Partial preview of the text
Download NMLS EXAMS WITH VERIFIED QUESTIONS AND CORRECT ANSWERS.pdf and more Exams Nursing in PDF only on Docsity!
)"# ' #$$A #$ ')!&& #<=
A borrower receives a document which contains a list of all closing costs, a disclosure of the borrower credits received on the transaction, an estimate of the cash the borrower needs to bring in to closing, and the sales price. Which of the following best identifies this document? a. Loan Closure b. Closing Disclosure c. Itemization of Amount Financed d. Loan Estimate - ANSWERS-d. Loan Estimate A consumer report is defined under which of the following federal laws? a. FACTA b. FCRA c. ECOA d. HMDA HAINSWERS!D. FRA A disclosure advising the borrower of their right to receive a copy of the appraisal must be delivered: a. At the time of application b. Within three business days of the application c. Any time during the processing of the loan d. Only if the loan is declined “ANSWERS. Within three business days of the application A first lien higher-priced mortgage loan (HPML) is defined as a loan with an annual percentage rate which exceeds the average prime offer rate by: a. 1% b. 1.5% c. 6.5% d.3.5% BANSWERS!D. 1.5% A first-lien mortgage loan will exceed the HOEPA APR threshold and qualify as a high- cost mortgage if its APR is: a. 1.5 percentage points above the average prime offer rate for a comparable transaction b. 6.5 percentage points above the average prime offer rate for a comparable transaction c. 3 percentage points above the average prime offer rate for a comparable transaction d. 4.5 percentage points above the average prime offer rate for a comparable transaction ANSWERS-> 6.5 percentage points above the average prime offer rate for a comparable transaction. A hazard insurance company hosts a dinner for the employees of a mortgage broker. The designated broker encourages the employees to send clients to the insurance company. Who has violated RESPA? a. The hazard insurance company b. Both the hazard insurance company and the mortgage broker c. The mortgage broker d. Neither the hazard insurance company nor the mortgage broker . Both the hazard insurance company and the mortgage broker A lender may charge a borrower for an appraisal fee once the borrower has received the Loan Estimate and: a. The Closing Disclosure b. Indicated an intent to proceed with the loan c. Paid a credit report fee d. Met with a financial counselor . Indicated an intent to proceed with the loan A lender may not charge for the preparation of any documents required ina federally- regulated mortgage loan transaction, based on provisions of the: a. Truth-in-Lending Act b. Home Ownership and Equity Protection Act d. The applicant is too young to have accumulated savings and requires a gift from his or her parents in order to make a down payment "ANSWERS-a. The applicant is too young to enter into a contract According to TILA, a variation of up to what amount is permitted for the annual percentage rate in a regular fixed-rate mortgage transaction? a. 0.25% b. 0.5% c, 0.125% d. 0.75% c. 0.125% All of the following are included in the calculation of the APR, except: a. Underwriting fees b. Buy-down fees c, Origination fees d. Title insurance fees d. Title insurance fees All of the following are TILA-required disclosures, except: a. CHARM Booklet b. Notice of Adverse Action c. Right to Rescind d. Loan Estimate - ANSWERS-b. Notice of Adverse Action An advertisement states "Buy for less than rent." Which of the following must be disclosed under Regulation Z? a. Down payment b. Loan amount c. APR d. None of the choices id. None of the choices An escrow account analysis has been completed on Mary Thompson's loan. It is discovered that there is a $40 overage in her account. How many days does the servicer have to return the money? a. There is no refund b. The servicer would not return the money; it would be applied toward the principal amount c. The servicer has 30 days from completion of the analysis to return the overage d. Ms. Thompson must be refunded within 90 days ANSWERS » There is no refund An individual who is an employee of a depository institution or a subsidiary of a depository institution meets the definition of a loan originator, defined as a(n): a. Licensed mortgage loan originator b. Exempt mortgage loan originator c. Registered mortgage loan originator d. Qualified mortgage loan originator . Registered mortgage loan originator An originator uses a contracted processor who charges $500 per file. The fee disclosed to the borrower for processing is $800, a difference of $300 which the originator keeps for himself. This is: a. A violation of RESPA's prohibition against fee-splitting b. Permitted only as long as receipts are kept from the processor for five years c. A unilateral markup, which is legal, but may be a violation of RESPA's prohibition against unearned fees d. A violation of ECOA QANSWERS!c. A unilateral markup, which is legal, but may be a violation of RESPA's prohibition against unearned fees Assessment of borrower repayment ability is not required for: a. Closed-end home loans b. Adjustable-rate home loans c. HOEPA loans d. Reverse mortgages d. Reverse mortgages