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MLO 25 Questions
| Question | Answer |
|---|---|
| Largest Secondary Market Participant? | Fannie Mae / Federal National Mortgage Association |
| Martha Self-employed, how many years taxes does she need? | 2 years |
| Safe Act, all of the following contigencies topics under the safe Act with the exception of: | Mortgage Refinancing. |
| To be considered to have passed the MLO exam, must pass with a minimum passing grade of: | 75% |
| Lender who refused to make a loan to a neighborhood is called? | Redlining |
| Name of the clause that permits a lender to accelerate or call the loan? | Acceleration Clause |
| To eliminate MI Mortgage Insurance, what percentage of the original loan amount? | 78% |
| $100,000 sales price, LTV 90% on a 30 year fixed rate, Fannie, Freddie Mac. Requires 25% of 6.2%. What is the loan amount? | $90,000 |
| As a result of the Mortgage Disclosure Act, how soon can a property sale close? | 7 business days after delivery of the required Disclosures |
| Which would be considered a toxic feature under qualified mortgage rule definition: A. Adjustable B. Defiance Clause Ç. Short Term Loan D. Interest only. Not lowering loan (principal) amount. | D. Interest only. Not lowering loan (principal) amount. |
| All of the following are considered an exceptable borrower FEE except: A. B. Mortgage Insurance C. Reinspection Appraisal Fee D. Change of the origination charge. | D. Change of the origination charge. |
| APR loan estimate is 6.25% at closing 6.5%. How many business days must the buyer wait after redisclosure? | Buyer must wait three business days. |
| What document specifies the veterans entitlement: | Certificate of eligibility COE |
| Which of the following best describes when negative amortization will occur? | When the payment made does not cover the interest during the period. Negative amortization |
| Mary went to obtain an FHA loan her monthly payment is $800.65, her car payment $192.65 and her credit card payment $40. How much does she have to make? FHA 31-43 | Answer is the greater of the two amounts $2,582.74 Divide $800 by 31 is equal to $2,582.74 Divide the total most expenses $1,033.30 / 43 is equal to $2,403 Greater amount is $2,582.74 |
| Pam is buying a home via FHA the appraised value is $140,000, purchase price is $135,000 with a FICO score of 650 period what is her minimum down payment amount? | Answer is $4,725. You multiply the purchase price times 3.5% to get the answer. 135,000 * 3.5% is equal to $4,725 |
| Gary wants a section 502 USDA guaranteed loan medium income is $45, 000 what is the max amount Gary could make? A. $50,000 B. $52,000 C. $54,000 D. $56,000 | 45,000 * 115%, is equal to 51,750. Correct answer is a $50,000. USDA chart increments every $2,000. |
| Borrower Tim requires $150,000 loan with 15% down and the lender agrees to a 5% in cost. How much does Tim need? | He would need $5,400 150,000 - 15,000 = 135,000 135,000 * 4% = 5,400 |
| The Gram Leach bliley Act glb act of 1999. An individual product or service is considered a consumer or a customer? | A consumer since it's an individual product or service. |
| What is a consumer? | an individual who obtains or has obtained a financial product or service from an institution for personal family or household reasons usually with the one-time transaction. |
| What is a customer? | A a customer is a consumer with a continuing relationship with a financial institution. |
| Under the gram-leach bliley act | The customer must receive an annual disclosure. As long he is a customer. |
| High cost loans that exceed the prime rate. Which does not define a high price loan? | A 4.5% line of credit is not a high loan. |
| Marching his selling his home after 5 months, after what price increase is he required a new appraisal? | At 5 months the percentage would be 20%. After 30 days 10%. |
| To ensure the closing the mlo conceals the down payment are borrowed funds period what has he committed? | Actual fraud |
| What are illegal property flipping Acts? | Generally requires collusion between the seller buyer appraiser and lender an illegal property flipping scheme occurs when a property is purchased at a low price the price and an inflated value without any valid reasons for the increase |
| ECOA means | Equal Credit Opportunity act |
| ECOA regulation? | Z |
| ECOA regulator? | CFPB |
| CFPB stand for? | Consumer Financial Protection Bureau |
| CFPB is the regulator for? | 1. ECOA 2. HDMA 3. FCRA 4. RESPA 5. SAFE ACT 6. TILA |
| HMDA | Home Mortgage Disclosure Act |
| FCRA | Fair Credit Reporting Act |
| RESPA | Real Estate Settlement and Procedure Act |
| SAFE ACT | Secure and Fair Enforcement for Mortgage Licensing Act |
| TILA | Truth in Lending act |
| HMDA regulation? | C |
| FCRA regulation? | V |
| RESPA regulation? | X |
| Safe Act regulation | G |
| TILA | Z |
| ECOA regulation? | B |
| Who is the regulator for: ECOA, HDMA, FCRA, RESPA, Safe Act, TILA? | CFPB Consumer Financial Protection Bureau |
| ECOA regulation B | Requires MLO to fill out section X of the FNMA form 1003. MLO are required to categorize and question borrows relative gender, race and ethnicity. if the borrower refuses to answer these questions and MLO must note the fact. |
| It is unlawful for any creditor to discriminate against any applicant for the following reasons: | On the basis of race, color, religion, national origin, sex, marital status, or age. age may only be used to deny credit if the applicant is not yet 18, or not yet 62 if applying for a HECM home equity conversion mortgage |
| Hecm | Home equity conversion mortgage known as a reverse mortgage |
