid off by end of loan term ​ What entity handles mortgage loan collections and foreclosure issues? a) Investor b) Servicer c) Wholesaler d) Mortgage Loan Originator ​ A misleading act or practice is considered _______ when a consumer's interpretation of the representation is considered reasonable. a) unfair b) deceptive c) abusive d) reasonable ​ Both TILA and RESPA establish a loan request as an application when… a) the required six pieces of information from is received from the consumer b) when they pull the borrower's credit report c) when the borrower makes a request for credit d) when the borrower receives a purchase contract acceptance on a property Test 7 ​ Per FACTA, in a situation where a creditor discloses to a consumer credit reporting agency negative information the creditor must disclose that information to the consumer. The disclosure must be made to the consumer no later than: a) 30 Days after the negative information was provided b) 60 days after the negative information was provided c) They are not required to disclose it to the borrower at all d) Creditors cannot report negative information without informing the borrower first ​ What laws requirements can be satisfied by disclosing the Notice to Home Loan Applicant to borrowers? a) FCRA b) FACTA c) GLBA d) Regulation N ​ Victor is working with borrower Jennifer. Jennifer is applying for a loan without a co-borrower. Jennifer never mentioned a spouse but is wearing a wedding ring, how can Victor ask Jennifer if she is married or not? a) He can't unless they are in a community property sale b) He can ask if she's married, unmarried or separated c) He can ask if she's married, divorced or single d) He can ask if she's married, never married or widowed ​ Which of the following is an acceptable source of funds to cover reserves for a mortgage loan transaction? a) funds that have not been vested b) cash value life insurance funds c) interested party contributions d) cash proceeds from subject property refinance ​ For what reason do lenders 'season' the borrower's cash to close? a) the lenders do not like new money b) provide sufficient time for a debt to show on the credit report c) borrowers are better prepared to close because money is verified in the account d) to meet Dodd Frank Act requirements ​ To determine if a borrower's assets are an acceptable source of funds, the underwriter will look for all but which ONE of the following? a) Source of funds b) Withdrawal of funds c) Seasoning of funds d) Ownership of account ​ MLO Jones is working with borrower Natasha. She doesn't qualify for the loan she requested and Jones provides a counter offer from underwriting. How long does MLO Jones have to notify Natasha of an adverse action if she does not accept the counteroffer? a) 30 calendar days b) 90 calendar days c) 60 calendar days d) 15 calendar days ​ What is Safe Harbor called when a QM loan is not considered a higher-priced mortgage? a) rebuttable presumption b) Presumption of Compliance c) nothing d) a QM loan is always higher-priced ​ The daily interest for the borrower’s loan is $17.44. They close on the 15th of the month, and there are 15 days before the 1st of the next month. How much prepaid interest do they have to pay? a) $261.60 b) $279.04 c) $523.20 d) $348.80 ​ What source of down payment is NOT acceptable for Federal Housing Administration (FHA) financing? a) 100% Gift b) unsourced funds c) cash on hand d) sweat equity ​ Which is considered a change of circumstance that allows a revised Loan Estimate? a) Addition of flood insurance that does not cause a program or product change b) Borrower's monthly income comes in less than initial estimate and does not cause a program or product change c) Add co-borrower and does not cause a program or product change d) Change in the borrower's credit report information that does not cause a program or product change ​ When a veteran does not have sufficient tradelines on his credit report, what can be used to establish credit history? a) letters of credit from their employer b) alternative credit references c) three months bank statements d) proof of annually paid creditor history ​ Which is NOT a key point when a mortgage lender reviews the borrower's source of funds to close? a) does borrower have sufficient funds to close the loan b) are the funds from an acceptable source c) is the borrower the owner of the account d) is the financial institution federally insured  ​ A new applicant for a mortgage loan originator license must complete how many hours of pre-licensing education prior to submitting an application? a) 20 b) 25 c) 8 d) 10 ​ According to Home Mortgage Disclosure Act, when a lender treats applicants differently based one or more of the ECOA prohibited factors, it's called... a) disparate treatment b) disparate impact c) prohibited treatment d) overt discrimination Test 8 ​ What federal law requires yearly training on it of all employees for a lender to be compliant? a) TILA b) RESPA c) BSA/AML d) GLBA ​ What is money from your mortgage lender to help the borrower cover closing costs for the loan? a) table funding b) lender credit c) early payment d) delinquent payment ​ Under TILA, a lender is