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100

According to the Truth-in-Lending Act, a variation up to what amount is permitted for the annual percentage rate in a regular fixed-rate mortgage transaction as quoted in the Loan Estimate?

  1. 1%
  2. .5%
  3. .125%
  4. .25%

.125%

100

Which of the following situations is least likely to be fraudulent?

  1. A borrower claims to make $250,000 per year, but owns almost no personal property
  2. A borrower lists "CPA" as his job title, but has no schooling
  3. A borrower claims to make $250,000 per year, but has very little debt
  4. A borrower has six children but is buying a two-bedroom condominium
  • A borrower claims to make $250,000 per year, but has very little debt
100

A borrower is refinancing an investment property. The borrower originally purchased the home as a primary residence, but the property is now used as an investment property. The borrower's business partner is also a signer on the loan and a title holder. Who must receive the property rescission notice?

  1. Tenant only
  2. Both borrowers
  3. The tenant and primary borrower
  4. No rescission notice is required

No rescission required on an investment property

100

An applicant for a loan originator license cannot have been convicted of any felony within what period of time prior to applying for the license?

  1. Two years
  2. Seven years
  3. Three years
  4. Five years

Seven

100

Which of the following affects the index rate in an adjustable-rate mortgage?

  1. Market conditions
  2. Lender's decision
  3. Borrower's payment history
  4. Margin

Market Conditions 

200

Tell me Section breakdowns of RESPA

Section 6- Mortgage Servicing

Section 8- Kickbacks and referrals

Section 9- Title

Section 10- Escrow

200

Safina Marigold, a mortgage loan originator, has received a request for an offer of residential mortgage loan terms together with information about the prospective borrower that will be necessary for her to make a decision on whether or not to offer a loan. Safina has received a(n):

  1. Credit report
  2. Appraisal
  3. Solicitation
  4. Application

application

200

According to the Homeowners Protection Act, what is the earliest point at which PMI can be terminated?

  1. When the loan reaches 80% loan-to-value, the borrower is in good standing, and submits a written cancellation request
  2. After at least two years, if the borrower is in good standing and submits a written cancellation request
  3. When the loan reaches 78% loan-to-value or at least five years after closing, whichever occurs first
  4. When the loan reaches 80% loan-to-value, PMI is automatically terminated
  • When the loan reaches 80% loan-to-value, the borrower is in good standing, and submits a written cancellation request
200

At the same time that he obtains his first mortgage loan, a homebuyer obtains a second closed-end mortgage loan in order to cover part of his down payment. This second loan is:

  1. A primary mortgage loan
  2. A subprime loan
  3. A simultaneous loan
  4. A home equity line of credit

Simultaneous Loan

200

A borrower obtains a mortgage for $500,000 at 6.0%. If the borrower makes a payment of $2,500 for each of the first three months, what is the principal balance at the end of the third month?

  1. $499,322.48
  2. $500,000.00
  3. $499,557.24
  4. $498,524.24

$500,000

500,000 x.06= 30,000/12= $2,500


300

In the Loan Estimate, fees related to recording and to third-party service providers the borrower can shop for are grouped together and subject to:

  1. No tolerance limitation
  2. 10% tolerance
  3. 15% tolerance
  4. Zero tolerance

10% 

300

When may a mortgage loan originator give preferential treatment to a borrower?

  1. Any time
  2. Never
  3. Never, unless the borrower is a member of a minority race
  4. At any time, as long as it is not based on a class covered by the Equal Credit Opportunity Act
  • At any time, as long as it is not based on a class covered by the Equal Credit Opportunity Act
300

Which of the following is most likely to issue a rule regarding TILA enforcement?

  1. State regulator
  2. CFPB
  3. HUD
  4. Congress

CFPB

300

Which of the following documents is most likely to disclose the amount of a prepayment penalty?

