Mortgage

FHLMC

HARP

HUD

LIBOR

PITI

Fannie Mae's Electronic Underwriting Method.

FHA Qualifying Debt to Income Ratios.
41% / 41%
31% / 43%
28% / 36%
38% / 42%

Conventional Loan Qualifying Debt to Income Ratios.
41% / 41%
31% / 43%
28% / 36%
38% / 42%

VA's Qualifying Debt to Income Ratios.
41% / 41%
31% / 43%
28% / 36%
38% / 42%

FCRA

F.A.C.T. Act

An Asset pledged to back a mortgage loan is called...
e.g., Real Estate.
"Part of the Four C's of Financing."
A)Capacity
B)Collateral
C)Character
D)Capitol

Borrowers "ability" to prepay a loan.
"Part of the Four C's of Financing."
A)Capacity
B)Collateral
C)Character
D)Capitol

A borrowers financial history. How they have paid their debts in the past.
"Part of the Four C's of Financing."
A)Capacity
B)Collateral
C)Character
D)Capitol

Liquid assets for downpayment and reserves.
"Part of the Four C's of Financing."
A)Capacity
B)Collateral
C)Character
D)Capitol

Name The "Four" C's of Financing.

FHFA

FHA

ECOA

A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

RESPA

Which of the following Federal Agencies creates the regulations for TILA?
A) Federal Trade Commission
B) HUD
C) FHA
D) Federal Reserve Board

How long must a lender wait before Settlement after providing Early Disclosures?
A) 1 business day.
B) 3 business days.
C) 10 business days.
D) 7 business days.

A non-purchasing spouse is required to provide a credit report showing their debts. Where has the loan taken place?
1. In a wet settlement state
2. In a community property state
3. In a title theory state
4. In a state that uses the mortgage as a security instrument

An applicant is not provided the loan program options that would make the loan within a certain subdivision more affordable. This is a violation of the:Ethics, Fraud, Fair Lending
1. Fair Housing Act
2. Fair Credit Reporting Act
3. Real Estate Settlement Procedures Act
4. Truth-In-Lending Act

The Home Mortgage Disclosure Act is designed to:
1. Itemize settlement charges
2. Track the MLO’S annual origination volume
3. Combat abusive practices in lending such as high cost and kickbacks
4. Identify patterns of discrimination in lending

The following disclosure is not a RESPA disclosure:
1. The Special Program ARM disclosure
2. The Good Faith Estimate
3. The Affiliated Business Arrangement disclosure
4. The Special Information Booklet

The practice of identifying a particular zip code with a high percentage of minorities and deciding not to do business there due to the number of high risk clients according to FHA is:Ethics, Fraud, Fair Lending
1. Good business practice
2. Redlining
3. Redistribution
4. Effective lending

The following statement is not correct relating to red flag requirements:
1. The FTC has published 26 possible red flag items that can be incorporated within a written plan
2. A mortgage lender and not a mortgage broker is required to have a red flag program
3. A mortgage broker is considered a creditor
4. A covered account is a mortgage loan

A real estate agent directs a potential buyer away from a subdivision he is interested in because the agent feels he should be in an environment where more residents from his country of origin live. This is called:
1. Cultural development
2. Redlining
3. Steering
4. Redistribution

The Truth-In-lending Act provides a right to rescind. Which statement would not reflect the law?:
1. Consumers have 3 business days to rescind
2. The choice to rescind requires the signatures of all parties
3. Saturday is included in the rescission period
4. Failure to provide the correct disclosure could result in a 3 year right to rescind.