considered to have regularly offered credit if they extend more than how many times in the preceding calendar year: a) 25 times b) 10 times c) 20 times d) 15 times ​ Which would be a violation of the Fair Housing Act? a) requiring a property appraisal b) discouraging a potential borrower from making a loan application c) requiring the borrower be of legal age to enter into a contract d) asking if they pay alimony or child support ​ The Dodd-Frank Wall Street Reform and Consumer Protection Act includes a __________ to clarify the steering/LO Compensation provisions of the legislation. a) Reform Guide b) Framework c) legislative interpreter d) fraud handbook ​ Which would NOT require you to disclose your Unique Identifier? a) test enrollment b) loan application c) privacy notice d) marketing pieces ​ Who is allowed to make a credit decision on a borrower's credit request? a) underwriter b) mortgage loan originator c) processor d) loan funder ​ Which of the following is false about FHA's mortgage limits? a) FHA calculates forward mortgage limits by Metropolitan Statistical Area and county b) FHA is required by the National Housing Act to set singlefamily forward loan limits at 115% of median house prices, subject to a floor and a ceiling on the limits c) The floor applies to "low-cost areas," which are counties where 115% of the median home price is less than the floor limit d) FHA mortgage limits are calculated every 3 years ​ NMLS licensing requires how many years past employment history with no gap without explanation. a) 10 b) 2 c) 5 d) 7 ​ A mortgage broker licensee wishes to surrender his license. How is this handled? a) surrender his original license issued b) notify state licensing agency c) send notification through NMLS d) prior to closing a branch they must notify the state licensing agency through NMLS ​ Which of the following would NOT be part of a company's ethical policies and procedures? a) zero fraud tolerance policy b) whistle-blower prevention policy c) High standards for Quality Control procedures d) Consistent and routine employee education policy ​ Which is NOT a true statement regarding reserve requirements? a) They can be the equity in the property b) they reduce the risk for default c) based on the number of house payments required ​ What borrower asset may be used to secure cross-collateralized funds for closing? a) stock portfolio and checking account b) certificate of deposit and IRA c) different retirement account d) home they are exiting ​ which is a true statement in regards to a 1003 application? a) the application is an optional form in the loan file b) the APR is disclosed c) does not include the property address d) the application should be filled out completely to expedite processing ​ Per TILA, an MLO may no longer be paid based on... a) the borrower's ability to pay the cost b) the terms or conditions of the transaction c) their time spent on the transaction d) an hourly wage, only commission earning were allowed ​ What are the affects when a borrower rescinds a loan transaction? a) The loan funds faster b) The security instruments are void c) Loan is sold to another lender d) Cancels the home purchase agreement ​ All of the following are reasons why the borrower's loan did not close on time. Which one was due to the MLO performance? a) borrower withdrew the application b) borrower made a material misrepresentation on the loan application c) borrower did not provide all the required documentation d) borrower's complete 24 month employment history was inaccurate on the loan application ​ Which of the following types of money transfers are allowed to disburse loan funds? a) cash b) wire to borrower's account c) AHC funds transfer d) letter of credit ​ The Economic Growth, Regulatory Relief and Consumer Protection Act ammeded FCRA and extended fraud alerts from 90 days to: a) 1 year b) 2 years c) 120 days d) 3 years ​ What section of the new URLA does the borrower have to declare whether or not they have had a foreclosure or bankruptcy? a) Sections 2a, 2b, & 4d b) Section 5b c) Section 5a d) Section 4 ​ When a consumer is on the Do Not Call Registry, he/she has special rights. How long may you solicit a potential DNC borrower that has called in from one of your marketing ads? a) 3 months b) unspecified period of time c) 30 days d) 18 months ​ The Fair and Accurate Credit Transaction Act requires the borrower be given a disclosure. What is the name of the disclosure required? a) FACT Act Red Flag Rule Disclosure b) Cooling Off Disclosure c) Notice to Home Loan Applicant d) Identity Theft Loan Disclosure ​ NMLS licensing requires how many years past residence history with no gap without explanation. a) 10 b) 2 c) 5 d) 7 ​ According to conforming guidelines, a deposit on the bank statements is considered large if more than: a) 25% of the borrower's monthly income b) 50% of the borrower's monthly income c) the largest withdraw from account d) over $1000 regardless of borrower's monthly income ​ Which disclosure informs the consumer if the funding lender will retain their loan for servicing? a) Privacy Policy disclosure b) Loan Estimate c) Notice to Home Loan Applicant d) RESPA Informed Consumer disclosure