Pennsylvania Mortgage Licensing Act Practice Questions

Act 31 of 2009 amended the Mortgage Licensing Act of 2008 for the main purpose of:

A. implementing the Federal Secure and Fair Enforcement for Mortgage Licensing Act
B. amending the Secondary Mortgage Loan Act
C. amending the Mortgage Bankers and Brokers and Consumer Equity Protection Act
D. implementing new regulations concerning advertising

Due to 2009 amendments to definitions, the Mortgage Licensing Act now covers the following:

A. Manufactured home loans only
B. Construction loan only
C. Construction loans and mobile home loans
D. Consumer loans

An applicant for a mortgage loan originator license is required to complete how many hours of pre-licensure education?

A. 20 hours
B. None - only mortgage broker applicants need to complete pre-licensing education
C. 8 hours
D. 6 hours

The Mortgage Act applies to which of the following types of mortgage loans?

A. First-lien mortgages
B. Second-lien mortgages
C. open-end loans
D. all of the above

Mortgage lenders applying for licensure must prove they will maintain a net worth of at least:

A. $100,000
B. $500,000
C. $1,000,000
D. $250,000

A licensed mortgage loan correspondent is authorized under the Mortgage Licensing Act to perform all of the following except:

A. collect fees and remit them to the third party service providers
B. closing mortgage loans in their own names
C. charge a properly disclosed broker's fee
D. offer credit life insurance products to borrowers

A study by the Pennsylvania Department of Banking found that rising foreclosures in the state are linked to which of the following?

A. insider mortgage fraud
B. sham affiliated business arrangements
C. overextended creditors
D. abusive lending practices

Out-of-state licensees are required to maintain at least one physical office in the state of Pennsylvania.

a. True
b. False

If a Consumer Discount Company acts as a loan correspondent or broker, it is considered____________from the provisions of the Mortgage Act.

A. exempt
B. partially exempt
C. non-exempt
D. none of the above

Complaints against out-of-state licensees must be filed with:

A. The licensee's principal out-of-state office
B. The licensee's principal office in the State of Pennsylvania
C. The Department of Banking
D. An agent for service of process in Pennsylvania

An individual renewing an application for licensure as a mortgage originator must provide proof of how many hours of continuing education?

A. 8 hours
B. 10 hours
C. 12 hours
D. 20 hours

Pennsylvania's Mortgage Act includes all but which of the following in its definition of open-ended loans?

A. the borrower can repay the entire balance due at any time or can make payments in installments
B. interest is computed on the unpaid principal balance
C. the loan credit is closed when the balance is paid in its entirety
D. the borrower is permitted to obtain advances from time to time

Adequate supervision of mortgage originators by mortgage lenders, loan correspondents, and brokers includes all but 1 of the following responsibilities:

A. maintaining a list of current and former mortgage originators/employees
B. assuming liability for the acts and omissions of employees
C. providing the department with notice within 30 days of the discovery of illegal activity by a mortgage originator/employee
D. providing notice, within 30 days, to other mortgage loan businesses in the state of any illegal action by a mortgage originator/employee

The Mortgage Licensing Act requires licensees to obtain prior approval from the Department for all but 1 of the following actions:

A. canceling of a surety bond
B. changing the location of a business
C. maintaining business records outside the state of Pennsylvania
D. conducting types of business other than mortgage loan business

Licensed mortgage brokers are required to indicate which of the following in an advertisement?

A. the names of any lenders with whom they are affiliated
B. their business address
C. that they are licensed by the Pennsylvania Department of Banking
D. their NMLS unique identifier

The fee that a mortgage loan correspondent must pay to renew a license is:

A. $1,500
B. $250
C. $750
D. $1,000

The Department of Banking does not have the power to:

A. issue regulations under the Home Ownership and Equity Protection Act
B. issue subpoenas for the attendance of witnesses at administrative hearings
C. issue regulations under the Mortgage Act of 2008
D. charge licensees for the costs of investigating records relating to their mortgage loan business

Which of the following authorizations do both loan correspondents and mortgage brokers share under the Mortgage Licensing Act?

A. the right to require the purchase of property insurance
B. the ability to fund a loan in the entity's name
C. the right to collect and charge fees
D. the ability to stipulate that a borrower use a particular settlement service provider

The Department must issue a decision on a license application within:

A. 45 days
B. 30 days, unless it extends its review for an additional 30-day period
C. 90 days
D. 60 days, unless it extends its review for an additional 30-day period

An applicant for a mortgage originator license mmust achieve a score of______or better on the written pre-licensing test to pass.