| Adverse action procedure | within 30 days after receipt of a completed application for credit, a creditor shall notify the applicant of its actions on the application. |
| Record keeping regulation b mandates at the lenders keep the following records for 25 months: | Applications, adverse action notices, all documented used to evaluate the creditworthiness of the borrower, any communications alleging ECOA violations. |
| CRA | Community reinvestment act |
| CRA was enacted for what reason? | Congress enacted the community reinvestment act to encourage financial institutions to help meet the credit needs of the communities in which they operate, including low and middle income neighborhoods, consistent with safe and sound lending processes. |
| HDMA home mortgage disclosure act regulation c | |
| HDMA home mortgage disclosure act regulation C | Data To determine whether financial institutions are serving the housing needs of their communities. |
| Who reports HDMA data? | Loan application register LAR |
| FFIEC | Federal financial institutions examination council |
| What does the FFIEC federal financial institution examination council do? | Empowered to prescribe uniform principle standards and report forms for the federal examination of financial institutions by the board of the governors of the Federal reserve |
| Civil Rights act of 1866 | all citizens of the United States should have the same rights, and every state and territory, as as is enjoyed by the White citizens thereof to inherit, purchase, lease, selled, hold, and convey real and personal property. Race the only protected class. |
| Race is the only protected class in the? | Civil Rights act of 1866 |
| Fair housing act of 1968 who is the regulator? | HUD |
| Federal fair housing act of 1968 prohibits? | Discrimination in residential credit only.protected classes under this act include race, color, religion, sex, national origin, disability, familiar status. |
| Federal housing act of 1968 does not protect these classes under this act? | Age and marital status. |
| What is redlining? | form of illegal disparate treatment were by a lender provides an unequal access to credit, or equal termscredit, because of the race, color, national origin, or other prohibitive characteristics of the residents or future of the area. |
| Redlining is aggressively the address under? | FFHA Federal fair housing act |
| Blockbusting is | trying to induce owners to sell their homes by suggesting that the ethic or racial composition of the neighborhood is changing, with the implication that property values will decline. Also called panic selling. |
| Panic selling is the same as | Redlining |
| What is steering? | channeling perspective realistic buyers or tenants to particular neighborhoods based on their race, religion, or ethnic background. this may never be done in order to maintain or exchange the character of those neighborhoods. |
| any person who has been discriminated against under the sack May file a written complaint to head within one year of the violation. | Steering |
| Steering exemptions: | rental of a room or unit in a drawing with no more than four independent units the owner occupies one unit as a residence. Known as Mrs Murphy's exception. a single family home sold or rented by a private owner without the use of a broker. Private Clubs |
| Disparate impact means? | when a creditor employee seemingly neutral policies or guidelines that have an adverse effect or impact on a member of a protected class. |
| Age is protected under ECOA but not the federal fair housing act. True or false? | True |
| The lender may ask the applicant if he or she is single or divorced true or false? | False |
| Once the lender has received a completed application it must surrender a credit decision within how many days? | 30 days |
| The borrower is entitled to a copy of the appraisal report no later than? | Three business days prior to the settlement |
| if the loan is denied the lenders notice of adverse action AKA denial letter must be delivered to the applicant within 30 days true or false | True |
| ECOA requires one notice of adverse action be sent to the applicants unless | The decision is based upon the information found in the kobaras credit report |
| The home mortgage disclosure act concerns itself with: | A.Institutional lenders of federally related loans with assets over 10 million dollars. B. Statistical data that helps detect discriminatory patterns. The LAR report. C. Depository institutions. |
| The Fair housing act of 1968 requires advertisements for mortgage loans contain? | A. The Equal opportunity logo in each ad. B. The slogan "Equal housing lender" in each broadcast. |
| if any face-to-face application the borrower refuses to provide the loan originator with the information for government monitoring contained in section x of the 1003 form the loan originator must? | Note the fact on form 1003 and guess on the basis of visual observation. |
| The letter of adverse action must contain: | A. The name of the lender. B. The lenders address. C. A specific reason was denied. |
| ECOA is enforced by the CFPB true or false? | True |
| A lender make condition a loan upon a Burrows ability to prove alimony or child support income has been received monthly period if receipt of this income is disclosed by the borrower true or false ? | True |
| A lender May refuse to consider reliable public assistance income true or false? | Faults you may use this income. |
| A lender may consider a borrower's marital status when considering income true or false? | False |
| The mortgage disclosure act is what regulation? | Regulation z |
