NMLS License TEST Questions and Answers Rated A. Graded A+

NMLS License TEST Questions and Answers Rated A. Graded A+ Document Content and Description Below NMLS License TEST Questions and Answers Rated A The practice of getting people to sell their homes at bargain prices by suggesting that certain ethnic groups are going to move into the area is nick named: 1. Price fixing 2. Redlining 3. Steering 4. Blockbusting 4. Blockbusting You and the borrower believe an Adjustable Rate Mortgage would be best for the borrower. What is the name of the booklet you are required to give? 1.CHARM Booklet 2.ARM Disclosure 3.Fair Lending Practices Booklet 4.RESPA Booklet 1.CHARM Booklet How many days in advance of transferring a loan to another lender must the current mortgage servicer inform that customer of the transfer to another lender who will subsequently be servicing the loan? 1. 15 2. 20 3. 3 4. 45 1. 15 After meeting with the borrowers to complete a loan application, you return to your office and order a Tri-Merged credit report. Now that you have a credit report, what Loan Disclosure must you now prepare and mail (or give) to them? 1.Notice to Home Loan Applicant2.Credit Authorization Consent 3.Denial Letter 4.Rapid Rescore 1.Notice to Home Loan Applicant In a face-to-face application, what do you do if the borrower refuses to fill out the race, ethnicity and gender section on Section X of the 1003? 1.Continue with the loan application, but be sure to get the information completed before submitting the loan to the underwriter. 2.Process and complete the loan entirely without the information. 3.Use your best guess and complete the information in Section X of the 1003. 4.End the application process. 3.Use your best guess and complete the information in Section X of the 1003. Which is not part of the original loan application? 1.Borrower's marital status 2.ECOA disclosure 3.Borrower provided ethnicity 4.Borrower provided birth date 2.ECOA disclosure Which is not an application disclosure? 1.Servicing disclosure 2.Environmental hazard disclosure 3.Appraisal disclosure 4.APR disclosure 2.Environmental hazard disclosure How many days prior to this loan transfer does the current mortgage servicer have to inform the customer? 1. 15 2. 20 3. 34. 45 1. 15 What is not likely to happen if the lender/investor finds fraud? 1. A 1% interest rate increase on the loan 2. The lender and/or broker will be required to repurchase the loan 3. The entire loan can be called due and payable 4. The loan officer must pay back any premium made on the loan 1. A 1% interest rate increase on the loan What is the maximum penalty for providing false information on a federally related loan? 1. $5,000 fine and one year jail time 2. $250,000 fine and 30 years jail time 3. Revoke license and $1,000 fine 4. Up to $1,000,000 fine and jail time 4. Up to $1,000,000 fine and jail time What law requires the lender to collect borrower information for first mortgages and home improvement loans? 1. HOEPA 2. TILA 3. ECOA 4. HMDA 4. HMDA HMDA requires the lenders to obtain which of the following information for each borrower? 1.Age and Race 2.Race and Sex 3.Marital status and Sex 4.Marital status and Age 2.Race and Sex Providing a referral fee to a realtor is? 1.An acceptable practice2.An illegal practice 3.An acceptable practice as long as it is a fair price for services actually provided 4.Acceptable only if fully disclosed 2.An illegal practice What are the penalties for giving a referral fee to a realtor? 1.There are no penalties. 2.$10,000 per incident and up to one year in jail 3.$100,000 plus up to 30 years in jail 4.$1,000,000 plus up to one year in jail 2.$10,000 per incident and up to one year in jail What are the penalties for violating Section 8 of RESPA? 1.$5,000 per incident and up to one year in jail 2.$10,000 per incident plus one year jail time 3.$100,000 plus up to 30 years in jail 4.$1,000,000 plus up to one year in jail 2.$10,000 per incident plus one year jail time Which of the following does RESPA require on a purchase? 1.Lead paint notice 2.A 1008 3.APR disclosure 4.Settlement cost booklet 4.Settlement cost booklet Aggregate escrow requires that the borrower have which of the following? 1.