1. The penalities for paying or accepting an illegal referral fee are:

    C. fines of up to $10,000 and up to 1 year in prison
  2. Finance charges always include which of the following?

    D. mortgage broker fee
  3. A loan contains prepayment penalities. Which of the following documents would a borrower review to confirm this?

    A. TIL Disclosure and promissory note
  4. For the purposes of rescinding a loan transaction, "business days" includes every day of the week except:

    C. Sundays and Federal holidays
  5. Five siblings have ownership rights to a property. If a refinance transaction affecting the property is subject to rescission, how many of these individuals must submit a rescission notice in order to void the loan?

    C. any one of the five
  6. Who must receive a Notice of Right to Cancel in a refinance transaction?

    A. anyone with ownership interest in the property
  7. John Brown and Jane Brown are co-owners of a property and are entering into a refinance transaction that is subject to rescission. John is provided with one copy of Notice of Right to Cancel and Jane receives no disclosures. What is their deadline for rescission?

    B. three years after closing
  8. Which of the following fees is not included on the Good Faith Estimate?

    D. real estate broker fees
  9. If a mortgage broker is receiving yield spread premium on a loan transaction, on which of the following documents must the amount be disclosed?

    C. GFE
  10. The TIL Disclosure Statement must be re-disclosed to a borrower if:

    C. the APR varies more than 1/8th of 1% before closing
  11. Lenders must report detailed information about loan transactions and demographic information concerning borrowers in order to prove they are not discriminating. Which of the following laws creates that reporting requirement?

    A. HMDA
  12. Yield spread premium is disclosed to the borrower:

    A. on the GFE and Settlement Statement
  13. Aggregate escrow analyses are used to do which of the following?

    A. prevent escrow overages
  14. If an individual submits false information for the purposes of obtaining a federally covered loan, he/she could face:

    A. up to $1,000,000 fine and prison
  15. When is the Servicing Disclosure Statement provided to a borrower?

    A. three business days after application
  16. An initial servicing transfer notice must be provided to a borrower_______days prior to the transfer of servicing on a loan.

    B. 15
  17. A lender has an affiliated business arrangement with a third party service provider. Under what circumstances can the lender require a borrower to use the services in a loan transaction?

    D. if there is no kickback or referral fees and the service provider is an attorney, credit reporting agency or appraiser
  18. What is the primary purpose of the Truth-in-Lending Act?

    A. to ensure that creditors provide consumers clear disclosure of the terms of credit
  19. Which of the following documents shows the cost of a loan expressed as an annual percentage rate?

    A. TIL Disclosure
  20. A lender is permitted to deny an applicant credit based on which of the following factors?

    B. the applicant lacks income stability
  21. The Homeowners Protection Act requires servicers to do which of the following?

    B. automatically discontinue PMI when the borrower reaches 78% LTV as long as payments have been made on time
  22. When must the TIL Disclosure be provided to the borrower?

    B. within 3 days of application
  23. Which of the following documents discloses the annual percentage rate for a loan to a borrower?

    D. TIL Disclosure Statement
  24. A mortgage professional may face which of the following if he or she engages in the illegal acceptance of referral fees?

    D. fines of $10,000 and up to 1 year in prison
  25. If a mortgage broker decides to use telemarketing to establish leads for loan origination, which of the following should occur:

    A. the broker should establish policies and procedures to ensure compliance with the Do-Not-Call provisions of the Telemarketing Sales Act
  26. The disclosure requirements of RESPA would apply to which of the following loans?

    C. a loan to purchase a duplex and rehabilitate it into a single family dwelling
  27. You take an application over the phone. Which of the following must occur within 3 days of a potential borrower submitting an application for a loan?

    C. hand deliver or mail the Good Faith Estimate and TIL Disclosure
  28. When must a lender advise loan applicants about the status of their application?

    B. within 30 days
  29. What must be provided to a borrower if his/her loan application is turned down due to the credit score not meeting lender guidelines?

    C. adverse notice action
  30. What kind of loan transaction requires disclosure of the Settlement Cost Booklet?

    A. a new home purchase
  31. The Gramm-Leach-Bliley Act specifies that a consumer must be given_______to opt out before personal financial information is disclosed to a third party.

    B. a reasonable opportunity
  32. Which of the following scenarios would violate Section 8 of RESPA?

    D. a title company pays a mortgage broker $100 per client for referral of settlement business
  33. A borrower may request a copy of the HUD-1 how many days prior to settlement?

    C. 1
  34. You must re-disclose the APR on a loan prior to closing if:

    C. it varies by more than 1/8 of 1% from its initial disclosure
  35. A borrower has gone to settlement for a cash out refinance on Tuesday. Their rescission period is over at midnight on Friday. When does the loan fund?

    C. Saturday
  36. The Real Estate Settlement Procedures Act includes all of the following provisions except?

    C. it establishes the maximum origination fee that may be charged on a loan
  37. Which of the following is included when calculating finance charges?

