SAFE MORTGAGE LOAN ORIGINATOR EXPECTED QUESTIONS AND
ANSWERS 2027
Question 1.
RESPA
Correct Answer: Real Estate Settlement Procedures Act (Regulation X) was
intended to reform the settlement process "to ensure that consumers
throughout the Nation are provided with greater and more timely information on
the nature and costs of the settlement process and are protected from
unnecessarily high settlement charges caused by certain abusive practices..."
Question 2.
Four purposes of RESPA
Correct Answer: 1. Require effective advance disclosure of costs. 2. Eliminate
kickbacks and referral fees. 3. Limit amount held in escrow or reserve accounts.
4. Reform record keeping of land title information.
Question 3.
What does RESPA apply to?
Correct Answer: Any transaction involving a federally regulated mortgage loan.
Question 4.
What is a federally regulated mortgage loan?
Correct Answer: Any loan secured by a first lien on residential property designed
for the occupancy of 1-4 families made by any lender which meets any of the
following criteria: •has deposits insured by the federal govt. •regulated by the
Federal Government •insured by HUD •intends to sell the loan to Fannie Mae,
Freddie Mac, or Ginnie Mae •makes more than $1,000,000 in loans per year.
Question 5.
RESPA affects any settlement service which includes the following:
Correct Answer: •Title Searches •Title Examinations •Title insurance •Attorney
services •Preparation of documents •Surveys •Credit Reports •Appraisals •Pest
inspections •Real estate services •Loan origination •Processing mortgages
•Closing or settling mortgages
Question 6.
When must it be disclosed to the borrower if a loan can or cannot be transferred?
Correct Answer: At the time of application or within three days of application.
,Question 7.
When must notice be given to the borrower if servicing IS transferred?
Correct Answer: No less than 15 days before the effective date of the transfer.
Question 8.
How long does the borrower have to make payments to either lender without any negative
implications including credit reporting and late charges?
Correct Answer: During the 60 days following the effective date.
Question 9.
What must the initial servicing disclosure include?
Correct Answer: Whether or not the lender intends to transfer the servicing of
the loan and the lenders history of transferring servicing.
Question 10.
What must the notice of serving transfer include?
Correct Answer: Contact info for both the new lender and the old lender. As well
as the following: -effective date of the transfer -phone # for both the
transferring servicer and the new servicer. -name or dept. of both companies for
contact to answer questions -date on which old servicer will cease accepting
payments -any info regarding mortgage life or disability insurance -a statement
advising the borrower that the terms of their loan will not change.
Question 11.
What is the purpose of the aggregate escrow analysis?
Correct Answer: To reduce the amount being held in escrow or reserve accounts
(accounts for taxes and ins.)
Question 12.
How much may servicers hold as a cushion for escrow?
Correct Answer: Two months of taxes, insurance and mortgage insurance as
applicable.
Question 13.
How much may servicers collect in each payment?
, Correct Answer: One months worth of escrowed items unless there is a shortage
in the account.
Question 14.
How often must accounts be analyzed?
Correct Answer: Once every 12 months.
Question 15.
Any overage over what needs to be refunded to the borrower within what time?
Correct Answer: Over $50 within 30 days.
Question 16.
What options does the servicer have when the account is short?
Correct Answer: -do nothing -require a lump sum deposit into account. However
they can only do this if the shortage/deficiency is less than one months worth of
deposits. -have borrower repay SHORTAGES over 12 months. -have borrower
repay DEFICIENCIES over a 2 month period.
Question 17.
What is the penalty for non-compli-ance in repaying escrow?
Correct Answer: -$65/occurrence up to $120k/year if UNintentional.
-$110/occurrence with no limit of INtentional.
Question 18.
What is the penalty for kickbacks?
Correct Answer: Fine of $10,000, one year in prison or both.
Question 19.
What does an affiliated business arrangement allow?
Correct Answer: Allows the referrer of business to receive compensation for
referrals through ownership in the entity to which business is referred.
Question 20.
What does RESPA define an affiliated business arrangement as?
Correct Answer: An arrangement in which a person who refers business or their
associate has either an affiliate relationship or a direct or beneficial ownership
interest of more than 1% in a provider of settlement services and.... They
ANSWERS 2027
Question 1.
