1. How many business days after a mortgage loan application does a loan officer have to mail disclosures to the borrower?

Transcription

1 Course: Lesson: National Mortgage Loan Originator Review Crammer (ml) Federal Mortgage-Related Laws 1. How many business days after a mortgage loan application does a loan officer have to mail disclosures to the borrower? A. four B. three C. two D. one 2. Laura s name is on the National Do Not Call Registry. At what point after she closes a loan with ABC Mortgage must ABC stop contacting her? A. immediately B. after three months C. after one year D. after 18 months 3. How many hours of annual continuing education are required by the SAFE Act for loan originators? A. 5 B. 8 C. 12 D HMDA stands for A. Home Mortgage Disclosure Act. B. Home Mortgage Discovery Act. C. Homeowners Mortgage Discovery Act. D. Household Mortgage Disclosure Act. 5. What government agency oversees TILA? A. Congress

2 B. Federal Reserve Board C. Federal Trade Commission Course: Lesson: D. HUD National Mortgage Loan Originator Review Crammer (ml) Federal Mortgage-Related Laws 6. What loan type is NOT included in the Home Mortgage Disclosure Act? A. owner-occupied refinances B. purchase of existing housing C. second mortgages D. vacant land loans 7. According to HMDA, what must be forwarded to the regulator by March 1 of each year? A. Adverse Action Notices B. Do Not Call List C. Loan/Application Register D. Red Flags Policy 8. Lyle calls XYZ Mortgage to inquire about their current rates, and gives them his name and phone number. Assuming that Lyle s name is on the National Do Not Call Registry, how long does XYZ Mortgage have to follow up with Lyle? A. 30 days B. 3 months C. 1 year D. 18 months 9. The SAFE Act mandates specific topics that must be covered as part of a loan originator s continuing education every year. Which of these is a required topic? A. appraisal B. fair lending C. FHA loans D. secondary markets

3 10. Assuming there has been no fraud or adverse action, a consumer is entitled to a free copy of his credit report A. every six months. B. every year. C. every 18 months. Course: Lesson: D. every two years. National Mortgage Loan Originator Review Crammer (ml) Federal Mortgage-Related Laws 11. What may NEVER be asked about during the loan application process? A. marital status B. national origin C. race D. religion 12. Loan officer Carol is in a hurry to leave on her vacation, and she leaves a customer's file that contains his Social Security number and bank account numbers on her desk. Carol's carelessness is violating what federal law? B. FACT Act C. HMDA D. RESPA 13. As the lender looks over the borrower s loan application and is deciding whether or not to make the loan, the lender may NOT consider the A. borrower s employment history. B. borrower s history of making payments on past obligations. C. borrower s receipt of public assistance. D. economic health of the borrower s field of employment. 14. One purpose of the Fair and Accurate Credit Transaction Act is to prevent A. discrimination in lending.

4 B. equity skimming. C. identity theft. D. predatory lending. 15. What loan has a three-day rescission period? A. commercial B. owner-occupied refinance C. non-owner occupied residential Course: Lesson: D. vacant land National Mortgage Loan Originator Review Crammer (ml) Federal Mortgage-Related Laws 16. In order to fulfill RESPA requirements, the Good Faith Estimate (GFE) must be provided to the borrower within three business days of application. Which statement would NOT meet the standards set by RESPA? A. If hand delivered to the borrower's residence, it can be delivered within five business days. B. The GFE is given to the borrower at the time of application. C. The GFE is mailed to the borrower within three business days. D. The GFE is received by the borrower within three business days. 17. Which act requires the lender to provide the borrower a reason for rejection of credit in writing within 30 days of loan application? A. Equal Credit Opportunity Act B. Federal Fair Housing Act C. Community Reinvestment Act of 1977 D. Real Estate Settlement Procedures Act 18. On Form 1003, Section X: Information for Government Monitoring Purposes is used in order to comply with which federal law? A. Community Reinvestment Act. B. Fair Credit Reporting Act. C. Home Mortgage Disclosure Act.

