Maryland Mortgage Practice

  1. Under revisions to Maryland's law allowing for transition to the NMLS, licenses are valid for:

    A. 1 year
  2. Lender and loan originator licenses in Maryland that are not renewed according to provisions of the licensing law expire on:

    A. December 31st
  3. All of the following mortgage professionals are included in the Title 5 licensing requirements of the Maryland Residential Mortgage License Law, except:

    C. loan originators
  4. Under Maryland's Residential Mortgage License Law, the term "mortgage broker" is used to draw a distinction between lenders to fund loans and brokers who:

    B. provide table-funding for loans
  5. Persons making_______or fewer loans per year do not meet the definition of a mortgage lender and are exempt from the licensing requirements of Maryland's licensing law.

    A. 3
  6. An individual who is selling his/her own home and provides funds to the buyer by securing the debt with a second mortgage is providing a:

    A. take-back mortgage
  7. Under Maryland law, employees of depository institutions are exempt from the provisions of the licensing law, however they must:

    A. register with the NMLS and obtain a unique identifier
  8. According to NMLS requirements, an applicant for licensure as a mortgage broker/lender must disclose under oath whether they have been charged or convicted of a misdemeanor related to financial services crimes or fraud within the past______.

    D. 10 years
  9. Under Maryland law, a mortgage lender licensee who does not lend money, or who lends less than $1,000,000, is required to maintain a net worth of:

    C. $25,000
  10. Mortgage lenders who annually do business of less than $3,000,000 are required to maintain a surety bond in the amount of:

    D. $50,000
  11. Mortgage lenders who file five or more applications for licensure of multiple branch offices may obtain a blanket surety bond of________, with Department of Financial Regulation approval.

    C. $750,000
  12. In conjunction with SAFE Act requirements, the Maryland Residential Mortgage License Law specifies that individuals must complete______hours of education prior to becoming licensed.

    B. 20
  13. Once Maryland's transition to the NMLS is complete, the deadline for applying for a license renewal is:

    A. November 1st
  14. In order to become licensed as a loan originator in Maryland, an individual must submit a total application fee of:

    B. $335
  15. Maryland's Residential Mortgage License Law specifies that the Commissioner cannot use any of the following as the sole reason for finding an individual application unable to meet financial responsibility standards for licensure, except:

    A. judgments for child support
  16. If a loan originator is no longer employed by a licensed lender/broker, he/she must notify the
    Department of Financial Regulation:

    B. Within 10 days
  17. An individual is not eligible for licensure as a loan originator if he/she has been convicted of a felony
    within the _____ preceding application for licensure.

    D. Seven years
  18. All of the following are requirements under Title 6 of Maryland's Residential Mortgage License Law
    for the licensing of an affiliated insurance producer/mortgage loan originator, except:

    C. Information from the insurer on the volume of insurance the applicant produces in a 12-month period
  19. Under Maryland law, licensees serving as mortgage brokers must retain records pertaining to loan
    transactions for a period of:

    C. 25 months after the loan is made or denied
  20. Pursuant to Maryland law, licensees who serve as loan servicers must provide the Department of
    Financial Regulation with a report about loans serviced in the previous month:

    B. On the 25th of the month
  21. Conducting execution of a deed of trust on a second mortgage in which of the following locations
    would violate the provisions of the Maryland Residential Mortgage License Law?

    B. The borrower's home address
  22. In the state of Maryland, it is a violation of the Residential Mortgage License Law for a loan originator to work for more than one licensed lender or exempt lender.

    A. True
    B. False
    A. True
  23. For violations of the Maryland Residential Mortgage License Law, the Commissioner has the
    authority to impose civil penalties of for each violation.

    C. $5,000
  24. If the Department of Financial Regulation conducts an investigation of a licensee, the Commissioner
    has the right to do which of the following:

    A. Charge the licensee a fee of $250/day per employee who handles the investigation
  25. If a Maryland Department of Financial Regulation investigation of a licensee leads to an enforcement
    action, it is at the Commissioner's discretion to report it to the NMLS.

    A. True
    B. False
    B. False
  26. Maryland Department of Financial Regulation's requirements of loan originators specify that when
    communicating and handling transactions with borrowers, they owe the borrowers:

    D. A duty of good faith and fair dealing
  27. Maryland regulations state that a loan originator or lender may only recommend a refinance
    transaction to a borrower if:

    A. It results in a tangible net benefit for the borrower
  28. Which of the following is one of the reasons for Maryland's Finder's Fee Law?

    A. To establish the maximum fee a mortgage broker may pay a real estate agent for a referral
    B. To discourage mortgage brokers from repeatedly refinancing mortgages with no benefit to the
    C. To prohibit mortgage brokers from receiving yield spread premiums
    D. To discourage mortgage brokers from originating high cost loans
    • B. To discourage mortgage brokers from repeatedly refinancing mortgages with no benefit to the
    • borrower
  29. In what way can yield spread premiums be beneficial to borrowers?

    D. Brokers can use yield spread premiums to subsidize closing costs
  30. Which of the following is a controversial form of direct compensation for a mortgage broker?

    C. A markup on a third party service such as a credit report fee
  31. Maryland mortgage brokers are required to provide a borrower with a signed copy of the agreement
    required by the Finder's Fee Law______.

    B. Within ten business days of application
  32. Which of the following statements, if included in borrower agreement under the Finder's Fee Law,
    would most likely be found acceptable to the Maryland Department of Financial Regulation?

    A. We will charge an origination fee ranging from $2,000 to $2,500
    B. We are acting in the capacity of a broker, not a lender, and will charge $1,800 due at settlement
    for loan origination services
    C. We are acting in the capacity of a broker, not a lender, and will charge a fee not to exceed $1,500
    at settlement for our services
    D. We charge broker fees up to $2,800 for origination services
    • B. We are acting in the capacity of a broker, not a lender, and will charge $1,800 due at settlement
    • for loan origination services
  33. Broker compensation, according to Maryland's Finder's Fee Law, may not exceed____ of the
    amount of the loan.

    A. 8%
  34. Under which of the following circumstances is a broker prohibited from accepting a fee for services?

    A. When the broker also serves as the real estate agent for the transaction
  35. The Maryland Finder's Fee Law limits the fees a broker can obtain is a loan is refinanced more than
    once in a______ period.

    B. 24-month
  36. A borrower obtains a loan on a property for $158,000. 18 months later the mortgage broker refinances
    the mortgage for a loan amount of $180,000. Assuming the broker charges a 3% origination fee, what
    is the most the broker may earn on the refinance transaction?

    A. $660
  37. Under which of the following circumstances would a borrower be ineligible for a refund of broker
    compensation, pursuant to the Maryland Finder's Fee Law?

    A. The broker secures a portion of his/her compensation through yield spread premium
  38. In the landmark case, Sweeney v. First Savings Mortgage, the broker unsuccessfully argued that________pre-empted Maryland law.

  39. Several sections of the Maryland Code address repayment ability. In order to consider a borrower's______, income and assets should be carefully verified.

    D. Debt-to-income ratio
  40. The Maryland Code prohibits all of the following lending terms for loans secured by a subordinate
    lien, except:

    B. A security interest on a residential property of less than $10,000
  41. Title 12 of Maryland's Commercial Law includes all but which of the following recommendations or
    requirements related to predatory lending?

    B. Provisions discouraging balloon payments and prepayment penalties
  42. Under both federal law and Maryland law, a first lien loan meets the definition of a "higher-priced
    mortgage loan" if it exceeds the average prime offer by:

    C. 1.5 percentage points
Card Set
Maryland Mortgage Practice
Maryland Mortgage Practice