STUDY GUIDE QUESTIONS WITH
ACCURATE SOLUTIONS
●● RESPA-Real Estate Settlement Procedures Act
Answer: The Federal Statute that deals with the settlement of residential
mortgage loans.
●● RESPA's section 9 Prohibits
Answer: Home sellers from requiring home buyers to purchase title
insurance from a particular company providing title services.
●● The Dodd-Frank Act modifies ECOA to require a creditor to furnish
a copy of an appraisal developed in connection with a first
mortgage_____________________ and absolutely not later than
________ business days prior to closing.
Answer: upon completion and 3 business days
●● TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate)
Answer: Per the Dodd Frank Act, a single disclosure form combines
these 2 statements.
,●● Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points
and fees may not exceed ________% of the total loan amount.
Answer: 3% (three percent)
●● Per a provision of the Dodd-Frank Act mortgage lenders are to
determine that a borrower has a reasonable ability to repay a loan. Does
this provision apply to all loans or just owner occupied loans?
Answer: All loans, whether owner occupied or not.
●● A loan subject to HOEPA allows prepayment penalties for the first
______ years of the loan.
Answer: 2 (two) years
●● Per the Dodd-Frank Act an abusive act would include which of the
following:
1. One that materially interferes with the consumers ability to understand
the product or service.
2. One that take unreasonable advantage of a consumers' lack of
understanding.
3. One that takes unreasonable advantage of the consumer's reasonable
reliance on the MLO.
Answer: All three would be considered abusive acts.
,●● Per the Dodd-Frank Act if an MLO receives compensation directly
from a consumer, up to how much additional compensation may be
received from a lender in the same transaction?
Answer: $0.00, dual compensation is not allowed. Compensation must
be borrower paid or lender paid.
●● What kinds of reasons are necessary for a lender to take adverse
action with regard to a borrower?
Answer: Specific reasons.
●● Adverse action means ______________________.
Answer: A denial or revocation of credit. Also, a change in the terms of
an existing credit arrangement or a refusal to grant credit in substantially
the amount or terms requested.
●● Per Regulation B, Lenders should retain certain records for
_____________ months.
Answer: 25 Months
●● Because of the impact of the Dodd-Frank Act on a second mortgage,
an APR that exceeds the ________ by more than _____% is the trigger
that defines a high cost loan.
Answer: APOR ( Average Prime Offer Rate), 8.5%
, ●● Regulation C is known as ________________________.
Answer: HMDA, The Home Mortgage Disclosure Act.
●● What is the purpose of HMDA?
Answer: The HMDA determines whether financial institutions are
serving the housing needs of their communities. It also identifies
patterns of discriminatory lending.
●● Under what circumstances can a lender with an Affiliated Business
Arrangement require a borrower to use a specific third party service
provider?
Answer: If there are no kickback or referral fees and the service provider
is an attorney, credit reporting agency or appraiser the lender can require
that the borrower uses the provider
●● If a transfer of servicing occurs, the _______________ must provide
a servicing transfer statement not less than ________ days before the
transfer occurs.
Answer: Servicer, 15 (fifteen) days.
●● An individual who fails the MLO written exam 3 times must wait
_________ months to retake the exam.
Answer: 6 (Six) Months