| The only protected class address as part of the civil Rights act of 1866 is? | Race |
| Which specifically prohibits redlining? | The Fair housing act |
| Which act requires lar loan application registry report? | HMDA |
| The federal fair housing act prohibits discrimination based on race, color, religion, sex and: | National origin, disability handicap, or familial status. |
| Which ACT compels lender to fulfill the lending needs of the community? | Community reinvestment act |
| All of the following must be delivered to the borrower promptly after receipt by the lender, but no later than three business days prior to settlement except: | A list of comparable sales from the properties appraiser's office. |
| Real estate settlement procedures act respa under which regulation? | Regulation x = respa |
| What is the purpose of respa: | To help consumers become better shoppers for settlement services. to eliminate kickbacks and referral fees that, unnecessarily increased the cost of certain settlement services. Give consumers certain rights involving servicing of the loan. |
| Respa section 6: | Protects homeowners against abuses in loan servicing |
| Respa section 8 | Prohibits kickbacks fees splitting and provides safe harbor for affiliated business arrangements. |
| Respa section 9 | State a seller cannot require the use of a particular title company |
| Respite section 10 | Identifies the amount that can be charged to maintain escrow accounts. |
| Skate stands for | S servicing K kickbacks A affiliated business arrangements T title company E escrow |
| Respa in general | carros monster live I live alone transactions secure with mortgage please don't want you for family residential property. These include most purchase loans, refinances, property improvement loans, and equity lines of credit. |
| Respa exemption transactions include: | Transfer of property involving assumption of an existing loan or sale subject to an existing loan. A seller held purchase money mortgage. All cash sales. Investment properties |
| Respa definition of a complete application 6 items: | 1. Address of subject property. 2. Loan amount sought 3. Gross monthly income of borrowers 4. Estimate of property value. 5. Name or names of borrower. 6. Social security number for each borrower |
| What does the acronym ALIENS stand for: | Address loan income estimate name(s) social security number |
| What four disclosures must be given to the borrower at the time of the application within three business days? | |
| 1. Booklet entitled "your home loan toolkit" 2. Loan estimate 3. Mortgage servicing disclosure statement 4. Affiliated business arrangement | |
| if the initial loan estimate was inaccurate the consumer must be given the revised loan estimate no later than how many business days prior to the settlement? | 4 business days |
| If the borrowers withdraw the application or the lender turns down the application within three business days disclosures are not required. True or false | True |
| Respa section 8 | Kickbacks, fees splitting, underearned fees prohibits anyone from giving or accepting. |
| Safe harbor rules exempt? | The affiliated business arrangements from section 8, provided proper disclosures are given to the borrower. |
| Violations of sections 8 in respa. | Referrals fees and unearned fees are subject to criminal and civil penalties in section 8 find up to $10,000 and in prison for up to one year. In a civil suit a person violent section 8 may be liable to the person iq test free times the amount paid |
| Section 9 respa | prohibits the seller from requiring the home buyer to use a particular insurance company either directly or indirectly or as a condition of sale period buyers May Sue who wireless provision for equal amount to three times the trouble damages. |
| Section 10 respa | Limits on escrow accounts.lender may require a cushion not to exceed the equal amounts of 1/6 or 2 months of the total disbursements of the year. Lender must perform an account analysis and return any excess of $50 |
| RESPA records must be kept on file for a period of how many years | 5 years |
| TRID stand for? | T for truth in lending act R real estate settlement and procedures app I integrated disclosures include the LE loan estimate D CD closing disclosure |
| HELOC, HECM a stand for | Home equity line of credit Home equity conversion mortgages known as reverse mortgage these do not require trip disclosures. |
| Which loans do not require TRID disclosures | Home equity line of credit HELOC, HECM home equity conversion mortgages AKA reverse mortgage |
| The disclosure requirements of RESPA would apply to the following? A. farm loan b. a loan to purchase a triplex as a primary residence c. An investment property d. A loan to purchase a grocery store. | B. A loan to purchase a triplex as a primary residence |
| the servicing transfer notice must be provided to the borrower no later than how many days prior to the effective transfer date? | 15 days |
| The civil and criminal penalties as per RESPA section 8 for accepting an illegal referral fee are up to? | $10,000 fine and one year in prison |
| When are referral fees not considered as kickbacks under respa? | |
| When are referral fees not considered as kickbacks under RESPA? | Payments as part of a cooperative real estate agent or brokers. the payment of a fee to an attorney of law for services actually performed. a title company paying a fee to its appointed agents for servicing performed in issuing a title insurance policy. |
| The yield spread "YSP" premium must be disclosed on what documents? | The LE and CD. Loan estimate and closing disclosure. |
