NMLS SAFE EXAM 2022
What does TILA stand for? - ANSTruth-In-Lending Act, Regulation Z
What is a HELOC loan? - ANSa secured loan in that you are borrowing against the equity
that has been built in your house
What is a REFI loan? - ANS
LTV stands for - ANSLoan to Value
Define PMI and state what the acronym stands for. - ANSPrivate mortgage insurance- on
conventional loans
Define one time variable funding fee and people in what situations is it waived for? -
ANSDisabled veterans and surviving spouses.
USDA loans are also called what? - ANS502 loans
Define MIP - ANSCan be paid up front or in installments. Mortgage insurance premium used
by FHA to protect themselves against higher-risk borrowers who are more likely to default on
loans
Define APR - ANSannual percentage rate
Define APOR - ANSaverage prime offer rate
Define HPML - ANSHigh price mortgage loans or Section 35 loans. A mortgage with an
annual percentage rate (APR) that's higher than the average prime offer rate (APOR)
When is a loan considered to be a section 35 loan? (High price mortgage loan) - ANS- When
the APR exceeds APOR by 1.5% on a first lien, 2.5% on Jumbo first lien or 3.5% on
subordinate lien
What requirements are placed on section 35 loans? (High price mortgage loans) - ANSAPE
A- ATR / ability to repay
P- no PREPAYMENT penalty unless in the first 2 years
E- requires ESCROW of the taxes and hazard insurance for the first 5 years
Define ATR - ANSAbility to repay
8 Factors of ATR - ANSMICE DOES
M- Monthly mortgage
I- Income + assets
C- Credit history
, E- Employment
D- Debt to Income Ratio
O- Other debts
E- Expenses
S- Simultaneous mortgage
What are section 32 loans? - ANSHigh cost mortgage loans. Considered to be HCML when
APR exceeds APOR by 6.5% on first lien on loan $50,000 or higher, or 8.5% on first lien on
a loan that's less than $50,000 or 8.5% on subordinate lien.
What requirements are placed on Section 32 loans / HCML / High cost mortgage loans? -
ANSBAPS
B- no BALLOON payment
A- must have ATR
P- no PREPAYMENT PENALTY
S- must SPEAK to a HUD counselor
What makes a complete application? - ANSALIENS
A- Address
L- Loan amount
I- Income
E- Estimated value
N- Name
S- Social security number
What is a 1003 and a 1004 form? - ANSURLA - Uniform Residential Loan Application
and
URAR - Uniform Residential Appraisal Report
What is a 1005 and 1006 form? - ANSVOE - Verification of employment
and
VOD - Verification of deposits (bank balance)
What is a 1008 form? - ANSTransmittal summary. Top sheet! SUMMARY
What are the protected classes under ECOA AND Fair Housing Act? - ANS- Sex
- Color
- National origin
- Race
Religion
What are the protected classes that are under ECOA but NOT Fair Housing Act? - ANS-
Maritial status
- Age
- Public assistance
What are the protected classes that are under Fair Housing Act but NOT ECOA? - ANS-
Familial status
What does TILA stand for? - ANSTruth-In-Lending Act, Regulation Z
What is a HELOC loan? - ANSa secured loan in that you are borrowing against the equity
that has been built in your house
What is a REFI loan? - ANS
LTV stands for - ANSLoan to Value
Define PMI and state what the acronym stands for. - ANSPrivate mortgage insurance- on
conventional loans
Define one time variable funding fee and people in what situations is it waived for? -
ANSDisabled veterans and surviving spouses.
USDA loans are also called what? - ANS502 loans
Define MIP - ANSCan be paid up front or in installments. Mortgage insurance premium used
by FHA to protect themselves against higher-risk borrowers who are more likely to default on
loans
Define APR - ANSannual percentage rate
Define APOR - ANSaverage prime offer rate
Define HPML - ANSHigh price mortgage loans or Section 35 loans. A mortgage with an
annual percentage rate (APR) that's higher than the average prime offer rate (APOR)
When is a loan considered to be a section 35 loan? (High price mortgage loan) - ANS- When
the APR exceeds APOR by 1.5% on a first lien, 2.5% on Jumbo first lien or 3.5% on
subordinate lien
What requirements are placed on section 35 loans? (High price mortgage loans) - ANSAPE
A- ATR / ability to repay
P- no PREPAYMENT penalty unless in the first 2 years
E- requires ESCROW of the taxes and hazard insurance for the first 5 years
Define ATR - ANSAbility to repay
8 Factors of ATR - ANSMICE DOES
M- Monthly mortgage
I- Income + assets
C- Credit history
, E- Employment
D- Debt to Income Ratio
O- Other debts
E- Expenses
S- Simultaneous mortgage
What are section 32 loans? - ANSHigh cost mortgage loans. Considered to be HCML when
APR exceeds APOR by 6.5% on first lien on loan $50,000 or higher, or 8.5% on first lien on
a loan that's less than $50,000 or 8.5% on subordinate lien.
What requirements are placed on Section 32 loans / HCML / High cost mortgage loans? -
ANSBAPS
B- no BALLOON payment
A- must have ATR
P- no PREPAYMENT PENALTY
S- must SPEAK to a HUD counselor
What makes a complete application? - ANSALIENS
A- Address
L- Loan amount
I- Income
E- Estimated value
N- Name
S- Social security number
What is a 1003 and a 1004 form? - ANSURLA - Uniform Residential Loan Application
and
URAR - Uniform Residential Appraisal Report
What is a 1005 and 1006 form? - ANSVOE - Verification of employment
and
VOD - Verification of deposits (bank balance)
What is a 1008 form? - ANSTransmittal summary. Top sheet! SUMMARY
What are the protected classes under ECOA AND Fair Housing Act? - ANS- Sex
- Color
- National origin
- Race
Religion
What are the protected classes that are under ECOA but NOT Fair Housing Act? - ANS-
Maritial status
- Age
- Public assistance
What are the protected classes that are under Fair Housing Act but NOT ECOA? - ANS-
Familial status
