NMLS Study Guide 7

  1. Which is NOT a purpose for the Mortgage Servicing Disclosure Statement?
    • to inform the consumer the likelihood that the mortgage could be sold
    • All mortgages are sold and the consumer is not affected by the selling of the mortgage. The consumer is only affected if the "servicing" of the mortgage is sold (who the customer makes the payments to).
  2. A borrower signs the note and mortgage for a refinance on his principal residence on Thursday, Dec. 31. What is the earliest day the funds for this loan could be disbursed (assuming no bona fide financial hardship)?
    • Wednesday Jan. 6
    • Federal holidays and Sundays do not count toward the three business-day rescission period for loans on principal residences. So, the borrower has until midnight on these three business days after the loan papers were signed; Saturday, Monday, and Tuesday. The earliest the funds could be disbursed would be Wednesday the 6th.
  3. Under the Home Ownership and Equity Protection Act, a creditor may not refinance a Section 32 loan into another Section 32 loan within the first ______________ of origination, unless the new loan is in the borrower's best interest.
    12 months
  4. Which law requires lenders to disclose consumer credit costs related to adjustable rate mortgages?
  5. In a construction loan, which two measures are used to determine the final loan size?
    Loan-to-cost and loan-to-value
  6. What is a provision in a mortgage enabling the lender to demand full repayment if the borrower sells the mortgaged property or partial interest in a mortgaged property?
    • due on sale clause 
    • The lender has a right to demand full payment on a property in the event of the sale of that property. The clause that permits this is known as due on sale clause. Also referred to as alienation clause.
  7. A mortgage loan originator must make the settlement charges detailed in a Loan Estimate available for how many business days?
  8. Which act did Congress pass in 1977 to reduce discriminatory credit practices against low-income neighborhoods in an attempt to eliminate an unfair practice known as redlining?
    Community Reinvestment Act
  9. To comply with Regulation Z, lenders must disclose
    annual percentage rate.
  10. The licensee must inform the state regulatory within _____ of the change of address.
    30 days
  11. In order to comply with HMDA, which is NOT a question a mortgage loan originator may ask a borrower?
    • What is your religion?
    • Religion is not a question that a loan originator may ask relevant to HMDA, since it is in no way included in government monitoring under the guidelines of the Home Mortgage Disclosure Act.
  12. This 2009 law was put in place to establish increased enforcement of anti-mortgage fraud laws.
    The Fraud Enforcement and Recovery Act
  13. prior to recent regulatory changes, "yield spread premium" was traditionally defined as:
    an amount paid by a lender to a loan originator for closing a loan at a rate higher than the rate for which the borrower qualifies.
  14. Are companies required to gain permission for use of and sharing of consumers nonpublic personal information? Why?
    No they aren't. Companies provide a window of time for the consumer to reasonably opt out. 30 days GLB Act
  15. who is ultimately responsible for ensuring that the loan estimate is provided?
    the creditor
  16. what is the creditor permitted to charge more than it discloses in the loan estimate and still meet the good faith requirement?
    prepaid interest
  17. When must the Loan Estimate be given by the creditor?
    The Loan Estimate must be provided to the consumer by the creditor no later than the third business day after the creditor receives the consumer’s application. Additionally, the Loan Estimate must be delivered or placed in the mail no later than the seventh business day before consummation.
  18. what type of transactions are covered by TRID?
    The TRID rule and disclosure forms apply to most closed-end consumer mortgage loans.
  19. What is the MAPS Rule and who runs it?
    • The Federal Trade Commission (“FTC”) Mortgage Acts and Practices - has to do with Advertising
    • all advertising must be kept for 2 years
  20. cost of credit expressed as a dollar amount
    finance charge
  21. do qualified mortgages allow 40 year terms?
  22. do qualified mortgages allow adjustable interest rates?
  23. RESPA does NOT
    establish a max origination fee that may be charged on a loan
  24. under the Fair Credit Reporting Act, which of the following entities has the burden of protecting a consumer's privacy when their credit information is being reported?
    The Credit reporting agency
  25. the amount of down payment, the amount of the finance charge, or the number of payments needed are all examples of ____ under TILA
    Trigger Terms
  26. what's not included in calculating the APR
    escrow fees
  27. the penalties for paying or accepting an illegal referral fee are:
    fines of up to 10k and up to 1 year in prison
  28. if a veteran's loan goes into foreclosure, the government will
    reimburse the lender up to the guaranteed amount of the loan
  29. in order for a small creditor balloon payment mortgage to be a qualified mortgage, the small creditor must hold the loan in its portfolio for:
    Three (3) years
  30. what is a HECM and who runs it?
    • The Home Equity Conversion Mortgage (HECM) is Federal Housing Administration's (FHA) reverse mortgage program which enables you to withdraw some of the equity in your home.
    • Must be 62 to qualify.
  31. balloon payment qualified mortgages may be made by
    small creditors in rural/underserved areas
  32. a conventional loan that exceeds Fannie Mae and Freddie Mac's max loan limits
    a non-conforming loan
  33. A loan-level price adjustment (llpa) is
    GSE charges that result in higher interest rates when consumer eligibility or loan features present a higher risk of default
  34. the process of allowing a broker to originate and close a loan in their own name before transferring the loan to the lender providing the funds is called:
    table funding
  35. DTI for FHA is ____ 
    For VA loan is ____
    • 43%
    • 41%
  36. va loans require a funding fee under all of the following conditions, except:
    if the veteran is disabled
  37. mortgage insurance premium
    is paid upfront on all fha loans
  38. URLA
    • Uniform Residential Loan Application
    • 1003
  39. what document would an underwriter rely on for detailed information concerning the collateral for a mortgage loan?
    the property's appraisal
  40. according to conforming guidelines, an appraiser may make net adjustments to comparables up to ___ in a residential appraisal.
  41. Effective April 2013, the Uniform State Test Component or UST added____ questions on high level state-related content.
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NMLS Study Guide 7