1.
A banker opens a checking account for a customer and fails to give her an opt out notice and the bank's privacy policy but mails it to her a week later. What regulation, if any, did the banker violate?
1 out of 120
2.
Crafty Curt sells timeshares over the phone. One of the reasons why Curt is so successful at reaching potential customers is because, when he first attempts to contact someone, he identifies himself as an attorney calling about an inheritance owed to the prospective customer. Once he has the call recipient’s attention, Curt confesses that, although he is not delivering an inheritance, owning a timeshare can make anyone feel like a millionaire! What regulation does this tactic violate?
2 out of 120
3.
All of the following must be retained for no less than 24 months from the date of a company’s cessation of telemarketing activities except:
3 out of 120
4.
The document used to secure a copy of an individual's IRS federal tax return transcript is the:
4 out of 120
5.
Over which of the following reasons can an MLO not refuse to take an application?
5 out of 120
6.
A loan originator holds a free seminar for Realtors to educate them about a new mortgage product. At the seminar, lunch is served. The loan originator and Realtors do not promote their own business agendas. Which of the following regulations was violated?
6 out of 120
7.
Don has a 3/1 ARM with 26 years remaining. After receiving a substantial inheritance, he desires to remit a principal pre-payment so that his mortgage pays off in 10 years. He asks you for the amount that he must remit to accomplish this. How do you respond?
7 out of 120
8.
The 4506 authorizes a financial institution to secure:
8 out of 120
9.
Larry Landlordtobe wants to purchase a three-family property in which he would live while renting out the other two units. Which appraisal form will the appraiser use to appraise this dwelling?
9 out of 120
10.
All but which of the following should be detected through a company’s Identity Theft Prevention Program:
10 out of 120
11.
A warning on anyone’s credit report requiring extra steps to confirm the applicant’s identity is known as a/an:
11 out of 120
12.
What regulation is compromised when an advertisement promotes a 3/1 ARM as containing a "fixed" interest rate with no clarification that the "fixed" term is only for the first three years?
12 out of 120
13.
A borrower has a mortgage with an outstanding balance of $145,610, with no outstanding fees, and is at an interest rate of 5.125%. If the amount needed to pay the loan in full is $145,793.96, on what day of the month will this loan pay in full?
13 out of 120
14.
The most common type of fraud is …
14 out of 120
15.
Jose just turned 62 and needs to restructure his finances now that he’s on a fixed income. His property is worth well over $800,000 and he only owes $25,500 on his original mortgage. There are no other liens on his property. He needs to minimize his monthly expenses and restructuring the financing of his home seems to be the best option to accomplish what he needs to accomplish. Which mortgage would you recommend to Jose?
15 out of 120
16.
Another term for the Initial Escrow Statement is the:
16 out of 120
17.
If together a borrower’s first mortgage of $75,850 and her $83,200 home equity loan have a CLTV of 78%, what is her property’s value?
17 out of 120
19.
Lisa Lucky suddenly learns of an outstanding tax lien that was filed against the title of her property three-and-a-half years prior to her buying it. Lisa remains calm knowing that, at her mortgage closing, she purchased a/an:
19 out of 120
20.
An applicant objects to presenting a loan originator with photo identification during a face-to-face mortgage application. After the loan originator explains that positive identification is required, the applicant fumbles through her purse and claims to be unable to find her ID. The loan originator spots a driver’s license in her purse despite the applicant insisting that there is no ID in her purse. What should the loan originator do?
20 out of 120
21.
An individual who appears at a closing pretending to purchase the home for primary residential use may be considered:
21 out of 120
22.
Which of the following is not a part of state supervisory authority?
22 out of 120
23.
Which of the following constitutes a violation of the Mortgage Acts and Practices (MAPS) Rule?
23 out of 120
24.
Sally’s ARM adjusts to a rate of 5.75%. If the margin is 2.125%, what is the index at the time that the new rate is calculated?
24 out of 120
25.
Being self-employed, Jack’s accountant legitimately maximized his deductions to minimize his tax liability. In doing so, however, Jack’s reported income was much lower than what he actually earned and less than what he would need to qualify for a mortgage. If Jack is unable to find a lender who will originate a no-ratio loan, Jack will not be able to secure mortgage financing. For what type of mortgage should Jack ask when calling various lenders?
25 out of 120
27.
The maximum allowable seller concessions when conventionally financing the purchase of an investment property is:
27 out of 120
28.
A customer applies for a closed-end ARM. Which of the following must be issued to her within three business days?
28 out of 120
29.
A conventional loan that is underwritten using standard conventional underwriting parameters even though the loan exceeds conventional conforming loan limits is known as a:
29 out of 120
30.