The following is correct relating to basis points:
1. 75 basis points equals 7.6 percent
2. 1/8th is equal to 12.5 basis points
3. .50 is equal to 5 basis points
4. 1 discount point is equal to 1 basis point

FCRA was created to provide consumer protections, the following is not correct:
1. FCRA requires and Adverse Summary notice for credit denial
2. FCRA provides regulations for credit reporting agencies
3. FCRA was extended permanently in 2003 by FACTA
4. Collections and judgments remain on the credit report for 10 years

FACTA deals primarily with which of the following?
1. Protections against abusive lending practices
2. Identity theft
3. Discrimination in the extension of credit
4. Privacy

The Telemarketing Sales Rule prohibits protects customers that have registered on the Do Not Call Registry. Which of the following would be a violation that could result in a $16,000 fine?
1. A MLO contacts a customer on the do-not call list 16 months after the closing
2. A MLO working for a lender/servicer contacts a customer on the do not call list 24 months after the customer closed on a 15 year mortgage and is still making payments
3. A MLO contacts a customer on the company do not call list 2 months after the customer made a credit inquiry.
4. The MLO contacted a customer not on the registry 2 years after closing

The following statement is correct relating to Fannie Mae credit scores used for loan qualification or referred to as a representative credit score:
1. The lower score of three should be used
2. The middle score of three should be used
3. The lower score of three scores should be used
4. The average score of three scores should be used

The income approach used in valuing property during an appraisal considers the following:
1. The replacement cost of the property
2. The average median income levels of the community
3. The qualifying income levels of the community
4. The fair market rental earnings of similar homes

Under Section 8 RESPA, a payment is considered:
1. Equal to receiving or giving a thing of value
2. Cash or check
3. A bona fee which is comprised of cash or a liquid cash equivalent
4. Money given or received by the referring party to a transaction under a federally related mortgage loan

Fannie Mae exists primarily for the following reason:
1. To provide a standardized underwriting system
2. To reduce leverage in the lending
3. To compete with FHA
4. To provide a secondary market source for purchasing loans

Which of the following would be incorrect?
1. Fraud for housing generally involves family members
2. Fraud for housing includes income misrepresentation
3. Fraud for housing generally involves a profit motive
4. Fraud for housing is a criminal act

What percentage above $144,000 will VA guarantee?
1. 20% of the Freddie Mac conforming limit
2. 25% of the Freddie Mac conforming limit
3. 40% of the Freddie Mac conforming limit
4. 50% of the Freddie Mac conforming limit

A borrower has applied for a loan on a new purchase and the appraisal has been ordered. According to ECOA, what are the rights of the borrower relating to receiving a copy of the appraisal?
1. The creditor shall mail or deliver a copy of the appraisal report promptly (generally within 10 days) after the creditor receives an applicant’s request, receives the report, or receives reimbursement from the applicant for the report, whichever is last to occur
2. A creditor shall mail or deliver a copy of the appraisal report promptly (generally within 30 days) after the creditor receives an applicant’s request, receives the report, or receives reimbursement from the applicant for the report, whichever is last to occur
3. A creditor need not provide a copy when the applicant’s request is received more than 30 days after the creditor has provided notice of action taken on the application
4. A creditor need not provide a copy when the applicant’s request is received more than 60 days after the creditor has provided notice of action taken on the application

A servicer that transfers a loan must notify the borrower:
1. Within 60 days after the transfer
2. Within 15 days after the transfer
3. Within 30 days after the transfer
4. Within 15 days prior to the transfer

What is an “Air Loan”?
1. A loan for a condo
2. A fictitious borrower obtains a mortgage and secures it with a fictitious property
3. A borrower puts down a large down payment lowering the payments
4. There is no such thing as an “air loan”

A MLO pre-qualifies a client for a cash-out refinance. When would the resulting transaction be considered unethical?
1. The client lowers the interest rate and gets cash out
2. The MLO earns $3000 and the client gets total $500 cash out with no change in terms/conditions
3. The interest rate is lowered and the term is shortened and the cash out is minimal
4. The refinance was considered a net tangible benefit to the client

What is a straw buyer?
1. A buyer located in a rural area
2. An individual accepting a fee to use his or her credit to purchase a home as owner occupied when the purchaser has no intention of occupying the property
3. An individual purchasing a home with no money down financing
4. A buyer that purchases a property and delays occupying the property for 2 months

A MLO has a good relationship with a real estate agent. The agent often refers the MLO business. The MLO generally gives the agent a gift card for Home Depot that is less than $25.00 which was a gift to the MLO from a non-real estate related transaction. Has RESPA chapter 8 been violated?
1. Yes, since it had a specific value associated with it. It is considered cash
2. No, the MLO did not pay for the gift
3. Yes, a referral fee is not permitted on a federally related mortgage transaction
4. No, the gift was less than the statutory $25.00 limit