  1. Closing Disclosure
  2. Loan Estimate
  3. HUD-1 Settlement Statement
  4. The Loan Estimate and the Closing Disclosure
  • The Loan Estimate and the Closing Disclosure
300

A borrower obtains a first mortgage for $160,000 and a second mortgage HELOC for $40,000. However, the lender only allows the borrower to draw $30,000 from the HELOC at the time of closing. If the purchase price and appraised value are $200,000, what is the HLTV (aka HCLTV or HTLTV)?

  1. 90%
  2. 100%
  3. 95%
  4. 80%

100%

400

Under the PATRIOT Act, covered entities must have a CIP, which stands for:

  1. Customer Identification Program
  2. Consumer Identification Protocol
  3. Corrected Information Protocol
  4. Correspondent Information Program
  • Customer Identification Program
400

Why would a lender have a problem with double contracts?

  1. Relevant information is being kept from the lender
  2. Appraisals are difficult with two contracts
  3. It is unclear which purchase price should be used when calculating the LTV
  4. Lenders do not allow seller financing

Relevant information is being kept from the lender

400

Which of the following is true regarding a borrower's ability to qualify for FHA financing if their credit score is 560?

  1. they are not eligible for FHA financing
  2. they are eligible for FHA financing up to 85% LTV
  3. they are eligible for FHA financing up to 96.5% LTV
  4. they are eligible for FHA financing up to 90% LTV

4. they are eligible for FHA financing up to 90% LTV

400

Which of the following transactions would involve monthly mortgage insurance?

  1. VA 100% mortgage
  2. Conventional 80/15/5
  3. Conventional loan with 20% down
  4. FHA 30-year mortgage with 25% down

FHA 30-year mortgage with 25% down

400

George is hoping she will be able to qualify for her home.Her Back End DTI is 85%.  Right now she is making $6,100  a month and paying an auto loan of $400 a month plus is paying alimony payments of $250 a month. What is George’s PITI?

X = PITI

Step 1:

X + 400+250/ $6100= 85%

Step 2:

 X + 400+250= 6100 x .85

Step 3:

X + 650 = 5185

Step 4:

x= 5185 - 650

x = $4,535

500

Under the Financial Privacy Rule of the Gramm-Leach-Bliley Act, a customer of Big Box Bank is entitled to a privacy notice:

  1. At the time he or she obtains a financial product from the bank and annually thereafter
  2. At any time the bank provides non-public personal information to a non-affiliated third party
  3. Every six months
  4. Annually
  • At the time he or she obtains a financial product from the bank and annually thereafter
500

All of the following are red flags that broker-facilitated fraud is likely to occur or is occurring, except:

  1. The lender is not provided with original documents within a reasonable time
  2. Numerous applications from a particular loan originator have unique similarities
  3. A sharp decrease in the overall volume of loans processed by a particular loan originator during a short time period
  4. An unusually-high volume of loans with maximum loan-to-value limits from one loan originator
  1. A sharp decrease in the overall volume of loans processed by a particular loan originator during a short time period
500

Name the ratios for the following:

- USDA

- VA

- FHA

- Conventional

Conventional 28/36 (CONFORMING) 

● FHA 31/43 

● VA 41 

● USDA 29/41 

500

Name what defines a qualified mortgage

Provides for a substantial equal monthly payments that DOES NOT negatively amortize, allow deferral of principal or result in a balloon payment 

● It has a loan term no more than 30 years 

● Its points and fees do not exceed 3% of the loan amount 

● DTI must be less than or equal to 43%

500

A borrower is purchasing a home for $650,000.  They are approved for an 80% loan and expect to pay closing costs equaling 2% of the loan amount. The borrower has already contributed $5,000 of their 20% down payment. How much will the borrower need to bring to closing?

  1. $135,400

  2. $135,000

  3. $125,000

  4. $140,400

The answer is $135,400.

 The borrower would need to bring $135,400 to closing. At 80% of the purchase price, the loan amount is $520,000. The borrower is making a 20% down payment, equal to $130,000 (20% x $650,000 = $130,000). Of this amount, the borrower has already paid $5,000, leaving a remaining down payment of $125,000. Closing costs equaling 2% of the loan amount total $10,400 (2% x $520,000 = $10,400). Adding this to the remaining down payment totals $135,400