$0 in the account or no more than 2 months impounds in reserves 2.$0 in account, or no more than 1 month impound in reserves 3.No more than 1% of the principal balance of the loan maximum in the impound account 4.$100 and no impound reserves 1.$0 in the account or no more than 2 months impounds in reserves What is the minimum amount of time that a lender has to inform the borrower that they are transferring servicing? 1.15 days2.45 days 3.10 days 4.60 days 1.15 days A yield spread premium is disclosed on which document? 1.TIL disclosure 2.Good faith estimate 3.Servicing disclosure 4.Rescission disclosure 2.Good faith estimate Which is the primary law that affects mortgage loan closings? 1.TILA 2.ECOA 3.RESPA 4.HMDA 3.RESPA If a loan officer were to take a loan application Tuesday at 1:00 p.m., what is the last day that the good faith estimate must be mailed or disclosed? 1.The same day, Tuesday before end of business 2.The next day, Wednesday before 5pm 3.Friday before midnight 4.Within 3 days before 5pm 3.Friday before midnight If you are a seller, it is acceptable to REQUIRE the use of a specific title provider: the requirement pertains to the sellers own policy only. the other service provider is an affiliate. long as you provide the borrower with the appropriate disclosure within three business days of the loan application. if the service provider is licensed. the requirement pertains to the sellers own policy only.RESPA imposes requirements about or prohibits all of the following except: kickbacks and referral fees. loan origination fee. amount of prepaids. mation that must be disclosed to the borrower at the loan application or within 3 business days of the application. loan origination fee. Regulation Z requires: osure of the settlement costs to buyers and sellers. osure of the impound accounts and the prepaids of the borrower(s). tation and disclosure of the APR to the borrowers. osure of servicing information on the loan. tation and disclosure of the APR to the borrowers. If a borrower and a co-borrower are refinancing a home that they both occupy, at the closing - who must receive a copy of the rescission disclosure? 1.Both borrowers 2.Either borrower or co-borrower 3.Neither borrower because it is a refinance 4.Neither borrower because it is owner occupied and was already financed 1.Both borrowers If a loan is a refinance, and the loan is improperly closed and funded in one day with no three day rescission period, how long do the borrowers have to rescind the transaction? 1. 1 day 2. 3 days 3. 1 week 4. 3 years 4. 3 years What is not included in the APR calculations? 1.Mortgage insurance premium2.Origination fee 3.Processing fee 4.Hazard/Fire insurance premium 4.Hazard/Fire insurance premium Regulation B allows all of the following except: ries about the ages of dependents. ries about citizenship and residency status. ring about receiving child support and/or alimony. the terms husband or wife when inquiring about a potential co-borrower. the terms husband or wife when inquiring about a potential co-borrower. If an applicant has been denied credit, how long does the lender have to get a letter of adverse action to him/her? 1. 10 days 2. 15 days 3. 30 days 4. It is not necessary to send a letter as long as the borrower knew before they applied they had bad credit. 3. 30 days If the file is inactive, for borrower non-performance a declination letter must be sent within? 1. 10 days 2. 15 days 3. 30 days 4. It is not necessary to send a letter if the file is merely inactive. 3. 30 days Define "Business day" under the Truth in Lending Act for the three day right of rescission. 1.Monday through Friday, except federally related holidays 2.Monday through Saturday, except federally related holidays 3.Monday through Saturday except legal public holidays4.Any day the mortgage company is open for "business" 3.Monday through Saturday except legal public holidays Which property is exempt under RESPA? 1. Owner occupied dwellings 2. 25 acres or more 3. Condominiums 4. PUDs and condominiums 2. 25 acres or more A Good Faith Estimate: 1. must be within $500 of the final costs. 2. is an estimate only and is not required to reflect the actual settlement costs. 