According to ECOA, when can a borrower request a copy of an appraisal and the lender is not obliged to provide it?
1. 30 days after action has been taken
2. 90 days after action has been taken
3. 60 days after action has been taken
4. 120 days after action has been taken

The potential penalty for fraud in the residential mortgage industry is:
1. $500 fine
2. 30 years in prison and/ or $1,000,000 fine
3. 10 years in prison and a $1,000 fine
4. $5,000.00 fine

The following is not a requirement for a reverse mortgage HECM:
1. The equity in the property is decreasing
2. All borrowers must be credit worthy
3. All borrowers must go to mandatory counseling
4. All borrowers must be age 62 or older

A loan originator is interviewing a borrower during a loan application process. The applicant is self-employed and has been for the past 5 years. What form will the loan originator have the applicant to sign to provide verification for the earnings used to qualify the borrower?
1. IRS Form 8921
2. IRS Form 1099
3. IRS Form 2106
4. IRS Form 4506T

A mortgage broker advertises with a realtor in a local magazine. Which of the following would be a violation of RESPA?
1. The real estate agent pays cash for her portion but the mortgage broker use deferred billing for the broker\'s portion of the costs
2. Shared advertising between settlement service providers is exempt from RESPA regulations
3. Each party uses about half the space in the ad and share the cost equally
4. The mortgage broker pays for the ad because the real estate agent gives her referrals

When is a buyer not required to purchase flood insurance?
1. If only the land being purchased is in a SFHA
2. If the Lender determines that the structure is in a SFHA
3. If the structure is located within a SFHA
4. The mobile home is located in a SFHA

HMDA requires the following disclosure on all qualifying loans:
1. The date of the first payment
2. The name of the MLO
3. The race, ethnicity, sex and income of the applicant
4. The cost of the settlement services

Fee Simple ownership means:
1. The highest level of ownership in residential real estate
2. A owner has life interest
3. The ownership extend to the interior walls
4. The real estate is paid in full

A MLO is trying to determine the interest for 6 months when the LTV is 80 percent the appraised value is $250, 000 and the contract sales price is $240,000. The loan interest rate is based on a margin of 2% and the index used is the LIBOR at 2.25%.
1. 2160
2. 5312.50
3. 4080
4. 5100

The SAFE Act is title V of which law?
1. The Safe and Fair Enforcement for Mortgage Licensing Act
2. The Housing and Consumer Protection Act
3. The Housing and Economic Recovery Act
4. The Housing and Urban Development Act

A real estate agent moves a minority family into a non-minority neighborhood and then solicits sales listings from the residents under the fear that their property value will decrease. This is referred to as:
1. Neighborhood realignment
2. Blockbusting
3. Redlining
4. Effective listing strategy

The FHA electronic underwriting program is:
1. LP
2. DU
3. Total Score Card
4. Direct Endorsement

A MLO pre-qualifies a client for a 3/1 ARM loan. The margin is 2.5% and the index is 2.5%. The caps are 2 1 6. The rate did not change on the first adjustment. What is the rate on the second adjustment if the index is 3.25%?
1. 5%
2. 5.75%
3. 6%
4. 7%

A borrower is trying to determine if he will need private mortgage insurance on his conventional loan. The property is appraised for $200,000, the sales price is $195,000, the loan amount is $140,000 and there is a second mortgage for $40,000. Which of the following answers is correct?
1. The borrower will not need PMI because the LTV is less than 90%
2. The borrower will need PMI because the LTV is greater than 80 percent
3. The borrower will not need PMI because the LTV is less than 80%
4. The borrower will need PMI because the CLTV is greater than 90 percent

What is the Safeguard Rule?
1. A rule issued by HUD to protect consumers from excessive fees
2. A rule issued by the FTC that requires companies to have measures to keep customer information safe
3. A rule for depository financial institutions to protect the transfer of electronic information
4. A rule that protects the contractual details between a broker and its employees