If a borrower earns an hourly rate of $50 for working 40 hours per week, how much is his monthly income if he also earns $750 in monthly child support for his 20-year-old daughter that is ordered by the courts through her 21st birthday and $450 from an annuity with a remaining balance of $11,700?
30 out of 120
31.
John accesses his customer’s credit report containing multiple negative reportings all of which his borrower claims to be erroneous. Consequently, the borrower’s credit score is significantly lower than the minimum credit score required for the product that the customer desires. What recourse, if any, does John and the borrower have?
31 out of 120
32.
What is the minimum credit score that an FHA loan will insure?
32 out of 120
34.
Assuming the existence of a permissible purpose, which of the following constitutes permission to order someone's credit report?
34 out of 120
35.
Whole life insurance policies contain:
35 out of 120
36.
If Sally Pastashredder shreds pasta for a bi-weekly salary of $1,753, how much does she earn monthly?
36 out of 120
37.
A borrower is refinancing their single-family, primary residence. Their current balance is $254,655 and their current interest rate is 6.25%. There are no other fees outstanding on their current mortgage. If the refinance closes on Monday the 3rd, what amount will be needed to pay this loan in full?
37 out of 120
38.
Your borrower is considering an interest-only mortgage. She asks you how the interest only loan will affect the tax deductibility of her mortgage interest. You respond by advising her that:
38 out of 120
39.
The APR of Jonas’ first-lien, primary-residential, conventional-conforming loan on the day of its origination was 4.875%. On that date, the APOR was 3.125%. Jonas desires to pay his own real estate taxes and insurance so he plans on making a 20% down payment. What must you tell Jonas?
39 out of 120
40.
Mortgage licenses are issued by:
40 out of 120
41.
When originating a construction-to-permanent loan, an accurate understanding of the construction timeframe is critical when:
41 out of 120
42.
In what year was the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted?
42 out of 120
43.
A borrower is paying off his mortgage in fifteen days. His balance is $41,680 and his interest rate is 8.625%. His mortgage servicer has received and credited his payment owed for the current month. In addition to his current mortgage balance, this borrower owes $1,515 in outstanding fees and late charges and his escrow account is overdrawn by $1,300. How much will this borrower need to satisfy his mortgage in full?
43 out of 120
44.
Which of the following is not an example of a prepaid?
44 out of 120
46.
Ernesto has a jumbo loan containing PMI. His home’s original purchase price and property value was $615,000. Assuming that he does not realize that he may petition his lender for the PMI’s removal, at what loan balance should his loan servicer automatically remove his PMI assuming that his loan is current?
46 out of 120
47.
Bobbie applies for a mortgage to buy his new home. Although his down payment is 40%, his back-end DTI ratio exceeds 51% and his credit score is 615. By approving his loan application, his lender is providing Bobbie with:
47 out of 120
48.
Violations of the Red Flags Rule fall under the enforcement of the:
48 out of 120
49.
What was the term once used for the loan proceeds mortgage originators sometimes retained as compensation by charging an interest rate higher than par?
49 out of 120
50.
Michelle's mortgage payment is due on the 1st of each month. Her loan's terms contain a stipulation that a late charge will only be assessed if her payment is still outstanding by the 16th of the month. On Thursday the 31st, Payment Processor Penny receives Michelle's payment. Unfortunately, Penny does not have time to process it before leaving work that day. Over the weekend Penny gets sick and doesn't return to work until the Wednesday the 6th. As of what date will Michelle's payment reflect as having been received?
50 out of 120
51.
Which of the following professionals may act in the capacity of an MLO, a processor, and an underwriter?
51 out of 120
52.
Which of the following does not constitute a required standard of state licensing laws?
52 out of 120
53.
What were the primary overseers of mortgage industry reform?
53 out of 120
54.
When originating a VA mortgage, $36,000 represents:
54 out of 120
55.
Chuck is an honorably-discharged Navy Seal who has 4% to spend towards the down payment of a single-family investment property that he desires to purchase. His back-end DTI ratio is 43% and his representative credit score is 635. What mortgage program might be his best option?
55 out of 120
56.
Lit and Fire Mortgage Servicing receives a customer correspondence on Tuesday, August 27th complaining that, although their monthly mortgage payment's check cleared, their mortgage account does not reflect the payment as having been made. By when must Lit and Fire respond to this customer?
56 out of 120
57.
In conducting an examination or investigation, a state licensing agency may not:
57 out of 120
58.
