1.
An ARM is at the start rate of 3.75%. The index is currently 1.5% and the margin is 3.5%. The caps are 2/6 and the interest rate is at its first adjustment period. To what rate does the interest rate adjust?
1 out of 120
2.
Nathan Neuhaus wishes to own a newly-built home. He needs to secure financing along with a builder to build it. His best option would be to pursue a/an:
2 out of 120
3.
All of the following homeowner obligations would be found in a mortgage contract except:
3 out of 120
4.
A float agreement allows:
4 out of 120
5.
The FBI Mortgage Fraud Warning Notice cautions that:
5 out of 120
6.
Penny Producer receives two voicemails. The first is from an individual inquiring about a $35,000 mortgage. The second caller requests information about a $350,000 loan. Penny calls the callers back in the order in which the calls were received. A week later Penny’s manager is notified by a representative from the Federal Trade Commission that Penny passed a compliance check. The process by which federal regulators check on the behavior of mortgage loan originators is referred to as:
6 out of 120
7.
Collateralizing something while allowing the debtor to retain possession of that item is referred to as ...
7 out of 120
8.
Which of the following is an example of a standard ARM?
8 out of 120
9.
Under FACTA, which of the following is not a CRA obligation?
9 out of 120
10.
A state-licensed loan originator:
10 out of 120
11.
Which of the following documents must be issued in accordance with FACTA?
11 out of 120
12.
Your customer inquires about applying for a reverse mortgage. During the interview you learn that, although he is 64 years old, his girlfriend, who is also listed on the deed, is 26. What do you advise?
12 out of 120
13.
Which of the following is not a federal banking agency?
13 out of 120
14.
Which of the following constitutes a registered loan originator?
14 out of 120
15.
What is the primary purpose of title insurance?
15 out of 120
16.
Shady Deals decides to decline a mortgage application because the applicant, who happens to earn her income through public assistance, cannot demonstrate that she is going to continue receiving the income for at least 36 more months. The adverse action notice that Shady Deals sends to the applicant simply states that the reason for declining her application was, “Receipt of public assistance.” Which regulation, if any, did Shady Deals violate?
16 out of 120
17.
If a state licensing authority grants a license to an individual who it later learns committed a crime that would normally disqualify the individual from licensing, the state authority:
17 out of 120
18.
An applicant earns $575 bi-weekly. What is her annual income?
18 out of 120
19.
Appraiser Independence Requirements (AIR) state that lenders must:
19 out of 120
20.
Under FACTA, what must a financial institution do?
20 out of 120
21.
Which of the following constitutes a valid change of circumstance under TRID?
21 out of 120
22.
A disclosure is issued on Wednesday in response to a mortgage application taken by a bank on the previous Friday. Which disclosure was issued?
22 out of 120
23.
Which of the following individuals would not be required to possess a unique identifier?
23 out of 120
24.
All of the following are true concerning mortgage fraud except:
24 out of 120
25.
All of the following loans must contain a right to rescind except:
25 out of 120
26.
Honest Abe Lending retains secret shoppers to pose as customers to check on whether its loan originators remain compliant throughout the lending process. Honest Abe Lending is conducting:
26 out of 120
27.
What terminology requires an advertiser to disclose the fine print?
27 out of 120
28.
In a judicial foreclosure:
28 out of 120
30.
An originator uses the services of a contract processor who charges $500 per file. The fee disclosed to the borrower for processing is $800, the difference of which the originator keeps for himself ($300). This is:
30 out of 120
31.
If a construction worker earns $3,800 monthly, what is his weekly income?
31 out of 120
32.
The maximum LTV permitted through an FHA cash-out refinance is:
32 out of 120
33.
All, but which, are types of Qualified Mortgages?
33 out of 120
34.
What is the key difference between a lien theory state and a title theory state?
34 out of 120
35.
Which of the following would be prohibited by ECOA?
35 out of 120
36.
Of which of the following third-party service providers would a lender be prohibited from insisting on the specific use?
36 out of 120
37.
Fumbling Finance originates the purchase of a three-family primary residential property. Prior to closing, they issue one Closing Disclosure to the primary borrower. What regulation, if any, did Fumbling Finance violate?
37 out of 120
38.
Which of the following would constitute a red flag?
38 out of 120
39.
Which of the following fees is not considered when calculating the APR?
39 out of 120
40.
What is an "active duty" alert?
40 out of 120
41.
All but which of the following constitutes duties for which a mortgage license is not required?
41 out of 120
42.