| if a lender has an affiliated business arrangement with a third party service provider, when May the lender require a borrower to use these services as a condition of the loan? | Lenders may require the use of an attorney, credit reporting agency or appraiser if disclosed at the point of the application. |
| Dan Adams is concerned about the amount of money needed for closing period he asked to review the closing disclosure prior to the settlement date period as per RESPA dance request must be satisfied within,,? | Three business days prior to closing. |
| CFPB rules regarding the loan estimate require: | The "YSP" to be disclosed as a credit to the borrower B. The final balloon payment be disclosed C. A prepayment penalty be disclosed D. All other the above. |
| CFPB rules regarding important dates on the LE require that the cost for all settlement charges not be charged_____? | Later than four business days prior to the settlement |
| What an ethical practice is the Le blenders estimate designed to stop? A flipping B. Redlining C. Churning D. Bait and switch | D bait and switched |
| Yield spread premium yst is defined as: | An amount paid by the lender to third party originator for charging the borrow and interest at a rate higher than par. |
| What section of RESPA addresses loan servicing abuses? | Section 6, loan servicing abuses. |
| Under respite guidelines affiliated business arrangements exist where there is a blank or more common ownership between the industry related service providers. A 25% b 10% c 1% d 50% | C. 1% |
| Unaffiliated business arrangement disclosure form must be given to the consumer: | |
| Within three business days from the date of the application. | |
| The affiliated business arrangement disclosure form must be a separate document true or false? | True |
| Regulation X is affiliated with? | RESPA |
| Respa required disclosures include | A. The home loan kit b. Affiliated business arrangement disclosure c. Mortgage servicing transfer disclosure d. All of the above Correct answer d all of the above |
| what is the maximum that the disclose origination fee on the loan estimate may increase if the interest rate is luck? | |
| what is the maximum that the disclose origination fee on the loan estimate may increase if the interest rate is locked? | It may not increase. |
| On the loan estimate origination fees reflect s: | Application fees, underwriting fees, points. |
| Which is a violation of respa's section 8? | A mortgage company accepts a fee for referring businesses to a title company |
| The purpose of a loan estimate is to: A. Prohibit bait and switch tactics. B. Encourage consumer shopping. C. to disclose closing costs. D. All of the above | D all of the above. |
| Respose section 10 allows escrow account balance is a cushion of blank months. | |
| 2 months cushion for account balances | |
| The lender will review The borrowers escrow account annually and send the borrower a statement that shows prior years activity and any future adjustments that may be needed. This evaluation is called? | The annual escrow analysis |
| The lender must provide the home loan toolkit to the borrower within blank business days from receiving a completed application. | Must be provided within three business days from receiving the completed application. |
| If a mortgage loan is transferred only the transferee is required to notify the borrower, true or false? | False. |
| What is the maximum percentage that third party charges selected by the originator may increase from initial disclosure to close | 10% |
| Respa does not apply to: a period commercial loans b. Agricultural properties .c. Business purpose loans d. All of the above | All of the above. |
| The components of an application include all except: a period property value b social security number c property address d credit report | Credit report |
| Section 9 of respa prohibits _______ from requiring home buyers to purchase title insurance from a particular company. | Home sellers. |
| Regulation x is related to: | Respa |
| The safe harbor provision of respa involves: | Affiliated business arrangements |
| A loan originator referred a home buyer to a title company to expedite the closing period the owner of the title company paid the originator $200 for the referral period which of the following statement is most correct. | Both the title company and loan originator violated section 8 of RESPA rule. |
| The loan estimate must include the APR true or false | True |
| Cfpb enforces respa true or false | True |
| Any seller of real property can require the use of a certain title company as a condition of sale true or false | False. |
| USB space before the accuracy and delivery of the self disclosure question Mark | The title agent taking a break and falling aslee |
| The truth and lending act tilla is a ministered by an implemented with regulation? | Is the main street by the consumer financial protection bureau Chief and implemented with relations |
| What are the disclosure requirements for the truth in lending act tiller | loan estimate must delivered to borrower within 3 business days of application. Redisclosure is required if the APR is greater than 1/8 of a percent or .125% period if the APR is inaccurate must be disclosed no later than 4 business days prior closing |
| Charm booklet is the consumer handbook for what type of mortgages? | Adjustable rate mortgages |
| How many days does a consumer have as a right of rescission? | Three business days after settlement |
| The APR is also known as the _______ and is always greater than or equal to the note or Domino rate | Effective rate |