Sally is finally pursuing her dream of buying a primary residential property containing a retail space in which she can open a deli and catering business. During her search, Sally discovers a beautiful, three-family property containing a store front. Sally plans to live in one of the units, rent the other two out, and open her business in the retail space. The dwelling’s total square footage is 2,350 with each living unit measuring 400 square feet and the commercial space measuring 1,150. Which of the following loan programs best meets her needs?
58 out of 120
59.
Evil Evan is attempting to raise the funds needed to purchase firearms and explosive devices in order to overthrow New Jersey. To do so, Evil Evan meets with loan officer Perceptive Pete to request a refinance of his primary residence. Evan’s home is currently lien free and he seeks a mortgage of 85% LTV. When Pete asks Evan for the purpose of the cash-out refinance, Evan provides an evasive response that arouses Pete’s suspicions. After Pete brings his suspicions to his manager, an investigation ensues, and Evan is ultimately arrested. What purpose of the Patriot Act did Evil Evan’s attempt to refinance his home meet?
59 out of 120
60.
Which of the following conditions would have to be resolved prior to closing a mortgage?
60 out of 120
61.
What is the minimum amount of time an individual may be self-employed in order for his self-employed income to be considered?
61 out of 120
63.
Which of the following would constitute an asset unable to be considered for credit qualification?
63 out of 120
64.
An individual who falsely represents his authority to sell a home is known as:
64 out of 120
65.
We Cheatum Good Mortgage Company recently had a claim paid against its surety bond. What happens now?
65 out of 120
66.
Jessie has a conventional-conforming loan. At what LTV can she request the deletion of her escrow account?
66 out of 120
67.
All but which of the following does HUD recommend considering when examining an AFBA for legitimacy?
67 out of 120
68.
The MLO's surety bond is covered by ...
68 out of 120
69.
A customer falsely representing his income is an example of:
69 out of 120
70.
Section X of the Dodd Frank Act is responsible for ...
70 out of 120
71.
Your borrower applies to purchase a new home through FHA financing and desires to make the minimum allowable down payment. His DTI ratios are 27/30, his employment is stable, and his credit score is 576. What would be the amount of his minimum allowable down payment?
71 out of 120
72.
A settlement company hosts a holiday party and invites all of the mortgage originators with whom it worked during the previous year. Drinks are served through a cash bar and food is also sold at cost. Who violated RESPA?
72 out of 120
73.
Sally is a loan originator at Catchemquik Mortgage Financing. One morning Sally meets with a newly-married couple who are desperately trying to finance their first home. Sally notices that the pay stubs that her applicants provide appear to be doctored and falsified. After completing the application, her clients leave her office, at which time Sally completes a SAR to alert her company and the authorities of the suspected fraud. What must Sally do now?
73 out of 120
74.
Which of the following may not be considered when evaluating an applicant for loan approval?
74 out of 120
75.
One of the best ways to avoid mortgage fraud is by applying:
75 out of 120
76.
The most costly type of fraud is …
76 out of 120
77.
A home inspection company hosts a dinner for a mortgage bank. In turn, the mortgage bank agrees to refer customers to the home inspection company. Who violated RESPA?
77 out of 120
78.
Bella has 5% of her desired home’s purchase price. Since Bella is adamant about not paying PMI, she instructs her loan originator to pursue piggyback financing. In doing so, her loan originator will have to arrange for:
78 out of 120
79.
All but which of the following is considered to be public, personal information?
79 out of 120
80.
A reverse mortgage type that allows the lender to employ its own parameters is referred to as a:
80 out of 120
81.
Which of the following would constitute a violation of the Red Flags Rule?
81 out of 120
82.
Through which of the following is a state able to conduct background checks on mortgage license applicants?
82 out of 120
83.
George is a loan originator with a local lender who is meeting with a customer to discuss a first-time home purchase. In pre-qualifying his borrower, George accesses the applicant’s credit profile on which he observes an active duty alert. What should George do next?
83 out of 120
84.
Deputy Dennis works the night shift at the local police department for which he earns an hourly rate of $42.50 plus a 10% shift differential. Assuming that he works and is paid for a standard 40-hour work week, what is his monthly income?
84 out of 120
85.
Buyers are more likely to secure seller’s concessions during:
85 out of 120
86.
Giorgio purchases a new home incentivized by the sellers through a 2/1 buydown. His mortgage’s fixed note rate is 5% with a corresponding P&I payment of $645.22. Had his mortgage’s interest rate been 4%, his P&I payment would have been $529.58 and, at 3%, it would have been $454.17. How much overall money will Giorgio save as a result of the 2/1 buydown over his loan’s first two years?
86 out of 120
87.
