NMLS 5

Forms/Employment

100

What is a 1003

a loan application

200

What is a 1007

appraisal for investment properties

300

What is a 4506

Request for Copy of Tax Return is filed by taxpayers to request exact copies of one or more previously filed tax returns and tax information from the Internal Revenue Service (IRS).

400

What is a schedule C

An individual who owns a business as a sole proprietor, when applying for a mortgage loan, would submit IRS Schedule C. The individual's income is the net income shown on the Schedule C plus any recurring capital gains or non-cash expenses (e.g., depletion, depreciation) that were deducted in arriving at the adjusted income

500

If I'm self employed vs. making commission and a salary. What tax forms do I have?

1009 vs. W2

Hypotheticals

100

I'm claiming social security as income. How much can that be grossed up to?

• Social security grossed up to 25%

200

I'm claiming Capital Gains as income. What average is factored in on capital gains? (think length of time)

Capital gains must be averaged over 2 years to claim

300

In terms of loan underwriting, which of the following is true concerning self-employment income?

1. A self-employed loan applicant must provide proof of having liquid funds to cover at least six months’ worth of mortgage payments
2. The self-employed applicant must provide proof that he or she has received income sufficient to qualify for the loan on a consistent basis for at least five years
3. Self-employment income may be averaged over the two-year period prior to loan application
4. While untaxed commission income may be grossed up by 25%, income received as a result of self-employment may not

 

self-employment income may be averaged over the two-year period prior to loan application

400

I'm an independent contractor in Montana and I'm talking to customers about their mortgage and locking in my rates. Would I need to take the NLMS?

If I'm an independent contractor working in underwriting, do I need to get my NMLS?

yes

no

500

 A registered MLO is an individual who works under the authority of any of the following except:

A. A mortgage brokerage company under the authority of the DRE
B. A depository institution
C. An institution regulated by the Farm Credit Administration
D. A subsidiary of a depository institution regulated by a Federal banking agency

A mortgage brokerage company under the authority of the DRE

Federal Laws

100

Tell me about the Right to Recission 

• Right of Rescission (Refi/HELOC primary residence)

• 
  

  • 3 days after closing/ midnight on 3rd day 

  • 
    

    • Only need 1 bwr to rescind, all receive 2 copies

    • Lender will issue refund in 20 days

  • If no disclosure is provided by lender, bwr has up to 3 years to rescind from consummation 

200

What is the 3/7/3 Rule

3/7/3 rule

• 3- LE received 3 days of submitting application

• 7- LE must be received 7 days before consummation

• 
  

  • Waived on a bona fide personal emergency

  • Collection of fee for LE: ONLY CREDIT REPORT

  • LE Valid for 10 days 

• 3- CD must be give before and at consummation 

• 
  

  • Revision: apr, loan product or prepayment penalty

** revised LE within 3 days of receipt of new info but not on or after CD and not later than 4 days prior to closing 

300

What is the Bank Secrecy Act? 

• Anti money laundry program 

400

Tell me about the Do Not Call Act

• 31 Days- Updating DNC list

• 3 months (90 days)- if consumer made an inquiry into a business

• 18 months- if consumer made a transaction with a business

• 8 am-9 pm - calls must fall between 

• $43,280 per call 

500

Name all the regulations below:

- Reg C

• Reg B

• Reg Z

• Reg X

• Reg P

• Reg N

• Reg G and H

• Reg V

• MDI

• Reg C- HMDA

• Reg B- ECOA

• Reg Z- TILA

• Reg X- Respa 

• Reg P- GLB Act

• Reg N- MAP

• Reg G and H- Safe (secure and financial)

• Reg V- FCRA

• MDI- Mortgage Disclosure Act

Loan Products

100

What are the ratios for Conventional 

• 28% Front End 

• 36% Back End 

200

Tell me qualifications of an FHA loan

• UFMIP

• 
  

  • 1.75% of base loan

• Term length depends on length of mortgage (less than 15years or not)

• Credit Score 

• 
  

  • 580 +

  • 500-579 = loan up to 90% LTV

• Income Requirements

• 
  

  • 31% Front End 

  • 43% Back End 

• Down payment= 3.5% 

• Seller Contributions= up to 6% of sale price
  
  

300

Tell me about VA Loans

• Income Requirements

• 
  

  • Back End DTI: 41% residual income

• Entitlement

• 
  

  • 25% of loan amount 

• Loan with no down payment up to $500,410 

• Funding Fee= 2.3%

400

What types of loans carry PMI?

Conventional 

500

What is a HECM

• HECM- FHA version of reverse mortgage

• 
  

  • 62+ age

  • Needs to live in the property for 12 months!!!

  • Single purpose- cheapest Reverse Mortgage

Random

100

Tell me what you know about flood insurance

• 100% of replacement cost or unpaid balance of loan

• $100k minimum for flood insurance

• $250k maximum for flood insurance 

• Special flood hazard area

  • Has a 1% chance of a flood

• High risk flood zones:

  • A and V

200

What is the difference between a Licensed MLO and a Registered MLO

Registered- works at a fiduciary or depository 

Licensed- has to take the nmls, 20 hours of safe 

300

According to RESPA, a lender making a loan with escrow included is able to collect a maximum cushion of how many months at closing?

two months

400

If the final APR on a fixed rate loan deviates from the initial APR shown on the closing disclosure by more than ________, an additional waiting period is triggered before the loan can close.

1/8 percent

500

3) The Nationwide Mortgage Licensing System & Registry (NMLS) was begun by which of the following organizations:
A. CSBS
B. HUD
C. AARMR
D. Both "A" and "C"

CSBS and AARMR