5 D. Truth in Lending Act. 19. According to the FACT Act, which of these could be considered a failure to secure private information? A. burning old files in a steel drum behind the office once a month B. hiring a document destruction company to remove all old files C. shredding documents and throwing them in the trash D. throwing documents into the trash for the cleaning crew to empty nightly 20. Adam secures a loan to buy a small office building that he intends to rent. Under the Truth in Lending Act, how long will he have to change his mind after he signs the note? A. 0 days; there is no right of rescission. B. 24 hours C. 3 days Course: Lesson: D. 30 days National Mortgage Loan Originator Review Crammer (ml) Federal Mortgage-Related Laws 21. Karen is refinancing her house. The length of the rescission period for this mortgage loan is A. three business days excluding Saturday, Sunday, and holidays. B. three business days including Saturday, and excluding Sunday and holidays. C. three business days including Saturday and Sunday, excluding holidays. D. five business days including Saturday, and excluding Sunday and holidays. 22. Which disclosure is required by RESPA and itemizes potential closing costs for the borrower? A. GFE B. Settlement Costs and You booklet C. Settlement Service Providers D. TIL Statement 23. According to the SAFE Act, a mortgage loan originator employed by a federally insured

6 depository institution A. is not required to be registered or licensed. B. must be both registered and state licensed. C. must be registered. D. must be state licensed. 24. Which federal law is NOT primarly intended to address issues of privacy and identity protection relating to credit? B. FACT Act C. FCRA D. Gramm-Leach-Bliley 25. How many days from the day of application does the creditor have to deliver the mortgage servicing disclosure, GFE, and the Settlement Costs and You booklet? A. one B. two C. three Course: Lesson: D. five National Mortgage Loan Originator Review Crammer (ml) Federal Mortgage-Related Laws 26. The Truth in Lending Act (TILA) was enacted to A. delay closings. B. enable banks to sell mortgages more easily. C. prevent abuses in consumer credit cost disclosures. D. put procedures in place for handling settlement. 27. A loan's APR must be disclosed to the consumer on the A. GFE. B. initial escrow statement.

7 C. Loan/Application Register (LAR). D. TIL Statement. 28. Ann closed a loan last week with ABC Mortgage Company. Her name is on the National Do Not Call Registry and on ABC s internal do not call list. ABC A. can call Ann for up to 3 months because they have an established business relationship. B. can call Ann for up to 18 months from the transaction date. C. cannot call Ann because she is on ABC s internal list. D. cannot call Ann because she is on the National Do Not Call Registry. 29. FCRA stands for A. Factual Credit Reporting Act. B. Fair Credit Release Act. C. Fair Credit Reporting Act. D. Fair Credit Reporting Action. 30. Under which federal legislation does the consumer have the right to receive a copy of the appraisal report on a dwelling that is to be used as collateral for a loan? B. HMDA C. RESPA Course: Lesson: D. TILA National Mortgage Loan Originator Review Crammer (ml) Federal Mortgage-Related Laws 31. Which law ensures lenders use an annual percentage rate (APR) so that the borrowers have the information they need to make informed comparisons? A. Equal Credit Opportunity Act B. Fair Housing Act C. Regulation X D. Regulation Z

8 32. Which circumstance would disqualify an applicant for a loan originator license? A. having an appraiser's license B. having a real estate broker license C. having a state-revoked state mortgage broker license D. working for a title agency 33. Lenders submit Loan/Application Registers in order to comply with what law? A. CRA B. FACT Act C. FCRA D. HMDA 34. Which legislation does NOT allow a lender, when qualifying income, to consider the possibility of a borrower having additional children? B. FCRA C. RESPA D. TILA 35. What is NOT a purpose of HMDA? A. aid the public officials in targeting public investments to attract investments from the private sector B. allow for the public to determine possible discriminatory lending patterns C. allow the creditor to determine the risk of the loan by reviewing the race, sex, and national origin of the borrower D. provide the public with information regarding a financial institution's record of assisting in the community's credit needs Course: National Mortgage Loan Originator Review Crammer (ml) Lesson: Federal Mortgage-Related Laws

9 You have not successfully completed the exam Score Required: 75 Exam Score: 23 Attempt: 45 of Unlimited X 1. How many business days after a mortgage loan application does a loan officer have to mail disclosures to the borrower? A. four B. three The required disclosures, including the Good Faith Estimate, Truth in Lending Statement, and Mortgage Servicing Disclosure Statement, must be delivered to the borrower within three business days, according to Reg X and Reg Z. [R033] X 2. Laura s name is on the National Do Not Call Registry. At what point after she closes a loan with ABC Mortgage must ABC stop contacting her? A. immediately D. after 18 months A company may call a customer with whom they have an established business relationship only up to 18 months after the customer s last transaction or payment. [R042] X 3. How many hours of annual continuing education are required by the SAFE Act for loan originators? A. 5 B HMDA stands for The SAFE Act mandates that loan originators take at least eight hours of continuing education every year. [R035] A. Home Mortgage Disclosure Act. A. Home Mortgage Disclosure Act. X 5. What government agency oversees TILA? HMDA stands for the Home Mortgage Disclosure Act. [R029] A. Congress B. Federal Reserve Board The Federal Reserve Board administers the provisions of the Truth in Lending Act. [R083] X 6. What loan type is NOT included in the Home Mortgage Disclosure Act?