Assume that the Loan Estimate is mailed on Tuesday. The office is open six days a week and closed on Sundays. What is the earliest day on which the transaction could close? a. The following Wednesday b. The following Friday c. The following Monday d. The following Tuesday a. The following Wednesday d. TILA MAINSWERS!.. FACTA Each of the following is true about the Department of Housing and Urban Development (HUD), except: a. The Federal Housing Administration, with its liberal-eligibility FHA loan programs, operates under HUD's authority b. It provides or makes referrals related to housing counseling for loan applicants seeking a HECM or high-cost home loan c, Public housing and multi-family housing fall under its purview d. It has a major role in overseeing the mortgage industry ANSWERS. c. It has a major role in overseeing the mortgage industry Enhancing protection and reducing fraud by directing states to adopt minimum uniform standards for the licensing and registration of residential mortgage loan originators was the purpose of the federal act known as the: a. S.A.F.E. Act b. Federal Trade Act c. Consumer Financial Protection Act d. Dodd-Frank Act QAINGWERS!a. S.A.F.E. Act Entities that gather and sell information regarding an applicant's credit in the form of credit reports are known as: a. Consumer finance associations b. Consumer reporting agencies c. Consumer reporting associations d. Consumer finance agencies . Consumer reporting agencies 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? a. All five b. A majority of the five c. At least two of the five d. Any one of the five “ANSWERS Any one of the five Homeownership counseling is required in transactions for all of the following, except: a. Higher-priced mortgage loan b. High-cost mortgage c. Reverse mortgage d. Negative amortization loan if the loan applicant is a first-time borrower ANSWERS.» Higher-priced mortgage loan Housing counselors must generally be approved by: a. The CFPB b. The Office of Financial Education c. HUD d. The NMLS . HUD If a borrower waives the right to receive a copy of an appraisal: a. They must receive a copy within 30 days of closing b. The lender is never required to give the borrower a copy of the appraisal c. They must receive a copy seven days before closing d. They must receive a copy at or before consummation “ANSWERS-d. They must receive a copy at or before consummation If aconsumer contacts a mortgage company, for how long does the established business relationship exemption exist? a. Nine months b. Six months c. 24 months d. Three months ANSWERS! d. Three months In order for a small creditor to originate a balloon payment qualified mortgage, the small creditor must hold the loan in its portfolio for: a. Twelve months b. Three years c. Two years Mortgage loan originator Trevor Tibbs has accepted a loan application for a dwelling that is a mobile home not permanently affixed to the land. Does this mobile home meet the requirements necessary for it to be considered security for a residential mortgage loan? a. Yes, a dwelling includes a structure whether or not that structure is attached to real property b. No, dwellings must be permanently attached to real property c. No, mobile homes are classified as personal property, not real property d. Yes, as long as the real property upon which the mobile home will be located is in the borrower's name, the loan may be a residential mortgage loan a. Yes, a dwelling includes a structure whether or not that structure is attached to real property Originators who mislead borrowers about the contents of their credit histories and/or their credit scores in an effort to steer them into disadvantageous loans are in violation of: a. ECOA b. FHA c. HPA d. FCRA HANSWERS!d. FCRA Regulation C requires lenders to: a. Report the race of its borrowers to HUD b. Provide free credit reports to declined borrowers and advise credit counseling c. If the borrower declines to self-report, indicate the borrower's race based on visual observation d. Disclose the APR to the borrower three days after application . If the borrower declines to self-report, indicate the borrower's race based on visual observation RESPA requires to be provided within 45 days of closing. It provides information regarding an estimate of related payments (for expenses such as taxes and insurance) that will be required in the first 12 months of the loan. a. The HUD-1 b. The Initial Escrow Statement c. The Loan Estimate form d. The Initial Rate Change Disclosure . The Initial Escrow Statement Slim Tipton, a recent widower, has just refinanced his home, which he has been renting to his son ever since he moved into a beachfront condo two years prior. The purpose of this cash-out refinance is to help his son, Tiny, start a printing business. In this scenario, who receives copies of the Notice of the Right to Cancel? a. Only Slim, since his wife is no longer alive b. Neither Slim nor Tiny receives a Notice of the Right to Cancel c, Slim and his son Tiny, since Tiny is living in the home securing the refinance d. Slim is the only one to receive a Notice of the Right to Cancel . Neither Slim nor Tiny receives a Notice of the Right to