| HOEFA triggers? | When APR exceeds the average prime offer rate by more than six and a half percent or eight and a half percent on a second mortgage. Total origination fee exceeds 5% of the loan |
| If HOEFA is triggered, in addition to the above reference disclosure the borrow must demonstrate the ability to pay or the transaction is considered unlawful the borrows debt to income ratio may not exceed what percentage% | 50% |
| What is the prime rate APR? | APR For a 30-year fixed rate loan. Prime borrower is any Freddie Mac or Fannie Mae loan |
| The consumer financial protection bureau which took over regulatory authority | TILA HPA RESPA FCRA FACTA Portions of Gramm Leach Bliley Act ECOA Safe Act |
| What is a qualified mortgage? | Alone where the origination fees don't exceed 3% of the loan amount and the debt to income ratio don't exceed 43% period an exception of the 43% rule occurs when the loan is approved by one of the automated underwriting systems period lp, du or total |
| What are the three automated underwriting systems? | Lp, du and total |
| The truth and lending neck is known as regulation z. True or false | True |
| The right of recession is applicable for the refinance of a second home true or false | False |
| The nominal rate is usually higher than the APR true or false? | False |
| The charm booklet must be given to the consumer no later than at closing true or false? | False must be given three business days before closing |
| The APR is considered accurate if it's within 1/8 of a percent true or false? | True true |
| Triggering terms are specific, i. E, payment or down payment amount true or false? | True |
| The effective rate is the APR true or false? | True |
| High price loans have an additional 3-day cooling off. True or false? | False |
| the loan estimate must be delivered within three business days from the date the lender receives a completed application, true or false? | True |
| If hoepa is triggered the borrow must show sufficient income true or false | True |
| Prepayment penalties are disclosed in the LE lender estimate true or false? | True |
| Lake charges are not disclosed in the Le statement true or false? | False |
| Purchases are subject to the three business day right of recession true or false? | False |
| Title insurance is considered a finance charge as required per regulation z, true or false? | False |
| all owners of a primary home must be given two notices of the right to rescind in a refinance transaction, even if they do not sign the note true or false? | True |
| The consumer financial protection bureau enforces regulation z true or false | True |
| An application fee may be collected by the mortgage broker prior to delivery of the disclosures true or false? | False |
| a credit report fee is the only upfront fee that may be collected by the mortgage broker within three business days from the date of application true or false? | True |
| as per the mortgage disclosure improvement act a closing may not occur for seven business days from the date a borrow received the initial disclosure true or false | True |
| The initial APR quoted the consumer was 5.125% at settlement the APR is 5.215%. new disclosures must be given to the borrower because of the change true or false? | False falls under .125% or 1/8 of a percent |
| A qualified mortgage loan is defined as a loan where the origination fees do not exceed 3% and the debt to income ratio do not exceed 43% unless the loan is approved through du, LP or total | True |
| Who regulates the safe act? | CFPB consumer financial protection bureau |
| What is FCRA | Fair credit reporting act |
| What is FACTA | Fair and credit transaction act |
| What does FACTA the fair and accurate credit transaction act do | It gives the consumer more rights and provides for additional protections relative to Identity theft. |
| What are red flag rules? | applies to any person who regularly participates in credit decisions or any person who requests a consumer report including mortgage brokers. Law is a consumer financial protection bureau cfpb |
| What is the gram leech blileyy act GLBA? | contain certain safeguard rules that require financial institutions to design, implement and maintain safeguards to protect customers information while in the custody and said control of set institution |
| Definition of a customer? | Has an ongoing relationship with the creditor an annual privacy notice is required. |
| What is a consumer? | A one-time transaction with the creditor privacy notice is not required |
| Who is the regulator of the gram leech bliley act GLBA? | CFPB |
| What is a telemarketing law? | Creates a national do not call register that is managed and enforced by the ftc, FCC and state enforcement |
| What is the flood disaster protection act regulation h? | Regulated by FEMA the Federal emergency Management agency. requires lenders to order a Flood certificate 4 the property for a loan is originated. If property is in the flood zone, flood insurance a condition of the loan. |
| What is the homeowners protection act PMI cancellation act? | the automatic cancellation PMI by the lender when mortgage has been paid down to 78% of properties original value provided borrow current payments. Borrow canceled PMI submitting a written request to the lender when the principal balance 80%. |
| a mortgage company originates a loan for a borrow on the do not call list period at what point would we violating telemarketing laws to call the client? | 18 months |
| What is the earliest point a homeowner May cancel PMI coverage? | 80% LTV |
| How long will a derogatory credit show on a credit report? | 7 years |
