Author: learnersreference

1) The mortgage Loan originator is not officially licensed to work with a customer in a particular state. However, his company has branches in a different state that has a loan officer who happens to be his friend. The loan officer sends this applicant as a referral and the officially licensed loan officer does process the loan application in the other state. At the end of this transaction the loan officers split the commission on a 50/50 basis. Is this legitimate?
a) Yes, as long as the licensed loan officer does the loan processing commission split is allowed
b) Yes, referral is allowed as per SAFE act
d) No, referral is allowed as per SAFE act but commission split is not allowed as per RESPA
d) No. SAFE act does not allow referral, RESPA does not allow commission split in this case
Answer : d
Explanation : Above activity is a violation of both SAFE and RESPA
2) A home buyer wants to finance their home purchase with 9% down payment. To what percentage of the purchase price can the seller offer seller’s concession?
a) 3%
b) 9%
c) 6%
d) 2%
Answer : a
3) What is the main use of Loan application register LAR?
a) Lenders use this form to report HMDA data
b) Lenders use this form to check federal tax return of borrower
c) Lenders use this form to check state tax return of borrower
d) Borrowers use this form to check credibility of lender
Answer : a
4) A borrower has applied for a loan showing regular income and overtime income. When is the overtime income considered as valid?
a) Overtime income should have been consistently earned over past two years minimum and employer verifies that it is likely to continue
b) Overtime income has been earned over past six months and employer has verified that this is likely to continue
c) Overtime income should have been consistently earned over past six months minimum and employer verifies that it is likely to continue
d) Overtime is always an anomaly
Answer : a
5) Does reverse mortgage come under HOEPA coverage?
a) Yes, it does
b) Yes, if the loan amount exceeds $451300
c) No, it is exempt from HOEPA
d) The mortgage loan officer can decide on this on a case by case basis
Answer : c
6) In an appraisal the property owner has been mentioned as someone other than the seller appearing on the sales contract.What is this attempt referred to as?
a) Blue flag
b) Red flag
c) Green flag
d) Violet Flag
Answer : b
7) A borrower sells his property and has mortgage balance in his property. Mortgage lender demands repayment of remaining balance in full. Under which mortgage clause can they demand this?
a) Alienation clause
b) Acceleration Clause
c) Abandoned Clause
d) Acceptance Clause
Answer : a
8) A loan meets Fannie Mae and Freddie Mac standards and this can be sold in secondary market. What is this loan referred to as?
a) Conventional loan
b) USDA Loan
c) VA Loan
d) FHA Loan
Answer: a
9) As per federal laws within how many days should creditors render credit decision after receiving complete loan applications?
a) 10 days
b) 20 days
c) 30 days
d) 40 days
Answer : c
10) A borrower’s credit report has been pulled to determine if they are qualified to receive a loan. How long are these credit reports good to go to make a decision?
a) 100 days
b) 110 days
c) 120 days
d) 130 days
Answer : c
11) Who performs clerical or support duties at the direction of an institution that is licensed or exempt?
a) Underwriter
b) Loan Processor
c) Realtor
d) Title attorney
Answer : b
12) A borrower’s source of income is a form of public assistance like social security benefits,childsupport etc. If this considered adversely when underwriting the loan?
a) Yes, receiving public assistance is an adversely
b) As per RESPA this is an adversely
c) As per TILA this is not an adversely
d) As per ECOA this is not an adversely
Answer : d
13) What is the penalty for calling consumer on the National Do Not Call Registry?
a) $10000
b) $20000
c) $30000
d) $42350
Answer : d
14) Who is the conveyor of the deed?
a) Lender
b) Mortgage broker
c) Grantor
d) Grantee
Answer : c
15) What are the three national deposit repositories also called as credit reporting agencies?
a) Fannie Mae, Freddie Mac, Ginnie Mae
b) Experian, Transunion, Equifax
c) Equifax, Fannie Mae, Experian
d) Experien, Fannie Mae, Ginnie Mac
Answer : b
16) Which among the following is an uniform settlement disclosure following TILA?
a) Opening Disclosure
b) APR Disclosure
c) Closing Disclosure
d) Broker Disclosure
Answer : c
17) Which law demands the delivery of closing disclosure?
a) RESPA
b) TILA
c) HMD
d) ECOA
Answer : b
18) Which is the Title V of HERRA?
