MLO SAFE NMLS STUDYS CORRECT ANSWERS AND
QUESTIONS SET A+
✔✔The FHA debt ratios are _____________/__________________. - ✔✔31/43. 31%
Primary Housing Expense (Front End Ratio) and 43% Total Obligations (Back End
Ratio)
✔✔The SAFE Act uses unique identifiers instead of _______________. - ✔✔Social
Security Numbers
✔✔Lenders report detailed loan information and demographic information because of
which of the following acts?
1. GLBA
2.HMDA
3.RESPA
4.TIlA - ✔✔HMDA, The Home Mortgage Disclosure Act
✔✔Three people own a primary residence as joint owners with rights of survivorship. At
the closing of their refinance, each was given a notice of the right to rescind. How of the
three must exercise that right to cancel the funding? - ✔✔One, any one of the three can
rescind and cancel the refinance transaction
✔✔Section 8 of RESPA prohibits _____________________. - ✔✔Kickbacks for
referrals.
✔✔A refinance of the borrower's residence that closes on Monday will fund on
_________________________. - ✔✔Friday (three business day right of rescission
period ends after midnight on Thursday)
✔✔Per RESPA the maximum origination fee that may be charged on a loan is
____________________. - ✔✔Unknown, RESPA requires disclosure of origination fees
but does not set the maximum fee that can be charged.
,✔✔Per the Dodd-Frank Act does a "qualified mortgage" provide a "safe harbor"
regarding compliance with the ability-to-repay requirement? - ✔✔Yes
✔✔Relative to the Do-Not-Call registry a company may call a consumer for up to
__________________________ months after the consumer makes an inquiry or
submits an application to the company. - ✔✔3 Months
✔✔There are three (3) groups of laws under the CFPB includig 1. financial disclosure,
2. privacy, protection and consumer identification and 3.
__________________________. - ✔✔3. Prohibition of Predatory Lending
✔✔The 3/7/3 Rule is a provision of the _______________ Act related to required
disclosures and waiting periods. - ✔✔TILA, Truth in Lending Act
✔✔The illegal practice of inducing owners to sell their homes by suggesting that the
ethnic or racial composition of the neighborhood is changing is called
_____________________________. - ✔✔Blockbusting
✔✔The borrower's ability to pay a loan is referred to as _________________________.
- ✔✔Capacity
✔✔The Fair Housing Act of 1968 protects against discrimination based on race, color,
religion, sex, national origin, disability and __________________________. -
✔✔Familial Status
✔✔Which law requires that all mortgage loan originators pass a national licensing
exam? - ✔✔The SAFE Act, The Secure and Fair Enforcement for the mortgage
licensing act of 2008.
✔✔Two sources of funds that may be used for a down payment on an FHA insured loan
include ___________ and _______________. - ✔✔(1) A gift from a family member and
(2) down payment assistance grant
✔✔The documents issues by the VA which state the value of the subject property
based on an approved appraisal is called the _______________________. - ✔✔CRV,
Certificate of Reasonable Value or NOV, Notice of Value
✔✔Instead of notifying a borrower with the actual details of adverse action taken within
30 days of the loan application, the lender notified the borrower that he has the right to
request the actual details. Is that acceptable per ECOA's guidelines? - ✔✔Yes, When
adverse action is taken, actual details or the right to those details has to be disclosed
within 30 days of application. The borrower can request specific reasons within 60 days.
, ✔✔Broker A has a client and Broker B has access to a loan product that will satisfy the
clients needs. A and B Brokers decide to share the brokerage fee. Accordingly, B pays
A a referral fee. Has either Broker violated any law? If so, which law and who committed
the violation? - ✔✔Both Brokers A and B have violated Section 8 of RESPA. Per the
Real Estate Settlement Procedures Act one cannot give or receive a thing of value in
exchange for a referral.
✔✔Why is it not acceptable to post privacy policies in a prominent location in an office?
- ✔✔Federally mandated disclosures must be made directly to the consumer so that the
consumer has a copy of the notice.
✔✔All federal laws were enforced by the FTC and now the CFPB and possibly other
agencies. The maximum penalty that can be imposed is incarceration for
__________________ year(s) and a maximum fine of $___________________. - ✔✔1
year and a $10,000 fine
✔✔Per ECOA, what section of the 1003 must an originator complete, with or without the
help of the borrower? - ✔✔Section X of the 1003 (section 10 of the 1003 loan
application)
✔✔What class is protected under Regulation B (ECOA) but, not under Regulation V
(Fair Housing Act)? - ✔✔Age
✔✔Monies paid by a lender to lower the cash out-of-pocket expenses for a borrower at
closing, by raising the interest rate on the loan are called _________________. -
✔✔YSP, borrower credits
✔✔What specific lender activities does HMDA prohibit? - ✔✔HMDA, the Home
Mortgage Disclosure Act is a disclosure law and does not prohibit any specific lender
activities.
✔✔If an owner occupied one unit of a quadraplex and rents the other three units, does
the Fair Housing Act provide protections? - ✔✔No, this transaction whether two, three
or four units is exempt from the provisions of the Fair Housing Act.