3. should exhibit a reasonable relationship to the actual final settlement costs. 4. be within $1,000 of the final costs. 3. should exhibit a reasonable relationship to the actual final settlement costs. If a home is purchased with an FHA owner-occupied loan, what type of FHA refinance can the borrower use to refinance? 1. FNHMA 2. USFA 3. IRRRL 4. Streamline 4. Streamline Which of the following must be provided to the client on an ARM loan? 1. The "Consumer Handbook on Adjustable Rate Mortgages" 2. The "ARM Handbook" 3. "When Your Home is on the Line" 4. "Your Settlement Costs and You" booklet by HUD 1. The "Consumer Handbook on Adjustable Rate Mortgages"The CHARM booklet was prepared by: 1. the CFPB. 2. The Dept. of Housing and Urban Development. 3. The Federal Housing Administration. 4. The Federal Reserve Board. 4. The Federal Reserve Board. When is a loan not subject to RESPA? 1. When it's a primary residence 2. When it's a second residence 3. When the property is 25 acres or less 4. When the property will be used for a commercial purpose 4. When the property will be used for a commercial purpose The following two disclosures are required by RESPA, if applicable: 1. 1003 and AfBA 2. LE and AfBA 3. 1003 and 1008 4. Borrower's Signature Authorization and GFE 2. LE and AfBA Which of the following is responsible for determining the need for flood insurance? 1.The appraiser 2.The title company 3.The loan officer 4.The borrower 1.The appraiser How long is flood insurance required? 1.Until the next drought 2.For the first 5 years 3.For the life of the loan 4.Until the LTV is 78% or less 3.For the life of the loanWhat does HMDA stand for? 1.Home Mortgage Disclosure Act 2.Home Mortgage Disabilities Act 3.Housing Mortgage Disclosure Act 4.Home Mortgage Development Association 1.Home Mortgage Disclosure Act Which of the following are functions of FACTA? (Select all that apply) 1.To improve consumer access to credit information 2.To improve resolution of consumer disputes with credit agencies 3.To prevent identity theft and restore credit history to victims of identity theft 4.All of the above 4.All of the above What is the objective of FCRA? 1.To assure fairness, relevancy, confidentiality, and accuracy 2.To assure all borrowers have no access to credit information 3.To make sure that obsolete information cannot be deleted 4.Insure that credit reports are never seen by the borrower 1.To assure fairness, relevancy, confidentiality, and accuracy Under the FCRA, when must credit reporting agencies delete obsolete information? 1. 5 years from the date placed for collection or charged off 2. 10 years from the date opened, except for bankruptcies 3. 7 years from the date of last activity, except for bankruptcies 4. 7 years from the date of last activity including bankruptcies 3. 7 years from the date of last activity, except for bankruptcies Which is the only authorized site for obtaining your free credit report? 1. FreeCreditR 2. AnnualCreditR 3. FreeS4. CreditR 2. AnnualCreditR When is it legal and/or acceptable for the loan originator to provide the consumer with a copy of his/her credit report? 1. Never 2. When the customer pays for it 3. When the customer requests it 4. When contracts with the credit reporting agency do not prohibit it 4. When contracts with the credit reporting agency do not prohibit it The cost approach of an appraisal is used for all of the following EXCEPT: 1.To determine the cost of income, on a rental property ance. construction. el. 1.To determine the cost of income, on a rental property Regulation B does which of the following? 1. Protects a borrower from fraudulent use of their information 2. Requires Upfront Mortgage Insurance on all FHA loans 3. Provides equality in the extension of credit 4. Regulates advertising of APR 3. Provides equality in the extension of credit Who provides the Annual Escrow Account Disclosure Statement? 1.The Mortgage Loan Originator 2.The Broker 3.The Title Company 4.The Servicing Lender 4.The Servicing Lender When is an Affiliated Business Agreement required? 1.Always when there is a co-borrower/affiliate2.Only purchase loans 3.If an affiliated business is providing services 4.It is no longer required 3.If an affiliated business is pr