SAFE Mortgage Loan Originator Test (with Accurate Answers)

Prequalification correct answers an estimate of the loan amt. for which the buyer can qualify based on his income/credit under the lenders standards USDA ratio correct answers 29/41 FHA ratio correct answers 31/43 Asset based loan correct answers -loans based on borrowers equity -bad when lenders fail to consider ability to repay High Cost Loan correct answers Reg Z - Sec. 1026.32 -APR will exceed by more than 6.5% for first lien loans or by more than 8.5% for subordinate -APOR - average prime offer rate 1. 5% 2. 6.5% 3. 8.5% RESPA - Section 8 correct answers Nothing of value for referrals - No kickbacks Respa - Esign Act correct answers can use electronic signature with permission of borrower Gramm Leach Bliley correct answers -borrower notification must state who company shares info with -consumers can opt-out of info sharing (send notice to consumer) -Protects from phishing -Safeguard Rules Safeguard Rules correct answers -company and staff need to protect the consumers identity -lock up files -part of GLB act second mortgage correct answers -All money upfront -no escrow as long as first mortgage is paying it Subordination Clause correct answers A contract clause that puts a mortgage in the first lien position over an earlier recorded mortgage Denial Of License correct answers -any non-financial felony in the past 7 years -financial felony ever -financial misdemeanor (state decides) -License has been revoked in another state -default on a federal student loan