A mortgage and deed of trust would be best described as:
1. Security instruments held in first position2. A promise to pay a debt
3. Security instruments used to collateralize real estate loans
4. A lien against the mortgagee’s interest in the property

A veteran with full entitlement is considering a loan as a first time home buyer. Which of the following statements would not be correct about the various options?
1. Any loan program would require income and credit qualifying with the FHA loan being the easiest to qualify for
2. A conventional loan with 5 percent down payment, monthly private mortgage insurance which is part of the monthly payment
3. A FHA loan is available with a 3.5% down payment and an up front mortgage insurance premium which can be financed. The down payment can be a gift from the seller or a neighbor
4. A VA loan is available with zero down payment, a 2.15 % up front funding fee which can be financed into the loan.

When would a lender not be required to cancel private mortgage insurance?
1. The borrow presents an appraisal reflecting an 18% equity position
2. The borrower had a 30 day late 14 months ago
3. The LTV based on the original value is 78%4. The original value was $200,000 and the current loan balance is $150,000

According to ECOA, age may be considered in the decision to discriminate against a borrower under the following conditions:
1. The borrower is elderly and based on current actuarial statistics would not likely live beyond the loan period
2. Age can never be used as a means to discriminate
3. To determine if the age of the borrower allows for entrance into a legally binding contract
4. To provide the lender a reasonable basis to determine the probability of loan repayment

Under SAFE Act definitions which of the following would be a nontraditional mortgage product:
1. A 30 year fixed rate mortgage
2. A 30 year refinance on a primary residence where the P&I never change
3. A 15 year balloon amortized over 30 years
4. A 30 year fixed rate mortgage with a par interest rate

An applicant is receiving monthly income from a state family aid program because he meets the income standard and family size requirements for the program. The oldest child is 11 years old. What are the ECOA regulations relating to the extension of credit to the applicant?
1. A creditor can exclude the income from the state program when qualifying the borrower
2. The applicant is entitled to have the income from the state assistance program considered in the qualification for the extension of credit
3. Excluding the income from the state program is not a violation of ECOA because public assistance programs are not included as a prohibitive basis category
4. An applicant receiving public assistance would not be a credit worthy borrower

A MLO has just closed a cash- out refinance for the third time on a client within the last 2 years. Each time the MLO charges the maximum allowed under the law for commissions and fees. What might the MLO be guilty of?
1. Fair lending
2. Chunking
3. Churning
4. Good business

ECOA and FCRA require an adverse summary notice within how many days of denying a completed application for credit reasons?
A) 30 days
B) 45 days
C) 60 days
D) 90 days

Which of the following statements is incorrect relating to a self-employed borrower?
1. A self-employed borrower for underwriting purposes can be a W2 employee
2. The self-employed borrower must provide 1 year of recent tax returns
3. Depreciation can be added to self-employment income to qualify the borrower
4. The average over 2 years is used to qualify the self-employed borrower as long as there is equal or increasing income

Which of the following would be the incorrect ECOA category?
1. divorced
2. separated
3. married
4. unmarried

A MLO is completing a loan application with an applicant. Which of the following is an incorrect action by the MLO?
1. The MLO determined that the borrowers only income was from social security and grossed up the social security by 25 percent
2. The borrower received a gift and put the funds in the bank. The MLO included gift as a source of the down payment and the funds were identified in the banking information section
3. The loan amount on the front page of the application include the CLTV
4. The borrower decides not to identify their ethnicity and the MLO makes a best guess and completes the section

RESPA has introduced a new good faith estimate which went into effect in January 2010. The following statement is correct.
1. My origination charge has a zero tolerance
2. Any discount charge is included in my origination charge total
3. Lenders are required to disclose the YSP in my origination charge
4. Broker yield spread premium is included in the borrowers origination charges

If the fully indexed rate is 5.375 percent and the margin is 2.5 percent, what is the index?
A) 2.75%
B) 2.35%
C) 2.875%
D) 2.25%

A VA Appraisal is ordered by the VA and is referred to as a:
1. VA appraisal
2. Certificate of Reasonable Value
3. Government appraisal
4. VA housing value report

