RANDOM
The first step in the closing process is:
Funding!
An ARM is beginning its adjustment period and has a margin of 3.00% set at the start of the loan. The current index value is 2.50%. The caps on this ARM are set to 2% and 5% for periodic and lifetime, respectively. What is the highest value the margin can reach during this initial adjustment?
The answer is 3%. A margin value will never change once set on a loan. Therefore, this margin is set at 3.00% and will remain at 3.00% during each and every adjustment.
In addition to any authority allowed under state law, a state licensing agency must have the authority to:
The answer is conduct examinations and investigations. Under the S.A.F.E. Act, a state licensing agency must have the authority to conduct investigations and examinations of licensed loan originators and individuals required to have a loan originator license.
The GLB Act gives loan applicants the ability to opt out of the sharing of their nonpublic personal information with:
nonaffiliates of the creditor. Loan applicants may opt out of the sharing of their nonpublic personal information with nonaffiliates.
A balloon mortgage that includes a conditional refinance provision allows the borrower to:
request modification of the terms of the loan when it reaches maturity. A balloon mortgage that includes a conditional refinance provision allows the borrower to request modification of the terms of the loan when it reaches maturity.
The Telemarketing Sales Rule prohibits calls:
made to consumers who have specifically asked a mortgage professional not to contact them.
Lifetime rate caps are used in transactions for adjustable-rate mortgages to limit:
the amount by which an interest rate can change over the loan term.
An originator’s unique identifier must be shown on all but which of the following documents?
business signage. The unique identifier of any person originating a residential mortgage loan must be clearly shown on all residential mortgage loan application forms; solicitations or advertisements, including business cards or websites; and any other documents as established by rule, regulation, or order of the state licensing agency (MSL.210).
A lender is trying to lure customers with advertisements for “Minimum Monthly Payments to Meet Any Budget!” This advertisement must also include an equally prominent statement in close proximity which alerts consumers that:
The answer is a balloon payment may result from minimum periodic payments. The advertisement must include a statement that a balloon payment may result from minimum periodic payments.
In a title theory state, title to residential real estate is granted with a _____, naming the lender as the beneficiary of the trust, the borrower as the trustor, and the third party that holds the deed until the loan is fully paid as the _____.
deed of trust / trustee
What term describes the transfer of ownership of real estate from one owner to another?
conveyance. A conveyance is the transfer of ownership of real estate from one owner to another.
According to the federal guidances on nontraditional lending, all of the following loan programs are considered to be nontraditional, except:
Hybrid ARM. The term “nontraditional” primarily refers to payment structure or qualification documentation. In other words, traditional loans will include a payment structure that regularly decreases the principal balance and will require a borrower to prove that he/she can pay off the loan to qualify.
A _____ is an individual who, in exchange for a fee, allows his or her qualifying information to be used on an application for a loan he or she has no intention of repaying.
straw buyer. A straw buyer is an individual who, in exchange for a fee, allows his or her qualifying information to be used on an application for a loan he or she has no intention of repaying.
All of the following loans are covered by the requirements of the Home Mortgage Disclosure Act, except:
a loan for an RV which the borrower uses as his/her primary housing six months a year
A temporary loan used to finance the costs of building a home during construction is referred to as a(n):
construction loan
Under TILA guidelines, all of the following disclosures are provided for an adjustable-rate loan, except:
statement that the interest rate will be offered for the duration of the loan
A ten-year adjustable-rate mortgage has rate caps of 3/2/10 with an initial interest rate of 6% (2% margin + 4% index). Which of the following is true?
Blank information on an application:
may be a red flag for identity theft.
The acronym CHARM refers to which of the following?
A loan that allows the borrower to receive monthly payments rather than make monthly payments is:
reverse mortgage
When a mortgage or deed of trust contains a power of sale clause:
the lender may foreclose without first obtaining a court order
An adjustable-rate mortgage has a one-year introductory rate of 2.5%, after which the rate increases to the nominal rate of 4% (2% margin, 2% index) with annual rate adjustments. The loan provides for a 2.5% periodic interest rate cap. In year three, the index is 5%. What will the interest rate be in year three?
The answer is 6.5%. In year two, the rate adjusts from the low introductory 2.5% to 4%. A periodic cap of 2.5% will limit any further rate adjustments. In year three, the fully-indexed rate is calculated by adding together the index and margin (2% + 5% = 7%). However, this exceeds the amount permissible by the cap. Thus, the rate is limited to 6.5%.
To pay an appraiser based on whether a mortgage loan closes is:
When advertising nontraditional mortgages on the radio, television, or billboards:
providers should provide clear and balanced information about the risks of these products.
What is the maximum prepayment penalty which may be charged in the first year of the loan if the loan is considered a qualified mortgage?
2% of the outstanding balance