| The external do not call this must be updated every _____ months? | 3 months |
| Automatic PMI termination occurs at what point? | When when the loan has been paid down to 78% of the properties original value. |
| What act applies to PMI cancellation? | HPA homeowners protection act |
| The gram leech bliley act requires at the privacy notice be given to the customer at the time a relationship is established and then annually during the continuation of that relationship true or false? | True |
| Which of the following would be a red flag? A. fraud alert on the borrowers credit report B. Suspicious identifying documents C. Unusual behavior detected in the credit report D. All of the above | D all of the above |
| A letter of adversed action must identify: A. the name of the lender B. The credit agency that reported the negative information C. Specific reason for the adverse action D. All of the above | D. All of the above |
| Who ultimately oversees the safe act? | Cfpb consumer financial protection bureau |
| if the borrow is turned down for a credit he has a right to a free copy of the credit Port within 60 days true or false? | True |
| The cfpb enforces which laws? A. Fair credit reporting act B. Fair and accurate credit transactions act C.the truth in lending act D. All of the above | D. All of the above |
| According to FACTA, it would be considered a red flag if the applicant is a recent immigrant true or false? | False |
| according to the Fair credit reporting act, does a consumer have the right to inspect and correct errors on their credit report true or false? | True |
| the Fair credit reporting act requires all three national repositories of accumulated credit to give a consumer a free copy of their borrows credit report every 12 months true or false? | True |
| A bankruptcy will stay on your consumer's credit report for: a. 7 years b. 10 years c. 5 years d. 25 months | B. 10 years |
| if a consumer on the do not call list makes an inquiry with the mortgage company the mortgage company May return the call within _____ months with no penalty l? A 18 b25 c 12 d 3 | 3 months |
| The internal do not call this must be updated every _____ months | Every month |
| The secondary market consists of? | GNMA Ginnie Mae FNMA Fannie Mae FHLMC Freddie Mac |
| GNMA stands for | Government national mortgage association. Purchase government back loans such as fha, va, USDA. They carry the full faith and credit guarantee of the United States government |
| FNMA stand for Fannie Mae | Federal national mortgage association. Purchase and securitize conforming loans Uses the desktop underwriter. |
| Who uses the underwriting called desktop underwriter | Fannie Mae Federal national mortgage association |
| Who uses its underwriting system called loan prospector | Freddie Mac FHLMC Purchase or securitize conforming loans |
| FHFA the federal housing financial agency does? | Sets the criteria for what Fannie Mae and Freddie Mac can buy. Conforming loans maximum loan amount are $484,350.00 |
| What are jumbo loans? | Loan amount that exceeds the conforming loan amount of $484,350.00 |
| What are non-conforming loans? | Loans that do not conform to the standard underwriting guideline set by Freddie Mac and Fannie Mae |
| What is a 203b FHA loan? | Single family program which provides mortgage insurance to lenders to protect against the borrows defaulting. Any fixed 30-year rate long-term. |
| What is a 203K FHA loan? | Enables buyers to both purchase of a house and the cost of rehabilitation through a single family mortgage loan. |
| What is a 234c FHA loan? | |
| What is a 234c FHA loan? | For condominiums and must approve the entire complex. |
| What are a section 251 FHA arm loans? | Periodic cap of 1% increase or decrease Overall cap of 5% Index is the one-year treasury bill Borrow must be qualified at the maximum rate possible the second year of the loan if the start rate is 5.5 the borrower must be qualified at 6.5% |
| VA loans veterans affairs | That V8 guarantees mortgage loans up to 25% of fhlmc maximum allowable loan limit. |
| What is required for a VA loan? | Certificate of eligibility Form DD-214 |
| What does the VA charge for a loan guarantee? | A funding fee. No funding charge if the veteran is disabled |
| What is the debt ratio for a VA loan? | 41% |
| What is the seller's assistance for a VA loan? | 4% |
| What is the LTV of a VA loan? | 100% loan to value |
| What is a USDA loan? | Provides credit in rural areas. Guarantees, insurance and makes loans. Section 502 loans offer 100% LTV |
| What are non-traditional loans? | non-traditional loans and subprime loans include recommendations that additional disclosures must be given to the consumer relative to prepayment penalties, balloon payments, responsibility for paying escrows, taxes and insurance |
| What is predatory lending? | making loans based on predominantly on the foreclosure or liquidation value of the borrowers collateral rather than the ability to repay the debt. Loan flipping Conceal the true nature of the mortgage loan obligation Pack with toxic features |
| What is a fully amortized fixed rate loan? | Any mortgage loan with the interest expense and remains the same period.principal portion of the monthly payment increases and interest portion decreases |
| What is a balloon mortgage? | Any loan that is partially a mortise size but not fully a motor size by the end of its term. |
| What is the rate cap for a conforming loan? | 2/6 |
| What is the rate cap of an FHA loan? | 1/5 |
| What is a reverse mortgage HECM? | FHA insured the borrower May opt to accept a one lump sum or monthly payments the rest of the natural life or a combination of both. Borrow must be 62 years old to qualify loan is paid off by the estate after the borrower passes away |