✔✔RESPA requires that a borrower is notified _____________ days before the
effective date of the transfer of servicing. - ✔✔Fifteen Days
✔✔SRP stands for ____________________________. - ✔✔Service Release Premium
✔✔Supervisory agencies, through the (FFIEC) Federal Financial Institutions
Examination Council compile _____________ data in the form of individual disclosure
statements for each institution. - ✔✔Loan, the number of loans applied for and made
QUESTIONS SET A+
✔✔The FHA debt ratios are _____________/__________________. - ✔✔31/43. 31%
Primary Housing Expense (Front End Ratio) and 43% Total Obligations (Back End
Ratio)
✔✔The SAFE Act uses unique identifiers instead of _______________. - ✔✔Social
Security Numbers
✔✔Lenders report detailed loan information and demographic information because of
which of the following acts?
1. GLBA
2.HMDA
3.RESPA
4.TIlA - ✔✔HMDA, The Home Mortgage Disclosure Act
✔✔Three people own a primary residence as joint owners with rights of survivorship. At
the closing of their refinance, each was given a notice of the right to rescind. How of the
three must exercise that right to cancel the funding? - ✔✔One, any one of the three can
rescind and cancel the refinance transaction
✔✔Section 8 of RESPA prohibits _____________________. - ✔✔Kickbacks for
referrals.
✔✔A refinance of the borrower's residence that closes on Monday will fund on
_________________________. - ✔✔Friday (three business day right of rescission
period ends after midnight on Thursday)
✔✔Per RESPA the maximum origination fee that may be charged on a loan is
____________________. - ✔✔Unknown, RESPA requires disclosure of origination fees
but does not set the maximum fee that can be charged.
,✔✔Per the Dodd-Frank Act does a "qualified mortgage" provide a "safe harbor"
regarding compliance with the ability-to-repay requirement? - ✔✔Yes
✔✔Relative to the Do-Not-Call registry a company may call a consumer for up to
__________________________ months after the consumer makes an inquiry or
submits an application to the company. - ✔✔3 Months
✔✔There are three (3) groups of laws under the CFPB includig 1. financial disclosure,
2. privacy, protection and consumer identification and 3.
__________________________. - ✔✔3. Prohibition of Predatory Lending
✔✔The 3/7/3 Rule is a provision of the _______________ Act related to required
disclosures and waiting periods. - ✔✔TILA, Truth in Lending Act
✔✔The illegal practice of inducing owners to sell their homes by suggesting that the
ethnic or racial composition of the neighborhood is changing is called
_____________________________. - ✔✔Blockbusting
✔✔The borrower's ability to pay a loan is referred to as _________________________.
- ✔✔Capacity
✔✔The Fair Housing Act of 1968 protects against discrimination based on race, color,
religion, sex, national origin, disability and __________________________. -
✔✔Familial Status
✔✔Which law requires that all mortgage loan originators pass a national licensing
exam? - ✔✔The SAFE Act, The Secure and Fair Enforcement for the mortgage
licensing act of 2008.
✔✔Two sources of funds that may be used for a down payment on an FHA insured loan
include ___________ and _______________. - ✔✔(1) A gift from a family member and
(2) down payment assistance grant
✔✔The documents issues by the VA which state the value of the subject property
based on an approved appraisal is called the _______________________. - ✔✔CRV,
Certificate of Reasonable Value or NOV, Notice of Value
✔✔Instead of notifying a borrower with the actual details of adverse action taken within
30 days of the loan application, the lender notified the borrower that he has the right to
request the actual details. Is that acceptable per ECOA's guidelines? - ✔✔Yes, When
adverse action is taken, actual details or the right to those details has to be disclosed
within 30 days of application. The borrower can request specific reasons within 60 days.
, ✔✔Broker A has a client and Broker B has access to a loan product that will satisfy the
clients needs. A and B Brokers decide to share the brokerage fee. Accordingly, B pays
A a referral fee. Has either Broker violated any law? If so, which law and who committed
the violation? - ✔✔Both Brokers A and B have violated Section 8 of RESPA. Per the
Real Estate Settlement Procedures Act one cannot give or receive a thing of value in
exchange for a referral.
✔✔Why is it not acceptable to post privacy policies in a prominent location in an office?
- ✔✔Federally mandated disclosures must be made directly to the consumer so that the
consumer has a copy of the notice.
✔✔All federal laws were enforced by the FTC and now the CFPB and possibly other
agencies. The maximum penalty that can be imposed is incarceration for
__________________ year(s) and a maximum fine of $___________________. - ✔✔1
year and a $10,000 fine
✔✔Per ECOA, what section of the 1003 must an originator complete, with or without the
help of the borrower? - ✔✔Section X of the 1003 (section 10 of the 1003 loan
application)
✔✔What class is protected under Regulation B (ECOA) but, not under Regulation V
(Fair Housing Act)? - ✔✔Age
✔✔Monies paid by a lender to lower the cash out-of-pocket expenses for a borrower at
closing, by raising the interest rate on the loan are called _________________. -
✔✔YSP, borrower credits
✔✔What specific lender activities does HMDA prohibit? - ✔✔HMDA, the Home
Mortgage Disclosure Act is a disclosure law and does not prohibit any specific lender
activities.
✔✔If an owner occupied one unit of a quadraplex and rents the other three units, does
the Fair Housing Act provide protections? - ✔✔No, this transaction whether two, three
or four units is exempt from the provisions of the Fair Housing Act.
✔✔RESPA requires that a borrower is notified _____________ days before the
effective date of the transfer of servicing. - ✔✔Fifteen Days
✔✔SRP stands for ____________________________. - ✔✔Service Release Premium
✔✔Supervisory agencies, through the (FFIEC) Federal Financial Institutions
Examination Council compile _____________ data in the form of individual disclosure
statements for each institution. - ✔✔Loan, the number of loans applied for and made