The following is incorrect about the Truth-In-Lending Act:
1. It addresses loans for personal, family or household purposes
2. It is implemented by the Consumer Financial Protection Bureau
3. It is Regulation B
4. It addresses loans for personal, family or household purposes

The Freddie Mac automatic underwriting system is:
1. DO
2. LP
3. FP
4. DU

The current conforming standard mortgage limit for a single family residence is:
1. 472,000
2. 208,500
3. 450,000
4. 417,000

The Home Ownership Equity Protection Act (HOEPA) establishes the APR and points and fees threshold for:
1. FHA section 203b loans
2. Illegal loans
3. Section 226.32 high cost loans
4. Loans identified as non-conforming

The following is not correct relating to the affiliated business arrangement disclosure:
1. Required no later than when the referral is made
2. Required for an associate relationship
3. Required when the referring entity owns 1% or more of the other entity
4. Required within 3 business days of receiving the application

During the pre-qualification process the client is not sure if he wants to move forward with the loan. What information is the MLO not allowed to provide that could help the client make a decision?
1. Show the savings over the life of the loan
2. Show the advantages of having a lower interest rate
3. Explain the benefits of a bi-weekly payment option
4. Explain the tax advantages of mortgage insurance and interest payments

A MLO has just completed an application for a refinance ARM loan and is ready to send out the early disclosures. Which of the following disclosure choices is the correct one?
1. The Affiliated business arrangement disclosure is being sent out on day 3 blank because the referral has not been made
2. The early disclosures are being mailed on the 3rd business day even though an adverse summary has already been sent
3. The early TILA disclosures are the TILA disclosure, ARM program disclosure and the CHARM booklet
4. The early RESPA disclosures are the GFE, the information booklet and the servicing disclosure

The following individual would not be considered handicapped under the Fair Housing Act:
1. A veteran that lost a limb in the war
2. An heroin addict
3. An elderly person with recent hip surgery
4. A blind person

An appraiser is performing an appraisal on a home in a subdivision that is 10 years old. He has to decide which appraisal method would be best for establishing value. Which of the following methods would provide the best estimate of value?
1. The income approach
2. The fair market rental approach
3. The market approach
4. The cost approach

Regulation Z implements the Federal Truth-in-Lending Act (TILA) under the authority of which federal agency?
1. The Department of Housing and Urban Development
2. The Federal Reserve Board
3. The Consumer Financial Protection Bureau
4. The Federal Deposit Insurance Corporation

The fee a borrower pays to a lender to obtain a particular rate below par is known as:
1. Discount
2. Yield spread premium
3. Broker fee
4. Origination

This mortgage, generally held in a second lien position, allows a borrower to pay down the balance and borrower against it again in the future without seeking another approval. What type of loan is this?
1. Second Mortgage
2. HELOC
3. Bridge mortgage
4. Adjustable rate mortgage

Which statement is incorrect relating to the National Flood Insurance Program?
1. The lender has the responsibility of determining if flood insurance is required
2. The structure must be in the SFHA for flood insurance to be required
3. An SFHA is a Special Flood Hazard Area
4. The NFIP is administered by the Federal Environmental Management Agency

Under what condition may “Our origination charge” be changed?
1. The lender has determined that the margin was quoted to low
2. The MLO made a mistake and failed to include the YSP in the charge
3. The borrowers debts exceed the original information the GFE is based on
4. The Cost of Funds Index (COFI) increases

Privacy disclosures giving the borrower an opportunity to opt out of having their information shared between affiliates are required under:
1. GLBA
2. FCRA
3. TILA
4. ECOA

As a general rule the APR is considered accurate if the variance is not more than__% above or below the APR determined by the actuarial method or the United States method:
A) ¼ or 1 percent for a regular loan and 1/8th of 1 percent of an irregular loan
B) 1/8th of 1percent for a regular loan
C) 1/8th percent for both a regular and irregular loan
D) ¼ percent for both a regular and irregular loan

With this type of mortgage program the payments are reduced during the early years of the permanent loan:
1. Construction loan
2. Fixed-rate mortgage
3. Bi Weekly Program
4. Temporary buy down