Cancel Taneka is licensed and has received her unique identifier from the NMLS. Taneka must clearly show her unique identifier on all of the following, except: a. Residential mortgage loan applications b. Solicitations and advertisements c. Websites d. Interoffice communications - ANSWERS-d. Interoffice communications The Barrows applied for a loan to buy a small duplex ina suburb of Springfield. However, shortly after they received the Loan Estimate from their lender, a tornado swept through Springfield and severely damaged the home they are purchasing, requiring construction and repairs. Under these circumstances: a. The previous Loan Estimate still applies b. The transaction is void c. The Barrows must reapply d. A revised Loan Estimate may be issued id. A revised Loan Estimate may be issued The CHARM Booklet is an educational disclosure required by which piece of federal legislation? a. RESPA b. Regulation B c. TILA d. FACTA HANSWERS!<. TILA The Derringers have rescinded their loan transaction, informing their lender of their decision by mail. They are entitled to a full refund within: d. Ensure the protection of personal information through an effective security program d. Ensure the protection of personal information through an effective security program The Loan Estimate is required for: a. All commercial and residential mortgage loans b. All closed-end federally related mortgage loans c. All nontraditional mortgage loans d. All open-end mortgage loans ANSWERS. All closed-end federally related mortgage loans The Red Flags Rule identifies all of the following as possible red flags, except: a. The borrower is buying an investment property b. The borrower fails to respond to a request for additional information c. The borrower's identification looks altered d. The borrower's address is invalid a. The borrower is buying an investment property The reporting form used to communicate HMDA data is called what? a. 1073 due annually by March 1st b. Loan/Registration Application due annually by March 1st c. 1004 due annually by March 1st d. Loan/ Application Register due annually by March 1st ~ ANSWERS-<. Loan/ Application Register due annually by March 1st The right to rescind a loan applies to which one of the following transactions? a. A transaction for a home equity line of credit secured by a principal residence b. A transaction involving a loan to purchase a principal residence c, A refinancing of credit with the same creditor that made the loan being refinanced d. A transaction for the refinance of a loan that is secured by a vacation home a. A transaction for a home equity line of credit secured by a principal residence The right to rescind is one that consumers may: a. Not waive b. Waive if they notify the creditor at the time of the loan application that they wish to do so c. Waive if they do so in writing in order to meet a bona fide financial emergency d. Waive if they complete a printed form . Waive if they do so in writing in order to meet a bona fide financial emergency The term " state licensed mortgage loan originator" applies to an individual that works for: a. Bank or credit union b. Mortgage broker only c. Mortgage broker or lender d. Mortgage lender only “ANSWERS-<. Mortgage broker or lender The Truth-in-Lending Act: a. Regulates the time a borrower is required to pay private mortgage insurance b. Requires that the borrower be informed of estimated closing costs within three business days of application c. Regulates language and terms used in advertising for credit d. Prohibits unlicensed brokers from offering government loan products . Regulates language and terms used in advertising for credit The types of high-cost mortgages that may be subject to HOEPA include all of the following, except: a. Refinances b. Reverse mortgages c. Home equity lines of credit d. Loans to purchase a home ANSWERS). Reverse mortgages Under ECOA, it is permissible to do which of the following? a. Base a credit decision solely on the fact that a borrower was in a consumer credit counseling program. b. Refuse to allow a borrower to use public assistance income to attempt to qualify c. Make oral or written statements that might discourage a prospective applicant from applying a. Protect borrowers from misleading advertising b. Eliminate unearned fees, such as referral fees, kickbacks, and fee splitting c. Protect the privacy of a borrower's personal financial information d. Provide the borrower an opportunity to rescind certain types of loans . Eliminate unearned fees, such as referral fees, kickbacks, and fee splitting When a creditor revises a Loan Estimate, it must deliver the revised disclosure to the loan applicant: a. No later than seven business days prior to consummation b. No later than four business days prior to consummation c. On the same date that it delivers a Closing Disclosure d. At the same time that the revisions are made . No later than four business days prior to consummation When a fixed-rate qualified mortgage includes a prepayment penalty, that penalty may not be charged: a. Until after the first three years of the loan term have passed b. After the first three years of the loan term c. Until there are