a) SAFE act
b) TILA
c) RESPA
d) ECOA
Answer : a
19) A customer is asking for list of title companies from their mortgage broker and gets list of some good title companies in that location. The loan officer has no interest or relationship with any of those title companies. At what point are they supposed to disclose AfBA disclosure to the customer?
a) At the start of mortgage origination process
b) No need to provide AfBA as the loan officer has no ownership (or) affiliation interest with any of these title companies
c) 2 days after mortgage origination process
d) During appraisal process
Answer : b
20) When a mortgage advertisement talks about interest rate offered as percentage this requires full disclosure of credit terms under Regulation Z. What needs to be included in here to make it Regulation Z compliant?
a) No need to provide more info as this is complete
b) Loan tenure makes it complete
c) Determine down payment to make it compliant
d) All finance charges and APR the annual percentage rate should be disclosed
Answer : d
21) Which advertisement requires full disclosure of credit terms as per Regulation Z?
a) Loan offered at 2% interest rate
b) Down payment as low as 5%
c) Lender credit provided
d) Fixed and Adjustable Loans available
Answer : a
22) TILA requires creditors to maintain general TILA disclosures, Loan estimate (LE) and closing disclosures for specific amount of time. How long should each be maintained?
a) All of these are retained indefinitely
b) General disclosure for 2 years, LE for 3 years, closing disclosure for 3 years
c) General disclosure for 2 years, LE for 2 years, closing disclosure for 3 years
d) General disclosure for 2 years, LE for 3 years, closing disclosure for 5 years
Answer : d
23) Which law limits the amount of points that can be charged on loans without additional disclosures?
a) RESPA
b) TILA
c) HOEPA
d) ECOA
Answer : c
24) How long must a general TILA disclosure be retained by creditors?
a) 2 years
b) 12 years
c) 22 years
d) 32 years
Answer : a
25) How long does a loan estimate need to be retained as per TILA?
a) LE must be kept for 1 year
b) LE must be kept for 7 years
c) LE must be kept for 3 years
d) LE must be kept for 10 years
Answer : c
26) How long must a closing disclosure be retained by creditors as per TILA?
a) 3 years
b) 7 years
c) 17 years
d) 5 years
Answer : d
27) What does RESPA translate to?
a) Real Estate Status Protection Act
b) Real Estate Statutory Protection Act
c) Real Estate Settlement Procedures Act
d) Real Estate Settlement Protection Act
Answer : c
28) Which law governs the disclosure of AfBA to customers during loan origination process in case the loan officer happens to be title company owner has some interest in that firm?
a) TILA
b) RESPA
c) ECOA
d) GLB
Answer : b
29) What is the other name of RESPA regulation?
a) Regulation X
b) Regulation Y
c) Regulation Z
d) Regulation B
Answer : a
30) What does HMDA translate to?
31) A loan officer is involved in soliciting homeowners to sell their properties in a particular neighborhood owing to changes in social status in that particular neighborhood. What is this practice referred to as?
32) Financial institutions need to address the housing need of their communities. Which law does take care of it by identifying discrimination in lending patterns if any?
33) According to Fair Housing Act which among the following is not considered protected class?
34) When a mortgage advertisement talks about interest rate offered as percentage this requires full disclosure of credit terms under Regulation Z. What needs to be included in here to make it Regulation Z compliant?
35) For state-licensed loan originators minimum of how much hours of approved pre-licensing is needed as per SAFE Act?
36) Which among the following is a national credit repository?
37) Which law limits the amount of points that can be charged on loans without additional disclosures?
38) Which among the following takes into consideration total amount financed and cost of borrowing?
39) Which among the following represents the true cost of lending and is represented as percentage?
40) How long does a loan estimate need to be retained as per TILA?
41) How long must a closing disclosure be retained by creditors as per TILA?
42) Which among the following is an uniform settlement disclosure following TILA?
43) Which law demands the delivery of closing disclosure?
44) Does RESPA allow payment of nominal service fee for services rendered in mortgage loan origination process?
45) When a borrower revise their income amount showing higher income to qualify for home loan is this considered straw borrowing?
46) TILA requires creditors to maintain general TILA disclosures, Loan estimate (LE) and closing disclosures for specific amount of time. How long should each be maintained?
47) Which advertisement requires full disclosure of credit terms as per Regulation Z?
48) According to GLB act the financial institutions need to provide consumers with a consumer privacy policy. At what stage do they need to provide this?
49) Which among the following is considered least important while approving loan?