A conventional mortgage balance is $275,437 and pays off on the twentieth calendar day of the month. Assuming that the current month's payment was credited on the first and the loan carries a per diem of $64.52, what is the loan's final payoff?
42 out of 120
44.
The SAFE Act creates standard guidelines for state legislation to regulate loan originators. In order to meet the standards established under the SAFE Act, state licensing laws must include all of the following except:
44 out of 120
45.
Which of the following is permitted as a result of a referral?
45 out of 120
46.
Which of the following is not a type of reverse mortgage?
46 out of 120
47.
When a credit report shows only a balance on a revolving debt and does not include a payment, the loan originator should:
47 out of 120
48.
All of the following are responsibilities of the closing agent except:
48 out of 120
49.
A right of rescission may be waived ...
49 out of 120
50.
A property’s purchase price is $456,000. The home appraises for $475,000. The loan amount is $315,000. What is the LTV?
50 out of 120
51.
What is the number appearing on the COE that indicates full VA entitlement?
51 out of 120
52.
A mortgage originator sends a thank-you note to a Realtor for referring a client. Who, if anyone, violated RESPA?
52 out of 120
53.
Which of the following is true regarding the funding of a refinance?
53 out of 120
54.
Which form of mortgage fraud results in much greater losses to the mortgage industry?
54 out of 120
55.
A title insurance company gives a computer to a mortgage broker. The computer is used to transmit electronic documents from the mortgage broker's office to the title insurance company. Who is in violation of RESPA?
55 out of 120
56.
A bridge loan must be repaid …
56 out of 120
57.
Which of the following would not constitute a red flag?
57 out of 120
58.
Which of the following would not be paid through a borrower's escrow account?
58 out of 120
59.
In the practice of warehouse lending, what is used to protect the lender against fraudulent activity?
59 out of 120
61.
What was the primary consideration for prohibiting loan originators from earning YSP as compensation?
61 out of 120
62.
When must a Victim's Notice of Rights be issued to a consumer?
62 out of 120
63.
The term encumbrance means:
63 out of 120
64.
Which of the following is not an event that triggers an automatic reissuance of the Closing Disclosure?
64 out of 120
65.
One primary purpose of securitization is:
65 out of 120
66.
A right to rescind may be waived in the presence of:
66 out of 120
67.
What is one of the primary defenses against fraud?
67 out of 120
69.
Which of the following is a consequence of exercising one’s right to rescind?
69 out of 120
70.
A Realtor calls an attorney and asks him to represent her client for free. In turn, the Realtor will refer other paying clients to that attorney. The attorney agrees. Who, if anyone, has violated RESPA?
70 out of 120
72.
An applicant earns $1,000 per month in social security disability. This income is untaxed. With what amount do you credit her?
72 out of 120
73.
Alan and his wife Raeghan are pursuing a cash-out refinance of their primary residential, three family property. Although they're not obligated to the debt, for estate-planning purposes, Alan's parents are both listed on the property's title. Who, if anyone, must be issued the right of rescission documents at settlement?
73 out of 120
74.
Of the following individuals, which one is exempt from licensure as an MLO?
74 out of 120
75.
In January, 2018, Wanda Whiner unsuccessfully lodged a CFPB complaint against Marvelous Mortgage alleging that they declined her mortgage application without appropriate cause. In March, 2019, Wanda called Marvelous Mortgage to reapply. Having heard all about the issue that occurred back in January, 2018, Marvelous Mortgage’s MLO Lenny Loanoriginator, desiring to avoid any potential issues, refused to work with Wanda referring her elsewhere. This time, Wanda’s complaint to the CFPB had merit. What regulation did Lenny violate by refusing to work with Wanda?
75 out of 120
76.
A home is purchased for the appraised value of $165,000. The customer puts down 10% on his conventional loan. How much more will the customer have to pay in principal for the PMI to be automatically removed assuming the loan remains consistently current?
76 out of 120
77.
According to RESPA Section 8, which is an acceptable reason for compensation?
77 out of 120
78.
A barista earns $1,750 per month at a coffee shop. She is paid bi-weekly and works a 40-hour work week. What is her bi-weekly rate of pay?
78 out of 120
79.
An ARM has a 4% start rate at its time for the first adjustment to be made. It has a periodic CAP of 1% and a lifetime CAP of 5%. Assuming worst-case scenario, what would the new rate be after the first adjustment?
79 out of 120
80.
A buyer pays $200,000 for a home and gets a fixed-rate loan from his lender at 5.75%. He puts $40,000 down. What is the LTV on this loan and does the buyer have to pay PMI?
80 out of 120
81.