A borrower has applied for a new loan. According to ECOA, the creditor is required to notify the borrower regarding his right to receive a copy of the appraisal. Which statement is correct?
1. Because of the Fannie Mae HVCC requirements there is no longer a notification requirement
2. Within 5 days of settlement
3. Within 3 days of taking the application
4. The creditor can notify the borrower anytime during the application process but no later than when action on the loan has been taken

The following is incorrect relating to the GFE and the Hud1:
1. The Hud1 must be made available to the borrower upon request within 24 hours of settlement
2. The GFE must be signed within 3 business days of receipt
3. The Hud1 is an accounting of actual costs
4. The GFE has 3 pages

Which of the following is incorrect relating to Fannie Mae underwriting requirements?
1. A borrower keeping an existing home and buying another must have 6 months reserves for both properties
2. 100 percent of rental income can be used for income qualifications
3. A borrower has 60 days to occupy a primary residence after closing
4. A borrower that earns 25 % of their income in commission or incentives is considered self employed

A MLO is determining the qualifying ratio for a potential client. The client earns $4000 a month before taxes with a 28% tax deduction rate. The PITI is $ 800 per month and the total debts are $1700 per month including cell phone of $56 and utilities of $94. What are the housing ratio and the debt to income ratio?
A) 22.35%, 62.5%
B) 20%, 62.5%
C) 20%, 38.75%
D) 20%, 58.75%

RESPA requires that the settlement charges be made available to the consumer for how many days after providing the GFE?
A) 30 business days
B) 10 business days
C) 60 business days
D) 3 business days

An applicant has two jobs. He has been working his full-time job for 3 years and earns a salary of $27,000 per year. He has a lease payment for $300 per month. He receives his pay on a bi-weekly basis. The prospective homeowner consistently works a part-time job for the last 3.5 yrs. Last year he earned $8,200 and $6,600 the previous year at his part-time job. Calculate the income a mortgage loan originator will use to qualify him for a mortgage.
A) $2765.66
B) $2250.00
C) $2866.66
D) $2933.33

The SAFE ACT is an acronym for:
1. Safe and Fair Enforcement for Mortgage Licensing Act
2. Secure and Factual Enforcement for Mortgage Licensing Act
3. Safe and Factual Enforcement for Mortgage Licensing Act
4. Secure and Fair Enforcement for Mortgage Licensing Act

One of the result of the Alternative Mortgage Transaction Parity Act was:
1. To increase the fees on loans
2. Force states to allow adjustable rate mortgages
3. To make fixed rate loans the only alternative
4. To prevent prepayment penalties

The acronym DIDMCA represents:
1. Depository Institutions Deregulation and Monetary Control Act
2. Depository Installment Determination and Monitoring Act
3. Depository Instability Determination and Monetary Act
4. Depository institutions Dividend Market Calculation Act

A MLO uncovers during the interview of an applicant that there is a child support payment that is not listed on the pay stub or credit report. The MLO decides not to include the payment on the 1003. How would this action be defined?
1. Unethical
2. Legal
3. Ethical
4. Illegal

Under Regulation Z the time that a consumer becomes contractually obligated on a transaction is referred to as:
1. Finalization
2. Actualization
3. Consummation
4. Settlement

A MLO is creating a flyer for an open house with a real estate agent. Three payment options are promoted including term of loan, monthly principal and interest, and the APR percent. Which of the following must be included?
1. The interest rate
2. Any balloon payment
3. The lock term limits
4. The YSP

A borrower has a mortgage of which he has been making mortgage payments that do not cover the monthly interest and the loan balance continues to increase. The results of this would be:
1. ARM
2. Deferred Interest
3. Buy down
4. Construction permanent

The passing score for the SAFE Mortgage Licensing Act national and state exams is:
A) 70%
B) 75%
C) 50%
D) 80%

Which of the following cost is not allowed to have a 10 percent tolerance under the GFE?
1. Settlement fees to the settlement agent
2. Underwriting fee to the lender
3. Credit report fee to the credit report company
4. Appraisal fee

The Fannie requirement for providing a copy of the appraisal to the consumer under provisions of the Dodd Frank Reform Act is:
1. Delivered 7 days before closing
2. Delivered 3 days before closing
3. Delivered 7 days after closing
4. Delivered 3 days after closing