| What is a straight note | Is an interest only loan |
| What is a graduated payment mortgage? | a borrow who are in a profession where advancements is likely but not yet paid enough to make the payment needed to fully and mortise the loan debt |
| What is a purchase money mortgage? | Mortgage given by the seller as part or whole of the purchase price also known as seller financing |
| What is a package mortgage? | Encumbers both real and personal property |
| What is a blanket mortgage? | Encompass more than one parcel of land. Most black mortgage is contained a release clause which allows the lender to release a parcel of land provided the loan is paid down by a certain dollar amount. |
| What is an open-end mortgage? | mortgage loan that has an open end clause in it that allows to borrow to borrow back up to the original principal balance without further qualifications. Most common is a home equity line of credit HELOC. |
| What is an acceleration clause? | also known as a due on sale clause period allows a lender to call the note upon transfer of title, or even if it's on social interest in the property is transferred. |
| What is buy down? | When discount points are charged at settlement to buy down or discount the rate. Permanently buy down means at the borrow paid an upfront discount points to buy down the rate for the life of the loan. |
| What is permanent buy down? | Borrow paid upfront discount points to buy down the rate for the life of the loan. |
| What is temporary by down? | Means that the front points were paid to lower the rate the first few years of the loan term. |
| What is graduated payment by down? | that the interest rate is discounted by several points during the first year of the loan term and then lesser for each subsequent year for example three to one buy down means that the rate was lower 3% the first year 2% the second year and 1% the third yr |
| What is conveyance mean? | The transfer of the title to land from one person or class to a person to another |
| What is prepayment penalty? | A provision in some loans that charge a fee for two a borrower who pays off the loan before it's due. |
| What is subordination clause? | gives a mortgage recorder a later date the right to take priority over an earlier recorded mortgage, usually a first mortgage on land becoming subordinate to a new construction loan. |
| What is annual percentage rate? | The relationship between the cost of borrowing closing costs and the modified loan amount expressed as a percentage. |
| What is a balloon payment? | The final lump sum payment due at the end of a balloon mortgage. |
| What is rescind? | To take back or withdraw an offer or contract. |
| What are commercial banks? | Financial institution that provides short-term commercial and consumer loans |
| What are credit unions? | A nonprofit depository institution serving groups that hold a common interest. |
| What are savings and loan associations? | Specialize in utilizing deposits for the making of mortgage loans through the process of intermediation |
| What is a mortgage banker? | a lender that represents a certain funding source, ie, a person fund or insurance company. A mortgage banker will locate borrows that meet the underwriting guidelines set by these investors and service the loan on their behalf. |
| What is a mortgage broker? | A firm that originates loans and processes loan for a number of lenders. |
| What is a service release premium? | Compensation received by the mortgage lender from the permanent investor for delivering the loan at above market rates. |
| What is table funding? | When a mortgage company closes alone in their name using the funds from another investor. |
| What is yield spread premium ysp? | The money is paid to a mortgage broker by lending the adding value to the loan . The ysp is usually paid for increasing the note rate or adding free payment penalties. |
| What is a mortgagee? | The lender period gives money to the mortgager the borrower |
| What is a mortgager? | |
| The borrower | |
| The licensee loan originator gives money to the? | License store the state governments |
| Lessee tenant gives money to a? | Lessore landlord |
| A vendee the buyer give us money to the ? | Vendor seller |
| A grantee the buyer gives money to the ? | The Grand tour the seller |
| What is an assignee the buyer? | Of an existing mortgage loan gives money to the assignor the seller |
| Gnma Ginnie Mae purchases only conventional loans true or false? | False |
| FHA loans are guaranteed true or false? | False they are insured. |
| Mortgages are traded on the secondary market true or false? | True |
| A balloon mortgage is fully amortized true or false question | False |
| VA loans are insured true or false? | False VA loans are guaranteed |
| FHA loans are insured true or false | True |
| VA loans are guaranteed true or false? | True |
| Most construction loans are term mortgages true or false? | True |
| Fhma, fhsmc, are GSE's | True |
| GSE government sponsored enterprises? | Developed to stimulate the housing market. |
| GNMA, FNMA, FHLMC? | Develop to stimulate the housing market |
| The fhfa sets the criteria for the Fannie Mae and Freddie Mac true or false? | True |
| Portfolio loans are sold true or false? | False |
| Term mortgages and straight notes referred to an interest only loan true or false? | True |
| 203b FHA loans are used finance to purchase of a new and existing residential property true or false? | True |
| 203k is used to finance repairs true or false? | True |