At a mortgage closing, the settlement agent issues a single copy of the right of rescission to all parties. What is the rescission period?
81 out of 120
82.
An initial ARM rate that is less than three percent below FIAR is a/an:
82 out of 120
83.
A loan originator answers a telephone call from a potential client who requests financing on a property located in a state in which her company is licensed but she is not. What may she do?
83 out of 120
84.
The maximum LTV through FHA purchase financing is:
84 out of 120
85.
A customer applies for a loan amount of $250,000. What would his minimum down payment have to be in order to avoid PMI?
85 out of 120
86.
An ARM has a 6% start rate and is locked for three years. Its adjustment caps are set at 2/1/5. Assuming worst-case scenario, in what year would this loan reach its rate ceiling?
86 out of 120
87.
What is the borrower's total PITI if they borrow $250,000 at 6% interest on a 30-year fixed rate loan (the monthly payment factor is $600 for every $100,000 borrowed), their property taxes are $900 per quarter, their hazard insurance is $2,000 every six months and their mortgage insurance premium is $125 per month?
87 out of 120
88.
How could a home be sold when one of the owners is incarcerated?
88 out of 120
89.
Matthew wants to refinance his first mortgage but leave his HEQ alone. What must Matthew pursue?
89 out of 120
90.
An individual engages in the business of residential loan origination any time that s/he:
90 out of 120
91.
What is a possible consequence of a short sale?
91 out of 120
92.
All but which of the following is a net tangible benefit that justifies refinancing?
92 out of 120
93.
Sally Sprystep is a 63-year-old widow with significant equity in her home. She needs to finance some minor home repairs and supplement her social security to pay her bills. What type of loan might be her best option?
93 out of 120
94.
For what does the NMLS stand?
94 out of 120
95.
Referring to an adjustable interest rate as fixed in an advertisement violates which regulation?
95 out of 120
96.
Which loan(s) require(s) the issuance of the Homeownership Counseling Disclosure?
96 out of 120
98.
When considering insurance, all of the following are included in the PITI except:
98 out of 120
99.
At Sally and Jason's primary residential refinance settlement on June 25, 2024, Tumultuous Title issued one copy of the RoR document to each of them. What happens next?
99 out of 120
100.
What is the maximum fine that a State Commissioner may issue?
100 out of 120
101.
A title search typically involves each of the following except:
101 out of 120
103.
For which of the following reasons would it be permissible to refuse to take an application from a potential borrower?
103 out of 120
104.
Which of the following is not a part of mortgage licensee background checks?
104 out of 120
105.
Your mortgage applicant presents a picture ID at the time of application that does not closely resemble him. What action, if any, must you take?
105 out of 120
106.
Nontraditional credit includes all of the following except:
106 out of 120
107.
A lien on real property, documented by a signed mortgage contract, gives the lender the right to:
107 out of 120
108.
A mortgage processor realizes that an applicant has provided duplicate copies of his paystub. Not needing them, she disposes of the duplicates in her standard trash receptacle. What regulation did she violate?
108 out of 120
109.
Which of the following escrow overages would a mortgage servicer be permitted to retain in a borrower's escrow account upon performing the annual escrow analysis?
109 out of 120
110.
What constitutes a "covered account" as referenced under the FTC's Red Flags Rule?
110 out of 120
111.
Which of the following statements is considered permissible when communicating with an appraiser?
111 out of 120
112.
According to fair lending laws, age may be considered a factor in denying a loan application if:
112 out of 120
113.
Francis Formerrenter is closing on the purchase of her first single-family home which she intends to use as her primary residence. If the closing occurs on a Monday, on what day does her right of rescission end?
113 out of 120
114.
An option loan affords all but which of the following four payment options:
114 out of 120
115.
When is it allowable for an originator to provide a real estate agent with a $50 gift card in exchange for a referral?
115 out of 120
116.
A mortgage lender spends $75.50 on a credit report for which it charges the applicant $125.00. To what does this refer and what regulation, if any, does it violate?
116 out of 120
117.
A lender must absolutely remove PMI from any standard conventional loan:
117 out of 120
118.
When you divide PITI by the amount of a borrower’s monthly gross income, you are calculating the:
118 out of 120
119.
A firefighter earns $56.00 per hour plus a 7% shift differential. What is her hourly rate of pay?
119 out of 120
120.
A 21-year old applicant presents a 401(k) statement reflecting an available balance of $75,000. During the application, he discloses a $15,000 loan against the 401(k) that he finalized after the presented statement’s issuance. At what value do you reflect the 401(k)?
120 out of 120