10 A. owner-occupied refinances D. vacant land loans Vacant land loans are not covered under the Home Mortgage Disclosure Act. [R090] X 7. According to HMDA, what must be forwarded to the regulator by March 1 of each year? A. Adverse Action Notices C. Loan/Application Register The Home Mortgage Disclosure Act requires that all data collected the prior year on the Loan/Application Register be forwarded to the regulator by March 1. [R010] X 8. Lyle calls XYZ Mortgage to inquire about their current rates, and gives them his name and phone number. Assuming that Lyle s name is on the National Do Not Call Registry, how long does XYZ Mortgage have to follow up with Lyle? A. 30 days B. 3 months A company may call a customer for three months after the last inquiry, even if he is on the National Do Not Call Registry. [R045] X 9. The SAFE Act mandates specific topics that must be covered as part of a loan originator s continuing education every year. Which of these is a required topic? A. appraisal B. fair lending The SAFE Act requires continuing education on federal law and regulation; ethics, including fraud, consumer protection, and fair lending; and subprime lending. [R072] X 10. Assuming there has been no fraud or adverse action, a consumer is entitled to a free copy of his credit report A. every six months. B. every year. FCRA provisions entitle consumers to one free disclosure every 12 months, upon request, from each of the three nationwide credit bureaus. [R024] X 11. What may NEVER be asked about during the loan application process? A. marital status D. religion Religion may not be asked about, since it is in no way included in government monitoring under the guidelines of the

11 Home Mortgage Disclosure Act (HMDA). [R091] X 12. Loan officer Carol is in a hurry to leave on her vacation, and she leaves a customer's file that contains his Social Security number and bank account numbers on her desk. Carol's carelessness is violating what federal law? B. FACT Act The FACT Act addresses the problem of identity theft, and a loan officer who does not secure consumer files would be in violation of that act. [R044] X 13. As the lender looks over the borrower s loan application and is deciding whether or not to make the loan, the lender may NOT consider the A. borrower s employment history. C. borrower s receipt of public assistance. Considering the borrower's receipt of public assistance if the applicant adequately met all other criteria would be a violation of the Equal Credit Opportunity Act (ECOA). All people must be considered for credit equally on the basis of income adequacy, sufficient net worth, job stability, and satisfactory credit rating. [R023] X 14. One purpose of the Fair and Accurate Credit Transaction Act is to prevent A. discrimination in lending. C. identity theft. The Fair and Accurate Credit Transaction Act of 2003, sometimes referred to as either the FACT Act or simply FACTA, added new sections to the federal Fair Credit Reporting Act intended primarily to help consumers fight the growing crime of identity theft. [R047] X 15. What loan has a three-day rescission period? A. commercial B. owner-occupied refinance On an owner-occupied residential refinance (and on a second mortgage), there is always a three-day rescission. During that rescission time, the borrower can change his mind and cancel the transaction. [R089] 16. In order to fulfill RESPA requirements, the Good Faith Estimate (GFE) must be provided to the borrower within three business days of application. Which statement would NOT meet the standards set by RESPA? A. If hand delivered to the borrower's residence, it can be delivered within five business days. A. If hand delivered to the borrower's residence, it can be delivered within five business days.

12 RESPA only requires that the Good Faith Estimate be provided within three days and accepts the mailing of that document to fulfill that requirement. It is never acceptable to provide the GFE after three business days for any reason. [R040] 17. Which act requires the lender to provide the borrower a reason for rejection of credit in writing within 30 days of loan application? A. Equal Credit Opportunity Act A. Equal Credit Opportunity Act The Equal Credit Opportunity Act or ECOA requires the lender to provide the borrower a reason for rejection of credit in writing within 30 days of loan application. [R098] X 18. On Form 1003, Section X: Information for Government Monitoring Purposes is used in order to comply with which federal law? A. Community Reinvestment Act. C. Home Mortgage Disclosure Act. HMDA is found in section X of the 1003, titled Information for Government Monitoring Purposes. It gathers the information needed to make the lending practices public record. [R046] X 19. According to the FACT Act, which of these could be considered a failure to secure private information? A. burning old files in a steel drum behind the office once a month D. throwing documents into the trash for the cleaning crew to empty nightly The FACT Act has requirements for securing and disposing of personal information such as Social Security numbers. Files should be secure, even after hours. [R013] 20. Adam secures a loan to buy a small office building that he intends to rent. Under the Truth in Lending Act, how long will he have to change his mind after he signs the note? A. 0 days; there is no right of rescission. A. 0 days; there is no right of rescission. Regulation Z does not require a rescission period for a commercial loan. [R019] X 21. Karen is refinancing her house. The length of the rescission period for this mortgage loan is A. three business days excluding Saturday, Sunday, and holidays. B. three business days including Saturday, and excluding Sunday and holidays. The right to rescind this type of credit transaction extends until midnight of the third business day after a transaction