Ida has been hired to call a mortgage company’s current customers to promote optional credit life insurance. She reports to work at her Hartford, CT. office on Monday at 8:30 a.m. and immediately places her first call to a current customer living in Federal Way, WA.. What, if anything, did Ida do wrong?
87 out of 120
88.
The MDIA amendment to TILA established the requirement for lenders to ensure that the disclosures that they issue are understandable to the average lay person in addition to ...
88 out of 120
89.
To which of the following loan scenarios does the Dodd Frank Act’s Ability-to-Repay (ATR) considerations apply?
89 out of 120
90.
All of the following constitute concerns of certain adjustable-rate mortgages except:
90 out of 120
91.
RESPA's Homeownership Counseling Disclosure must be issued along with which of the following ...
91 out of 120
92.
Julie settles on her primary residential refinance after which she exercises her right to rescind. How long does the lender have to refund Julie's appraisal and credit report fees?
92 out of 120
93.
Under the E-Sign Act, a company that issues and manages documentation electronically must first secure the consumer’s consent to utilize electronic documentation. Prior to securing the consumer’s consent, the organization must inform the consumer:
93 out of 120
94.
The most common type of fraud for housing is …
94 out of 120
95.
A property is valued at $395,000. There is a first and a second mortgage with a 60% CLTV. The second mortgage has a 12% LTV. What is the balance of the first mortgage?
95 out of 120
96.
Which of the following is a violation of Reg C?
96 out of 120
97.
The total payment amount is referred to as:
97 out of 120
98.
An individual commits fraud which ultimately results in a financial institution electronically transferring funds into his checking account. In addition to the actual fraud, with what other crime could this individual be charged with committing?
98 out of 120
99.
All but which of the following documents is an informational disclosure?
99 out of 120
100.
Betty has a home equity line of credit (HELOC) with an outstanding balance of $25,550. Her HELOC is approaching its tenth year. What can Betty expect to happen once her HELOC concludes its tenth year?
100 out of 120
101.
From whom must an MLO take an application?
101 out of 120
102.
Which of the following mortgage types requires the customer to undergo independent, third-party, homeownership counseling?
102 out of 120
104.
Committing fraud pertaining to a federally-guaranteed or insured loan may result in a penalty of:
104 out of 120
105.
Under 12 USC § 5114, which of the following is any state licensing authority permitted to investigate and examine?
105 out of 120
106.
Under 12 USC § 5114(2), (4), licensed loan originators:
106 out of 120
107.
A property with a value of $410,000 has a first mortgage along with a HELOC. The LTV of the first mortgage is 65%, the HELOC has a $22,500 outstanding balance, and the TLTV is 88%. What is the line amount of the HELOC?
107 out of 120
108.
Scenarios when a telemarketing or sales call is allowed to be placed without first screening the number through the Do Not Call Registry consist of all of the following except:
108 out of 120
109.
According to the Statement on Subprime Lending, “loan flipping” is:
109 out of 120
110.
Sherry Shortcut is processing a purchase loan that’s scheduled to close first thing tomorrow morning. At 4:30 p.m., she realizes that, due to the cost of several settlement services being higher than anticipated (corresponding with no valid change of circumstance), the loan’s APR is 0.375% higher than the APR disclosed on the applicant’s Closing Disclosure. How must Sherry respond?
110 out of 120
111.
A borrower desires to purchase a home for $375,000, finance it through FHA, and make the minimum down payment. What is his total loan amount assuming that he finances his UFMIP?
111 out of 120
112.
A mortgage company closes a loan and provides the borrower with its privacy policy at the closing. How long must it allow the borrower to opt out of information sharing before it shares her information in accordance with its privacy policy?
112 out of 120
113.
In the presence of non-traditional income, which of the following is not needed?
113 out of 120
115.
Which of the following may be an indication of fraud?
115 out of 120
116.
A property with a value of $412,000 has a first mortgage along with a HELOC. The LTV of the first mortgage is 70%. The TLTV is 90% and the HELOC has an outstanding balance of $32,500. How much available credit is left on the HELOC?
116 out of 120
117.
Two applicants apply for a loan together. One of the applicant’s credit scores are 617, 683, and 612. His co-applicant’s credit scores are 784, 690, and 693. What is the score that the lender uses to underwrite the loan?
117 out of 120
118.
Betty and Jason are buying their first home together and they’re financing it with a 30-year, fixed-rate, conventional loan. Since their down payment is less than 20%, they are required to pay PMI. Which of the following documents are they required to be issued at the closing table?
118 out of 120
119.
Which of the following is not one of the three standard appraisal approaches?
119 out of 120
120.
Under confidentiality considerations, to whom may the NMLS share licensee information with which it was provided?
120 out of 120