50) A mortgage company is offering loan to borrower who recently has lost his job and has no income. The loan officer is aware that borrower will not be able to repay this back so that mortgage company can foreclose this property and retain equity excess. What is this type of lending referred to as?

NMLS Practice test helps you prepare for your upcoming NMLS Exams. Pass the exam by preparing questions covering all topics of NMLS questions discussed here :
1) Which is the document created by AARMR and CSBS to guide states in implementing legislation required by SAFE act?
a) State Law
b) Model State Law
c) Federal State Law
d) Mortgage State Law
Answer : b
2) How are telemarketing sales rule violators penalized?
a) Violators need to pay a fine of $400 per occurence
b) Violators need to pay a fine of $4000 per occurence
c) Violators need to pay a fine of $40000 per occurence
d) Violators need to pay a fine of $40 per occurence
Answer : c
3) Who should identify an applicant in the face-to-face transaction?
a) The mortgage loan originator
b) Realestate broker
c) Realtor
d) Underwriter
Answer : a
4) An account is offered or maintained by a financial institution or creditor that is intented for personal, family, household purposes and is allowed multiple payments or transactions. Under FTC’s red flags rule what is this account called?
a) Fixed account
b) Closed account
c) Covered account
d) Uncovered account
Answer : c
5) When is a loan applicant required to disclose the earnings of alimony, child support, separate maintenance? Choose all that apply.
a) Covered Loans
b) USDA Loan
c) Community Lending
d) State Bond Program
Answer : b,c,d
6) What is needed to apply for a VA loan aka vetaran loan?
a) Income statement
b) Social Security Number
c) Address Proof
d) Certificate of eligibility
Answer : d
7) What is the maximum amount upto which veteran loan aka VA loan can be granted with 0% downpayment?
a) $453000
b) $453100
c) $453200
d) $453300
Answer : b
8) What is the maximum origination fee permitted by Veteran loan VA Loan?
a) 1%
b) 2%
c) 3%
d) 4%
Answer : a
9) Can a VA loan closing costs be included in loan repayment?
a) Yes, it is possible
b) Yes, it is possible with extra payments
c) Nope. Closing costs must be always paid out of pocket
d) All of the above
Answer : c
10) What does 4506-T form authorize a provider?
a) Receive a copy of applicant’s federal tax return
b) Receive a copy of applicant’s state tax return
c) Receive a copy of applicant’s bank statement
d) Receive a copy of applicant’s SSN
Answer : a
11) What is the fee cost associated with 4506-T form?
a) No fee
b) $100
c) $10
d) $2
Answer : a
12) Who has provided guidance on nontraditional mortgage product risks based on joint study reviewing the mortgage industry and products it was offering?
a) CSBS and AARMR
b) CSBS and FATCA
c) AARMR and RESPA
d) TILA and RESPA
Answer : a
13) Based on joint study from CSBS and AARMR reviewing the mortgage industry and products offered in nontraditional mortgage space the product risks have been identified and guidance on handling these products have been established. What were the recommendations given in guidance based on the study?
a) Stronger Loan Terms
b) Stronger underwriting standards
c) Caution regarding layering of risk by analyzing creditworthiness
d) Ways in which consumers need to be protected from unscrupulous mortgage professionals
e) All of the above
Answer : e
14) Is Subprime abuses a component of the guidance on nontraditional mortgage product risks presented by joint study conducted by CSBS and AARMR?
a) Yes, it is the major component to be considered
b) Yes, it is an optional component
c) No, it is not a component in this guidance
d) None of the above
Answer : c
15) When did congress enact ECOA to eliminate the discriminatory treatment of credit applicants?
a) 1989
b) 1999
c) 2007
d) 1974
Answer : d
16) What is the ethical way to ask an appraiser to consider different comparables?
a) Can you provide me a different value
b) Can you offer me higher appraisal value
c) Can you offer me lower appraisal value
d) Can you consider this comp instead of that one?