| FHA arms have 2/6 caps true or false? | False |
| MIP is canceled automatically at 80% LTV true or false? | False |
| M i p is never removed at a 96.5 LTV true or false? | True FHA loan |
| An FHA down payment can be a gift true or false? | True |
| An FHA down payment can be a grant true or false? | True |
| FHA has a one debt to income ratio of 41% true or false? | False |
| FHA ratios are 31%/43% true or false? | True |
| FHA lends money true or false | False they insure the loan |
| FHA loans have a prepayment penalty true or false? | False |
| DE's are lenders that underwrite FHA loans and then fund them true or false? | True |
| The FHA appraisal report is called the CRV true or false? | False |
| A veterans guarantee amount is evidence of the CRV true or false? | False |
| VA debt to income ratio is 41% true or false? | True |
| The USDA ensures, guarantees and lens money? True or false | True |
| The maximum guarantee amount is 25% of fhlmc Max loan amount true or false? | True |
| The USDA provides credit in rural areas true or false? | True |
| HUD stands for the department of housing and Urban development true or false? | True |
| GNMA will buy fha, va, and USDA loans true or false | True |
| The overall rate cap on an FHA loan is 5% true or false? | True |
| FHA loans originated before December 15th 1989 are assumable true or false | True |
| The 203k is the FHA mortgage insurance program for condominiums true or false? | False |
| An option arm is a non-traditional loan true or false? | True |
| Subprime loans are made to borrow that have bad credit true for false? | True |
| "C" paper loans have scores that range from 620-659 true or false? | False |
| Subprime loans are non-traditional loans true or false? | False |
| Loans that are based primarily on the liquidation of the property are predatory loans true or false? | True |
| Payment shock occurs more in fixed rate mortgages true or false? | False |
| Option arm's usually cost payment shock true or false? | True |
| interagency guidance for non-traditional loans include recommendations that no further disclosures be given to the consumer true or false? | False |
| Interagency guidance for non-traditional loans encourage risk layering true or false | True |
| Interagency guidelines on non-traditional loans recommend a greater down payment in some cases true or false? | True |
| FNMA automated underwriting is a loan prospector true or false? | False |
| Fhlmc Freddie Mac automated underwriting is loan prospector true or false | True |
| Du is fnma's Fannie Mae automated underwriting system true or false? | True |
| Desktop underwriting is used by FNMA Fannie Mae true or false? | True |
| Eight interests only known is a straight note or a term mortgage true or false? | True |
| A budget mortgage does not include taxes and insurance true or false? | False |
| Index less margin will give the interest rate for an arm true or false? | False |
| A blanket mortgage includes personal property and real property true or false? | False |
| Package mortgage leans only personal property true or false? | False |
| Index added to the interest rate equals the margin true or false | False |
| Interest rate less margin equals the index true or false | True |
| Negative amortization occurs when payment caps exist true or false? | True |
| as the bar progresses through the long term in a fixed rate mortgage the interest portion of the monthly payment increases true or false? | False |
| Negative amortization occurs when the principal balance is reduced true or false? | False |
| Graduated payment mortgages create negative amortization true or false? | False |
| An overall rate cap refers to the maximum interest rate adjustments. True or false | False |
| A margin is used to measure current market rates true or false? | |
| False | |
| Index plus margin equals interest rate true or false? | True |
| the periodic cap limits the rate per adjustment period and the overall cap limits the rate of the life of the loan true or false? | True |
| 2/2/6 arm is the same as saying 2/6 arm true or false | True |
| An index is a way to measure current market rates true or false? | True |
| A reverse mortgage is guaranteed by the VA true or false? | False |
| A seller held a pmm purchase money mortgage is a mortgage usually given by an institution true or false? | False |
| A pmm purchase money mortgage is a mortgage given to a seller as part of the purchase price true or false? | True |
| A HELOC is a closed end mortgage true or false? | False |
| Most open-ended mortgages are home equity lines of credit true or false? | True |
| Most construction loans are fully amortized over 15 to 30 years true or false? | False |
| A takeout loan pays off the construction loan true or false? | False |
| Blanket mortgage usually contains a release class true or false? | True |
| An acceleration clause is also known as a subordinating clause true or false? | False |
| An acceleration clause is also known as a subordination clause true or false? | False |
| A due on sale clause is also known as a subordination clause true or false? | False |
| An alienation clause is also known as a due on sale clause true or false? | True |
| A subordination clause is found in most conforming loans true or false? | False |
| Commercial banks are interested in making short-term loans to their better clients true or false | True |
| A balloon mortgage is fully amortized sized true or false? | False |
| A mortgage broker funds loans true or false | False |
| Table funding means the lender that originates the loan funded the loan true or false? | False |
Created by:
lahen1965