three years left in the loan term d. Prepayment penalties may not be charged on fixed-rate qualified mortgages “ANSWERS.b. After the first three years of the loan term When is a SAR (Suspicious Activity Report) required to be submitted by ina MLO suspects money laundering? a. Within 24 hours b. Within 30 days c. Within 15 days d. Within 5 days . Within 30 days When may a homeowner request that PMI be cancelled? a. When the lender informs him/her that it is terminating PMI b. As soon as the five-year required minimum is met c. As soon as his/her equity position reaches at least 22% d. As soon as his/her equity position is 20% or greater d. As soon as his/her equity position is 20% or greater When may a mortgage loan originator give preferential treatment to a borrower? a. Any time b. Never c. Never, unless the borrower is a member of a minority race d. At any time, as long as it is not based on a class covered by the Equal Credit Opportunity Act d. At any time, as long as it is not based on a class covered by the Equal Credit Opportunity Act When must loan applicants receive an adverse action notice if they cannot qualify for a loan? a. Within 15 days of loan application b. Within 60 days of loan application c. Within 30 days of loan application d. Within 90 days of loan application . Within 30 days of loan application When would it be ethical for a mortgage broker to offer a loan with a rate higher than the best rate available to the borrower? a. Never b. Only when the borrower is unaware and will likely not know c. If the lender agrees to subsidize the broker fee d. If the borrower chooses the rate and plans to use the additional premium to offset closing costs “ ANSWERS-d. If the borrower chooses the rate and plans to use the additional premium to offset closing costs Where inquiries related to marital status are permitted (e.g., community property states), Regulation B permits the creditor to inquire using any of the following terms, except: a. Unmarried b. Divorced c. Married d. Separated ~ ANSWERS-b, Divorced b. "Affordable payments" c. "5.75% APR" d."5% down payment" id. "5% down payment" Which of the following is a trigger term for advertisements for both open-end and closed-end mortgage loans? a. Finance charge b, Amount of down payment c. Period of repayment d. Number of payments a. Finance charge Which of the following is least likely to be held in an escrow or reserve account? a. HOA fees b. Mortgage insurance premium c. Hazard insurance reserve d. Property tax reserve a. HOA fees Which of the following is not a part of the definition of a loan originator? a. For compensation or gain, takes residential mortgage applications b. For the expectation of compensation or gain, offers or negotiates terms of a residential mortgage loan c. Person or entity that only performs clerical duties in the processing of the documents d. For compensation or gain, negotiates residential mortgage loans “ANSWERS... Person or entity that only performs clerical duties in the processing of the documents Which of the following is not a part of the definition of a loan originator? a. For compensation or gain, takes residential mortgage applications b. For the expectation of compensation or gain, offers or negotiates terms of a residential mortgage loan c. Person or entity that only performs real estate brokerage activities d. For compensation or gain, negotiates residential mortgage loans ~ ANSWERS. Person or entity that only performs real estate brokerage activities Which of the following is not considered one of the six essential pieces of information constituting an application under RESPA? a. Borrower Social Security Number b. Loan program c, Borrower monthly income d. Loan amount . Loan program Which of the following is not permitted for a HOEPA loan? a. Documenting a borrower's ability to repay the loan b. Requiring a balloon payment after the first five years c, Refinancing into another HOEPA loan within 12 months if it is in the borrower's best interest d. Making a loan solely based on the collateral value of the property ANSWERS-. Making a loan solely based on the collateral value of the property Which of the following is not prohibited by RESPA? a. Reasonable fees paid for services actually performed b. Kickbacks c. Referral fees d. Premiums charged on fees for third-party services a. Reasonable fees paid for services actually performed Which of the following is NOT required by the BSA? a. Reporting suspicious activity and transactions b. Generating requests for information from FinCEN c. Reporting large currency transactions d. Implementing an anti-money laundering (AML) program “ANSWERS-b. Generating requests for information from FinCEN Which of the following is required if a borrower receives an Adverse Action Notice? a. A suggestion of a loan product for which the consumer may be eligible b. A referral to a lender who offers subprime products c, A statement that ECOA prohibits discrimination against credit applicants d. A statement of the minimum credit score required for loan approval . A statement that ECOA prohibits discrimination against credit applicants Which of the following is required to be reported under the BSA? 