Answer : d
17) Whom does a buyer and lender providing mortgage depend on to determine the market value to the property?
a) Title Insurance
b) Attorney
c) Realtor
d) Appraiser
Answer : d
18) Who establishes consumer’s right to place a fraud or active duty alert on his or her credit profile?
a) TILA
b) RESPA
c) CSBS
d) FCRA
Answer : d
19) A mortgage company has a policy to communicate with its customers through mobile SMS only as a cost-cutting measure. A group of existing and potential customers are likely to be impacted by this policy owing to not owning the mobile considering its cost. This company policy does imapct its customers not on an intentional basis. What is this policy referred to as?
a) Fraud and alert
b) Big Bang Advertising
c) Direct Impact
d) Disparate Impact
Answer : d
20) Which act addresses servicing transfers?
a) SAFE
b) FATCA
c) RESPA
d) FCA
Answer : c

21) A home buyer wants to finance their home purchase with 25% down payment. To what percentage of the purchase price can the seller offer seller’s concession?
a) 1%
b) 9%
c) 6%
d) 2%
Answer :b
22) The home is being purchased for investment purposes and buyer is looking for finance with 30% down payment. What is the maximum seller’s concession allowed as per conventional financial guidelines?
a) 2%
b) 3%
c) 9%
d) 10%
Answer : a
23) What is the main objective of HOEPA?
a) Prevent closing cost
b) Prevent Predatory lending
c) Prevent Lenders fees
d) Prevent title insurance
Answer : b
24) The customer makes some extra money and makes principal pre-payments against a fixed-rate loan. How does this affect the loan?
a) This reduces loan term and overall interest paid over life of the loan
b) This changes amortization schedule
c) This does not change loan term
d) None of the above
Answer : a
25) Does pre-payment of principal change the loan payment made?
a) Yes, it does
b) No, it does not affect the payment made
Answer : b
26) What happens to earnest funds deposit at the time of closing?
a) This amount gets forfeited
b) The amount is credited back to buyer at closing as a settlement fee credit
c) The amount is offered to buyer by seller to back out
d) The amount is offered by seller to buyer to not file legal case in future
Answer : b
27) A loan processing has been completed and home gets sold faster than 21 days. Is this considered a red flag?
a) Yes, this is a red flag as the transaction did complete within 30 days
b) No. this is not red flag
c) This is green flag
d) All of the above
Answer : b
28) What is the other name of conventional loan?
a) Jumbo loan
b) ARM loan
c) Conforming loan
d) Floater
Answer : c
29) The loan closes at a balance and appraised value at a LTV ratio of 76%. Does this need PMI?
a) No need as LTV is less than 80%
b) PMI is needed as LT is less than 80%
c) PMI is needed in case of jumbo loan
d) PMI is needed if borrower works for private sector companies
Answer : a
30) What is FHA rehabilitation program that allows for the acquisition of a property along with financing needed renovation?
a) 203(a)
b) 203(g)
c) 203(k)
d) 203(l)
Answer : c
31) Can 203(k) be used as purchase and refinance option?
a) Purchase option only
b) Refinance option only
c) Both purchase and refinance option
d) It depends on customer
Answer : c
32) Can a loan originator discuss details on her customer’s credit report to their colleague and determine if it would be better to approve after a red flag has been identified?
a) Yes, it is permissible on ethical terms
b) Yes, it is permissible as per Gramm-Leach-Bliley Act
c) No, it is now allowed as per Gramm-Leach-Bliley Act
d) No, it is not allowed. Any personal information of customer other than credit report can be discussed as per Gramm-Leach-Bliley Act
Answer : c
33) What does the safeguard rule GLBA stand for?
a) Gramm-Leach-Bliley Act
b) Gramm-Leach-Bosch Act
c) Gramm-Lilly-Bliley Act
d) George-Leach-Bliley Act
Answer : a
34) Is it true that a loan originator is exempt from having an unique identifier?
a) Yes, they dont need one
b) Yes, once they pass the exam there is no need of unique identifier
c) No, loan originators needs n unique identifier referred to as NMLS number
d) The loan originators can choose to have one NMLS number. This is optional
Answer : c
Explanation : A loan originator needs an unique identifier called as NMLS number to originate loans (mortgages)
35) A borrower contacts a mortgage loan officer to refinance their home. In due course of their conversation the borrower shares information including their income, birth date, social security number, bank account balances, marital status, home address, years of schooling, property value, needed loan amount, employer name. What must the loan officer do at the end of this call?
a) Issue a loan estimate within two general business days
b) Issue a loan estimate within three general business days
c) Issue a loan estimate within four general business days
d) Issue a loan estimate within six general business days
Answer : b
Explanation : In due course of their conversation borrower shared what is called as six pieces of information that is sufficient to activate a mortgage live application. With this consideration within 3 general business days loan estimate can be issued
36) Should a mortgage lender be concerned about borrowers hazard insurance (homeowner’s insurance) after mortgage is processed?