A. 80%
B. 75%
C. 85%
D. 70%

The factors that the Department may consider in making a determination regarding an applicant's financial responsibility include all except:

A. foreclosures within the past 3 years
B. current outstanding judgments as a result of medical expenses
C. a pattern of serious delinquent accounts within the past 3 years
D. current outstanding tax liens or other government liens and filings

What is the minimum surety bond requirement for a mortgage originator?

A. none-originators do not need bond coverage as their employer is covered
B. $75,000
C. $50,000
D. $25,000

Under the Mortgage Licensing Act, mortgage originators are only permitted to work for one employer engaged in the mortgage business.

a. True
b. False

The Department can deny a mortgage originator licensure for all but which of the following reasons?

A. material misstatements on the licensing application
B. licensure revocation by another regulatory agency
C. lack of experience in the financial industry
D. conviction of a felony six years prior to the date of application

Which of the following are authorized to issue lock-in agreements in their own name?

A. mortgage brokers
B. mortgage orginators
C. mortgage lenders
D. all of the above

The Mortgage Licensing Act requires a licensee to respond to a borrower's request for a loan statement within?

A. 10 days
B. 3 business days
C. 2 weeks
D. 1 month

Lenders who make secondary mortgage loans are permitted to charge an origination fee of up to:

A. 3%
B. 2%
C. 5%
D. 1%

According to the Mortgage Licensing Act records may be kept:

A. only at the licensee's principal office
B. combined in storage with other business records
C. at any location as long as the records are easily accessible
D. only at a bonded storage facility

The Mortgage Licensing Act requires at least one individual who is not a mortgage originator to complete 8 hours of continuing education annually.

a. True
b. False

Lock-in agreements must include all but which of the following:

A. the expiration date of the lock in
B. the lock-in fee
C. the interest rate locked in
D. the mortgage broker's business information

Pennsylvania Predatory Lending

Pennsylvania's Consumer Equity Protection Act is significantly similar to which of the following federal laws?

A. HOEPA
B. Gramm-Leach-Bliley Act
C. ECOA
D. FACTA

Pennsylvania Predatory Lending

Pennsylvania's Consumer Equity Protection Act specifies the definition of a covered mortgage loan. This definition includes all but which of the following?

A. original principal balance of less than $100,000
B. property located in Pennsylvania
C. meets interest rate or points and fees thresholds
D. mortgage loan is originated by a broker

Pennsylvania Predatory Lending

The Consumer Equity Protection Act and federal regulations would include which of the following in the definition of "points and fees"?

A. settlement fees, when the lender requires use of a specific settlement agent
B. interest on the loan
C. appraisal charges where the borrower has chosen their own service provider
D. a reasonable title examination fee charged by an unaffiliated service provider

Pennsylvania Predatory Lending

The Consumer Equity Protection Act requires the Cautionary Notice to Borrower disclosure to be provided to the borrower at what point during the loan transaction?

A. 3 days prior to settlement
B. at the time the borrower requests information on a covered loan
C. no later than 3 days following application
D. at settlement

Pennsylvania Predatory Lending

What purpose does the Insurance Notice to Borrowers disclosure serve?

A. it is used to advise borrowers that they have elected to purchase optional insurance products in conjunction with their loan
B. it specifies that private mortgage insurance is required on covered loans
C. it advises the borrower they must obtain homeowners insurance on covered loans
D. it specifies the minimum amount of fire and casualty insurance required on homes in Pennsylvania

Pennsylvania Predatory Lending

Pennsylvania's "no loan flipping" regulation prohibits lenders from charging points in connection with refinancing a loan that is less than_______from the date of origination.

A. 12 months
B. 36 months
C. 5 years
D. 24 months

Pennsylvania Predatory Lending

Pennsylvania law prohibits loan payments made directly to a home improvement contractor. All but which of the following are permissible alternatives?

A. payment is made to the borrower
B. payment is placed in an account established by the lender in the contractor's name until the home improvements are completed
C. payment is made to a third party escrow agent
D. payment is made jointly to the borrower and the contractor

Pennsylvania Predatory Lending

Pennsylvania's prohibition against equity based lending requires a lender to ensure that a borrower has the ability to repay the loan. Payments cannot exceed what percentage of the borrower's gross monthly income?

A. 25%
B. 38%
C. 30%
D. 50%

Pennsylvania Predatory Lending

The Consumer Equity Protection Act prohibits balloon payment terms in a loan transaction unless the balloon payment isn't due for at least_______after the consummation of the loan.

A. 10 years
B. 12 years
C. 2 years
D. 5 years

Pennsylvania Predatory Lending

The Pennsylvania Department of Banking is authorized to impose penalities of up to_______per violation for violations of the Consumer Equity Protection Act.

A. $10,000
B. $5,000
C. $2,000
D. $1,000