    B. mortgage broker fee
  38. Which federal law requires originators to use their best judgment in determining demographic information on a borrower if the borrower does not provide the information voluntarily?

    D. HMDA
  39. According to federal fair lending laws which of the following cannot be considered when qualifying an applicant for a loan?

    B. a female applicant is 4 months pregnant and might not continue working once her baby is born
  40. Under the Truth-in-Lending Act, a mortgage professional is required to disclose_______to a borrower.

    A. terms of the credit transaction
  41. Under the Fair Credit Reporting Act, which of the following entities has the burden of protecting a consumer's privacy when his/her credit information is being reported?

    C. credit reporting agency
  42. Settlement fees and other charges related to a loan transaction must be recorded on the HUD-1 Settlement Statement as:

    C. actual dollar amounts
  43. Which of the following is true of PMI disclosure?

    C. it is different for each type of loan
  44. Flood insurance costs are included in which section of the HUD-1?

    B. reserves deposited with the lender
  45. You have taken a loan application from a customer with an excellent credit score. When should you advise him about the status of his application?

    D. within 30 days
  46. When a borrower uses a mortgage broker to originate his or her loan, who is ultimately responsible for providing the Good Faith Estimate?

    B. the mortgage broker
  47. Under the Gramm-Leach-Bliley Act, which of the following is considered nonpublic information?

    C. a borrower's current loan balances
  48. If a creditor violates ECOA, how many years does a consumer have in which to take civil action?

    B. 2
  49. An attorney and a lender entered into an agreement in which the attorney's car loan payments are paid by the lender in return for the names of potential loan applicants. Who has violated RESPA?

    C. both the attorney and the lender
  50. Which of the following payments is a violation of RESPA?

    D. a mortgage broker accepts a fee for sending its customers to a title company
  51. Under provisions of the Truth-in-Lending Act, what is the maximum tolerance for an understated finance charge?

    B. $100
  52. A lender is gathering information on loans for the purposes of HMDA reporting. Loans made on which of the following property types may be left out of the lender's reports?

    C. travel trailers
  53. What is the purpose of Regulation B?

    C. to prohibit discrimination in credit transactions
  54. What is the purpose of Regulation B?

    D. to prohibit discrimination in credit transactions
  55. If a loan applicant does not disclose his or herrace on a loan application what should a mortgage professional do?

    A. note that the appplicant has declined to answer and select a race based on visual observation
  56. A real estate agent receives a $50 restaurant gift certificate from a mortgage broker as a token of appreciation for referring a home buyer to the mortgage broker. Which of the following laws was violated as a result of this transaction?

    C. RESPA
  57. All of the following disclosures are provided for an adjustable rate loan, per TILA guidelines, except:

    A. statement that the interest rate will be offered for the duration of the loan
  58. Why did Congress enact the Home Mortgage Disclosure Act?

    D. to identify discriminatory lending patterns
  59. Which of the following reasons for denying an applicant a loan is a violation of fair lending laws?

    A. the applicant's recent marital status may lead to a change in employment
  60. A mortgage broker pays for title services on behalf of a developer. In return, the developer agrees to refer prospective buyers to the mortgage broker. Who has violated RESPA?

    C. both the mortgage broker and the developer
  61. When calculating finance charges in compliance with TILA, all of the following are included except:

    A. appraisal fees
  62. RESPA does not apply to:

    A. loans for business, commercial, and agricultural purposes
  63. If a mortgage professional advertises a loan product at "7.25% APR," according to TILA what other information must be included in the same advertisement?

    C. no other information is required
  64. According to TILA, what margin of error is permitted for the annual percentage rate in a regular fixed rate mortgage transaction?

    B. 1/8th of 1%
  65. Which of the following facts about the Settlement Cost Booklet is NOT true?

    D. it can be made part of other larger documents
  66. The Real Estate Settlement Procedures Act applies to:

    A. residential loans
  67. What federal statute primary governs settlement of residential mortgage loans?

    D. RESPA
  68. Which of the following federal agencies creates the regulations for TILA?

    B. Federal Reserve
  69. It is illegal for settlement service provider A to pay settlement service provider B a portion of fees charged to a borrower only when:

    A. service provider B has performed bona fide services in exchange for the fee
  70. Mr. Jones' loan application has been denied and you provide him with an Adverse Action Notice as required by ECOA. Which of the following pieces of information would NOT be included on the notice?

    D. his credit score
  71. According to fair lending laws, which of the following are you permitted to ask loan applicants?

    C. their race
  72. When must loan applicants receive an adverse action notice if they cannot qualify for a loan?

    B. within 30 days of loan application
  73. Under ECOA, when is a notice concerning the right to obtain a copy of the appraisal due to a consumer?

    B. within 30 days of loan application
  74. Jack Smith has been turned down for a loan. He would like to receive a copy of his appraisal. When must the lender receive his request for the appraisal?

    B. within 90 days after Jack has received the notice of adverse action
  75. Which of the following is defined as the cost of credit expressed as a dollar amount?

    C. finance charge
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