a) Nope. Once a mortgage processing is complete the responsibility rests with borrower
b) Nope. Homeinsurance needs to be mainted only for one year after home is purchased
c) Nope. Borrower can maintain insurance for 2 years only
d) Yes. Lenders need to know if the collateral is constantly insured against loss in case of damage or property destruction
Answer : d
37) A borrower avails loan on a residential property in which he/she will not be residing. What are such borrowers referred to as?
a) Redlining borrowers
b) Straw borrowers
c) Boycotting borrowers
d) Fraud Borrowers
Answer: b

38) What is the main objective of HOEPA?
a) Protect realtors
b) Protect mortgage loan originators
c) Protect from pre-payment penalties
d) Protect from predatory lending
Answer: d
Explanation : The main objective of Home ownership and equity protection act also called as HOEPA is to mainly address predatory lending activities that will lead to abusive practices in refinances, higher fees (or) interest rates in home equity loans and such predatory lending activities
39) What is the current conventional conforming loan limit for a single-family property as established by federal housing finance agency FHFA?
a) $100000
b) $500000
c) $510400
d) $341220
Answer: c
Explanation : The conventional also called as conforming loan limit as established by Federal housing finance agency right now is $510400. This value has been increased from $484350 as far as 2019 limit goes
40) The borrower is looking to borrow $600000 towards purchase of a single-family home. Can he make purchase under current conventional (or) conforming loan limit?
a) Yes, this is allowed upto 1 million USD
b) Yes, this is allowed upto $750000
c) Nope. The borrower needs to go for jumbo loan financing
d) It depends on decision made by mortgage loan originator
Answer : c
41) A loan borrower has purchased an appraisal from servicer stating that they have 21% equity in addiiton to properly paying back mortgage and having no subordinate liens. Do they still need to pay PMI?
a) Yes, PMI needs to be paid until LTV reaches 75%
b) Yes, PMI needs to be paid until LTV reaches 76%
c) No, once LTV reaches 80% PMI can be removed
d) No, as the borrower is properly paying bac
Answer: c
42) Which among the following is a main purpose of TILA(Truth in lending Act)?
a) Correctly disclosing cost of the credit to customer
b) Correctly disclosing MLO officer credentials to customer
c) Correctly disclosing PMI
d) Investment property related transactions
Answer: a
43) Which does support establishing the right of rescission to the borrower applicable to non-purchase of a residential home?
a) RESPA
b) FHFA
c) TILA
d) ECOPA
Answer: c
44) Which law does oversee primary residential transaction along with overseeing advertising?
a) RESPA
b) FHFA
c) TILA
d) ECOPA
Answer: c
45) TILA supports comparative shopping of residential property purchase. Is this correct?
a) Yes
b) No
Answer: b
Explanation : TILA is not concerned about comparative shopping except for that this helps borrower from predatory lending, provides transparency in residential transaction all the way upto advertising
46) You have saved cash on hand. But there is no proof of income source. What is this money referred to as?
a) Cash money
b) All cash money
c) Carpet money
d) Mattress money
Answer : d
Explanation : Mattress money is a generic term that is used to refer to cash on hand as it is often considered hidden in ones mattress. This is not going to help with mortgage transactions as there is no proper income source inspite of this money being savings. Look for a way to transfer this money onto legal sources like bank
47) Which loan does a veteran need to pay non-refundable funding fee based on the number of times he has used the loan?
a) Conventional Loan
b) FHA Loan
c) VA Loan
d) USDA Loan
Answer: c
48) A borrower abandons his property and has mortgage balance in his property. Mortgage lender demands repayment of remaining balance in full. Under which mortgage clause can they demand this?
a) Alienation clause
b) Acceleration Clause
c) Abandoned Clause
d) Acceptance Clause
Answer : a
49) Is it true that RESPA is also referred to as REgulation Z?
a) Yes, both represent the same
b) Yes, both are related to home loans
c) No. RESPA applies to certain homeloans whereas Regulation Z applies to all consumer credit
d) This can be determined based on homeloan type
Answer: c
50) Which act makes sure that credit is available to all with fairness and without discrimination by lenders?
a) HPA
b) ECOA
c) HOA
d) TILA
Answer : b
51) Which mortgage allows homeowners atleast 62 years of age to convert equity in their home into a monthly income stream or line of credit?