The following statement is correct relating to qualifying ratios:
1. A housing ratio of 25 percent would qualify under conventional underwriting guidelines
2. The DTI would generally be lower than the housing ratio
3. The DTI is the total debts including cell phone and utilities as a percentage of gross monthly income
4. The housing ratio is a percentage of the PITI to net monthly income

Which of the following statements is correct relating to seller paid closing costs on an owner occupied conventional purchase and the loan amount is $150,000?
1. If the sales price is $160,000 the maximum seller contribution is $3200.00
2. There is no maximum seller contribution
3. If the sales price is $160,000 the maximum seller contribution is $4500
4. If the sales price is $160,000 the maximum seller contributions is $4800

A MLO generally charges between $2500 and $4500 for his fees to his clients. Which of the following would be an illegal act?
1. Charging his brother-in-law 1 percent origination and 50 basis points in YSP on a $200,000 loan all included as “My Origination Charge”
2. Charging his uncle a .5 percent origination on a $150,000 loan amount
3. Charging a new home buyer with numerous challenges a 3 percent origination fee on a $140,000 loan amount
4. Charging a client with a 780 credit score 1 percent origination on a $300,000 loan amount

Which of the following in a refinance would not be found on a Hud1 settlement statement?
1. Closing costs
2. Annual Percentage rate
3. Real Estate Commission
4. Origination charge

A mortgage broker buys leads for its business, which of the following would be a violation of RESPA?
1. Getting the leads on credit and paying only when the loan closes
2. Paying the employees a commission when they close a loan from the lead list
3. Soliciting the individuals on the lead list
4. Paying more than $5.00 per lead

A jumbo loan is considered a loan that:
1. Is a high cost loan under the fair lending guidelines
2. Is a loan for overweight borrowers
3. Is a loan that exceed the FHA loan limits
4. Is a non-conforming loan

Which two items does a lender add together to establish the interest rate for an adjustable rate mortgage (ARM)?
1. Index and annual cap
2. Interest rate and margin
3. Margin and fully index accrual rate
4. Index and margin

A client has maxed out his credit cards and asks the MLO for a loan solution. He currently has 17 years left on his mortgage. Which of the following would likely be an unethical activity?
1. The MLO qualifies him for a 20 year loan lowering the interest rate and giving him some cash out to pay some bills
2. The MLO qualifies him for a 30 year cash out loan paying off all the bills
3. The MLO qualifies him for a 20 year rate and term lowering his monthly payment
4. The MLO advises the client that financing a new loan to pay of the debts would cost him substantially more over the life of the loan and recommends that he not pursue the financing

What federal agency is charged with the responsibility of protecting consumers from deceptive and unfair practices?
1. The Federal Consumer Protecting Agency
2. The Consumer Financial Protection Bureau
3. The Federal Reserve Bank
4. The Federal Communications Commission

HMDA is required for most mortgage companies. Which of the following would be exempt from HMDA reporting requirements?
1. A mortgage broker with 105 home improvement loans
2. A mortgage lender with 1500 owner occupied loans
3. A bank with 40 million in assets
4. A mortgage broker that closed 120 loans with 25 non owner transactions

A borrower wants to lower their interest rate the following statement is incorrect:
1. The lender will allow a 1/8th tolerance before charging a fee to lower the rate
2. The discount fee is added to our origination charge on the GFE
3. The MLO is not allowed to get a YSP if a discount fee is charged.
4. A discount fee will be charged to the borrower also known as permanent buy down

Which document contains a historical listing of all property owners in chronological order?
1. Title examination
2. Title binder
3. Abstract title
4. Marketable title

Fannie Mae will generally not accept an appraisal with a comparable gross adjustment above a certain level. What is the gross adjustment threshold?
A) 15%
B) 25%
C) 20%
D) 30%

The entity that protects lenders interest by providing a 100 percent insurance protection for losses in the event of a borrowers default is:
1. The Veterans Administration
2. Department of Housing and Urban Development
3. Fannie Mae
4. Freddie Mac