13 closes. [R041] 22. Which disclosure is required by RESPA and itemizes potential closing costs for the borrower? A. GFE A. GFE RESPA requires lenders to provide, in a clear and concise form, a good faith estimate (GFE) of the amount of, or range of, settlement charges the borrower is likely to pay. [R101] X 23. According to the SAFE Act, a mortgage loan originator employed by a federally insured depository institution A. is not required to be registered or licensed. C. must be registered. The SAFE Act requires any mortgage loan originator employed by a federally insured depository institution to be registered. [R016] 24. Which federal law is NOT primarly intended to address issues of privacy and identity protection relating to credit? The Equal Credit Opportunity Act is primarily an antidiscrimination law. The other laws deal directly with credit reporting and protection of consumer financial records and identity. [R102] X 25. How many days from the day of application does the creditor have to deliver the mortgage servicing disclosure, GFE, and the Settlement Costs and You booklet? A. one C. three X 26. The Truth in Lending Act (TILA) was enacted to The creditor has three days to deliver these documents to the consumer (if they were not delivered at the time of application). [R034] A. delay closings. C. prevent abuses in consumer credit cost disclosures. TILA requires lenders to disclose consumer credit costs in a uniform manner to promote informed use of consumer credit, enabling them to compare credit costs and shop around for the best credit terms. [R073] X 27. A loan's APR must be disclosed to the consumer on the A. GFE.

14 D. TIL Statement. The Truth in Lending Statement (TIL) discloses the total cost of financing, including the annual percentage rate (APR). [R004] X 28. Ann closed a loan last week with ABC Mortgage Company. Her name is on the National Do Not Call Registry and on ABC s internal do not call list. ABC X 29. FCRA stands for A. can call Ann for up to 3 months because they have an established business relationship. C. cannot call Ann because she is on ABC s internal list. A customer, even one with whom a company has an established business relationship, is off limits if she is on the company s required internal do not call list. [R022] A. Factual Credit Reporting Act. C. Fair Credit Reporting Act. FCRA stands for the Fair Credit Reporting Act. This act requires accuracy in reporting credit information. [R026] 30. Under which federal legislation does the consumer have the right to receive a copy of the appraisal report on a dwelling that is to be used as collateral for a loan? Since the appraised value and the property condition are considered in the approval process, the consumer has the right to inspect the document being used to evaluate these facts, according to the Equal Credit Opportunity Act. [R080] X 31. Which law ensures lenders use an annual percentage rate (APR) so that the borrowers have the information they need to make informed comparisons? A. Equal Credit Opportunity Act D. Regulation Z Under Regulation Z, lenders must use an annual percentage rate (APR) so that the borrowers have the information they need to make informed comparisons among different lenders. [R115] X 32. Which circumstance would disqualify an applicant for a loan originator license? A. having an appraiser's license C. having a state-revoked state mortgage broker license The SAFE Act disqualifies an applicant who has had a license revoked, but having another career would not be a disqualification. [R122]

15 X 33. Lenders submit Loan/Application Registers in order to comply with what law? A. CRA D. HMDA The Home Mortgage Disclosure Act (HMDA) requires lenders to track certain information about residential loan applicants on LARs. [R043] 34. Which legislation does NOT allow a lender, when qualifying income, to consider the possibility of a borrower having additional children? X 35. What is NOT a purpose of HMDA? Family size may not be considered in qualifying income under ECOA. [R119] A. aid the public officials in targeting public investments to attract investments from the private sector C. allow the creditor to determine the risk of the loan by reviewing the race, sex, and national origin of the borrower The HMDA information obtained during the loan application may not be used in the underwriting decision to determine the risk of the loan. [R084] Back