a) Blanket mortgage
b) Air loans
c) Senior loans
d) Reverse Mortgage
Answer : d
52) What does HMDA mean?
a) Home Mortgage Discrimination Act
b) Home Mortgage Direct Act
c) Home Mortgage Dependency Act
d) Home Mortgage Disclosure Act
Answer : d
53) A borrower is under public assistance and receiving a pension of $900. They have established confirmed source of income over next three years. How far can their income be grossed while determining their eligibility to qualify for conventional loans?
a) Current pension multiplied by 10%
b) Current pension multiplied by 20%
c) Current pension multiplied by 15%
d) Current pension multiplied by 25%
Answer : d
54) Which is the mortgage loan that has a fixed rate to start with and becomes adjustable-rate loan once the first few years of fixed-rate period expires?
a) Variable ARM
b) Double ARM
c) Combined ARM
d) Hybrid ARM
Answer : d
55) What are the four main key elements of safeguard rule?
a) Program co-ordinator, identification of risks, regular testing, oversight of third-party service providers
b) Program co-ordinator, identification of risks, risk testing, GLB
c) Program co-ordinator, identification of risks, security testing, oversight of third-party service providers
d) Program co-ordinator, identification of risks, regular testing, RESPA
Answer : a
56) Who is an individual that has been employed with an exempt depository institution and hence is exempt from licensure as a loan originator but only required to be registered with NMLS?
a) Licensed Mortgage Loan Originator
b) Registered Mortgage Loan Originator
c) Appraiser
d) Title search firm
Answer : b
57) Which law gives disclosures to borrowers and allows them to shop for best loans?
a) TILA
b) RESPA
c) Regulation X
d) ECOA
Answer : a
Explanation : Truth in lending act offers this opportunity to borrowers so that they can shop around and find the best deal
58) How will you determine if the property value meets the loan collateral?
a) Appraisal
b) Title Search
c) Mortgage lending
d) Realtor
Answer : a
59) What is the consumer handbook on adjustable-rate mortgages referred to as?
a) Charm booklet
b) Hybrid booklet
c) Fixed booklet
d) ARM booklet
Answer : a
60) The Charm booklet on adjustable-rate mortgages need to be provided within three business days of loan application to borrowers. Which regulation does regulate this?
a) Regulation B
b) Regulation X
c) Regulation Z
d) Regulation A
Answer : c
61) As per regulation Z charm booklet need to be provided within how many days of loan application on all adjustable-rate mortgages?
a) 1 business day
b) 2 business days
c) 3 business days
d) 4 business days
Answer : c
62) A mortgage banking firm pays commission for a closed loan to its MLO’s. Is this legal or illegal?
a) Legal
b) Illegal under TILA
c) Illegal under TILA/RESPA
d) Illegal under GLB
Answer : a
63) The lender needs to deliver the closing disclosures to borrower. In this case which can be a business day?
a) All five days of week
b) All days of week except sundays
c) All days of week except sunday and federal holidays
d) All days of week except saturday and federal holidays
Answer : c
64) Is it essential to specify closing cost of the loan in an advertisement when a triggering term is used in the advertisement?
a) No need to specify the closing cost of loan
b) It is mandate to specify the closing cost of the loan
c) It is required as per TILA
d) It is mandatory as per RESPA
Answer : a
65) What is the primary loan repayment ability is considered safe based on Interagency Guidance on Nontraditional Mortgage Product risk?
a) Borrower’s monthly income
b) Borrower’s collateral in form of property
c) Borrowers stock investments
d) Borrower’s business
Answer : a
66) The borrower borrows money from seller that is not disclosed and recorded to pay towards his downpayment and closing costs. Now this borrower has an unrecorded second mortgage. Is this ethical?
a) Yes, the borrower can borrow any undisclosed mortgage from anyone and it is perfectly legal
b) Yes, the borrower can borrow money as long as he is able to take care of closing costs
c) Yes, the borrower can borrow money as long as he is able to take care of downpayment
d) No, this is silent second and considered fradulent activity
Answer : d
67) The borrower borrows money from seller that is not disclosed and recorded to pay towards his downpayment and closing costs. Now this borrower has an unrecorded second mortgage. What is this referred to as?
a) Cash money
b) Silent second
c) Fraud mortgage
d) Cushion second
Answer : b
68) are the entities formed by the federal government that facilitate home ownership but is now separate from federal government and a publicly held corporation?