RESPA
Correct Answer: Real Estate Settlement Procedures Act (Regulation X) was
intended to reform the settlement process "to ensure that consumers
throughout the Nation are provided with greater and more timely information on
the nature and costs of the settlement process and are protected from
unnecessarily high settlement charges caused by certain abusive practices..."
Question 2.
Four purposes of RESPA
Correct Answer: 1. Require effective advance disclosure of costs. 2. Eliminate
kickbacks and referral fees. 3. Limit amount held in escrow or reserve accounts.
4. Reform record keeping of land title information.
Question 3.
What does RESPA apply to?
Correct Answer: Any transaction involving a federally regulated mortgage loan.
Question 4.
What is a federally regulated mortgage loan?
Correct Answer: Any loan secured by a first lien on residential property designed
for the occupancy of 1-4 families made by any lender which meets any of the
following criteria: •has deposits insured by the federal govt. •regulated by the
Federal Government •insured by HUD •intends to sell the loan to Fannie Mae,
Freddie Mac, or Ginnie Mae •makes more than $1,000,000 in loans per year.
Question 5.
RESPA affects any settlement service which includes the following:
Correct Answer: •Title Searches •Title Examinations •Title insurance •Attorney
services •Preparation of documents •Surveys •Credit Reports •Appraisals •Pest
inspections •Real estate services •Loan origination •Processing mortgages
•Closing or settling mortgages
Question 6.
When must it be disclosed to the borrower if a loan can or cannot be transferred?
Correct Answer: At the time of application or within three days of application.
,Question 7.
When must notice be given to the borrower if servicing IS transferred?
Correct Answer: No less than 15 days before the effective date of the transfer.
Question 8.
How long does the borrower have to make payments to either lender without any negative
implications including credit reporting and late charges?
Correct Answer: During the 60 days following the effective date.
Question 9.
What must the initial servicing disclosure include?
Correct Answer: Whether or not the lender intends to transfer the servicing of
the loan and the lenders history of transferring servicing.
Question 10.
What must the notice of serving transfer include?
Correct Answer: Contact info for both the new lender and the old lender. As well
as the following: -effective date of the transfer -phone # for both the
transferring servicer and the new servicer. -name or dept. of both companies for
contact to answer questions -date on which old servicer will cease accepting
payments -any info regarding mortgage life or disability insurance -a statement
advising the borrower that the terms of their loan will not change.
Question 11.
What is the purpose of the aggregate escrow analysis?
Correct Answer: To reduce the amount being held in escrow or reserve accounts
(accounts for taxes and ins.)
Question 12.
How much may servicers hold as a cushion for escrow?
Correct Answer: Two months of taxes, insurance and mortgage insurance as
applicable.
Question 13.
How much may servicers collect in each payment?
, Correct Answer: One months worth of escrowed items unless there is a shortage
in the account.
Question 14.
How often must accounts be analyzed?
Correct Answer: Once every 12 months.
Question 15.
Any overage over what needs to be refunded to the borrower within what time?
Correct Answer: Over $50 within 30 days.
Question 16.
What options does the servicer have when the account is short?
Correct Answer: -do nothing -require a lump sum deposit into account. However
they can only do this if the shortage/deficiency is less than one months worth of
deposits. -have borrower repay SHORTAGES over 12 months. -have borrower
repay DEFICIENCIES over a 2 month period.
Question 17.
What is the penalty for non-compli-ance in repaying escrow?
Correct Answer: -$65/occurrence up to $120k/year if UNintentional.
-$110/occurrence with no limit of INtentional.
Question 18.
What is the penalty for kickbacks?
Correct Answer: Fine of $10,000, one year in prison or both.
Question 19.
What does an affiliated business arrangement allow?
Correct Answer: Allows the referrer of business to receive compensation for
referrals through ownership in the entity to which business is referred.
Question 20.
What does RESPA define an affiliated business arrangement as?
Correct Answer: An arrangement in which a person who refers business or their
associate has either an affiliate relationship or a direct or beneficial ownership
interest of more than 1% in a provider of settlement services and.... They