a) FBI Agency
b) Fannie Mae
c) Pennie Mae
d) Lincy Mae
Answer : b
69) Which among the following is a government-sponsored enterprise aka GSE established in 1938 by amending national housing act that facilitates local bank with federal money to finance home mortgages in an attempt to raise affordable housing and home ownership?
a) Federal National Mortgage Association
b) FNMA
c) Fannie Mae
d) All of the above represent single entity
Answer : d
70) What is the ticker symbol under which Fannie Mae aka Federal National Mortgage Association has been publicly trading ever since 1968?
a) FMCC
b) FNMA
c) FBA
d) FCA
Answer : b
71) A local realestate agent refers their clients to a lender they have been working with frequently and receives a percentage of closing cost as a commission. Both realtor and lender are violating RESPA. What could be the penalty in this case?
a) Upto $10000 fine, imprisonment upto 1 year or both for each incident
b) Upto $20000 fine, imprisonment upto 1 year or both for each incident
c) Upto $30000 fine, imprisonment upto 1 year or both for each incident
d) Upto $40000 fine, imprisonment upto 1 year or both for each incident
Answer : a
72) A local realestate agent refers their clients to a lender they have been working with frequently and receives a percentage of closing cost as a commission. Both realtor and lender are violating RESPA under which section of RESPA?
a) Section 11
b) Section 112
c) Section 8
d) Section 110
Answer : c
73) A borrower owns more than 25% of a business. Can his business tax returns be considered an income related documentation for borrower?
a) Yes, it is valid
b) No, it is not valid unless borrower has more than 30% ownership in business
c) This can be decided by lender on as needed basis
d) No, as business income tax is never a source of income
Answer : a
74) What documents does a self-employed borrower need to prove his employment and source of income?
a) Current business license, YTD profit and loss statement from accountant, balance sheets, tax returns for past two years
b) Current business license, YTD profit and loss statement from accountant, balance sheets
c) Current business license, YTD profit and loss statement from accountant
d) Current business license, balance sheets, tax returns for past two years
Answer : a
75) Which loan program supports 100% financing in rural communities?
a) FHA Loan
b) USDA Loan
c) Fixed Loan
d) Hybrid Loan
Answer : b
76) Which loan program supports 100% financing in farm areas?
a) FHA Loan
b) USDA Loan
c) Fixed Loan
d) Hybrid Loan
Answer : b
77) Which loan is a short-term cash out loan on the equity in the borowers current property that helps them close the purchase of a new transaction ?
a) Hybrid Loan
b) Reverse Loan
c) Conforming Loan
d) Bridge Loan
Answer : d
78) To be qualified and approved for USDA/Section 502 loan what is the maximum limit on area medium income aka AMI?
a) 120%
b) 115%
c) 110%
d) 112%
Answer : b
79) A mortgage lender if offering gift certificates for a store to its clients. If this violation of section 8 of RESPA?
a) Yes beacuse this is a gift certificate
b) Yes because anything of value is considered a violation
c) No because this is a gift certificate
d) It is determined on case by case basis
Answer : c
80) Which among the following properties need blanket policy that protects the structure in full?
a) singl-family home
b) Condominium
c) Commercial office
d) Trailer park
Answer : b
81) Which document shows the net worth of a person at a specific point in time including their assets and liabilities?
a) Net worth statement
b) Asset statement
c) mortgage statement
d) balance sheet
Answer : d
82) What is other name of SAFE Act enacted in 2008?
a) Title IV of Housing and Economic recovery act
b) Title V of Housing and Economic recovery act
c) Title VI of Housing and Economic recovery act
d) Title VII of Housing and Economic recovery act
Answer : b
83) Which loan requires a non-refundable lending fee at the time of closure?
a) VA Loan
b) FHA Loan
c) Fixed loan
d) USDA Loan
Answer : a
84) Does RESPA allow payment of nominal service fee for services rendered in mortgage loan origination process?
a) Yes, this is not a violation of RESPA
b) Mortgage loan process should always be free
c) It is decided by broker
d) No, it is always free
Answer : a
85) For state-licensed loan originators minimum of how much hours of approved pre-licensing is needed as per SAFE Act?
86) Which among the following is a voluntary specific lien that is placed with owner’s consent and applies to one specific property?
87) What is the other name of RESPA regulation?
88) Mortgage Servicing and Mortgage Abuses is taken care of by which Law?