SAFE Mortgage Loan Originator Test - National Component with Uniform State Content Exam Questions With Verified Answers

SAFE Mortgage Loan Originator Test - National Component with Uniform State Content Exam Questions With Verified Answers What does UST stand for? - answerUniform State Test Who does the CFPB protect? - answerThe Consumer Financial Protection Bureau protects consumers in the financial marketplace. What does the CFPB do? - answerCFPB is now in charge of implementing and enforcing most of the provisions of federal lending laws that relate to protecting consumers while they are shopping for, securing, and paying off mortgages. What is the purpose of RESPA? (3 things) - answera.Protect consumers from excessive settlement costs and unearned fees b.Limit the amount of funds that creditors can require consumers to deposit into escrow accounts c.Establish disclosures, policies, and procedures to facilitate timely communications between loan servicers and consumers Who is responsible for the enforcement of RESPA and for issuing implementing regulations? - answerThe CFPB What are RESPA's regulations called? - answerRegulation X Which 2 documents replaced RESPA's Good Faith Estimate and the Truth-in-Lending Disclosure? - answer1.) Loan Estimate 2.) Closing Disclosure What types of mortgages does RESPA cover? - answer"Federally-related mortgage loans," the requirements of RESPA apply to virtually every home loan secured by a mortgage. What type of loans does RESPA not pertain to? - answera. Loans for business, commercial, or agricultural purposes b. Temporary financing c. Loans secured by vacant land d. The sale of a loan into the secondary market e. Loan conversions (same note - new terms) Is compensating someone for a referral legal? - answerNo!!! What is "borrower credit"? - answerHistorically referred to as "yield spread premium" (YSP), the borrower credit is a fee paid to the borrower by the lender when a loan is originated at a higher interest rate than the lowest rate for which the borrower qualifies. The borrower credit is used to subsidize closing costs, such as the origination or broker fee, because it is financed so that out-of-pocket closing costs are "borrowed" from the lender. What is a markup? - answerA unilateral increase in the cost of a settlement service and retention of the additional fee by the party making the markup. The controversy over markups and their legality is discussed in a subsequent course section. As a practice that may easily lead to litigation, it is one that should not be used without obtaining legal advice. What are the 5 disclosures required by RESPA? - answer1.) Loan Estimate 2.) Closing Disclosure 3.) Settlement Cost Information Booklet 4.) Mortgage Servicing Disclosure Statement 5.) Affiliated Business Arrangement Disclosure Are creditors allowed to add their name to the cover of the Special Information Booklet sent to borrowers? - answerYes Are they allowed to translate it into other languages? - answerYes Are they allowed to send it with other materials in a larger document? - answerNo For a loan with a co-borrower, must each applicant receive a Special Information Booklet? - answerNo, only one person has to receive. After a loan application is submitted, how many business days later must a borrower receive their Special Information Booklet? - answer3 days (for purchase only) When is a Special Information Booklet not required to be sent? (3 answers) - answer1.) A refinance 2.) A closed-end loan secured by a subordinate lien 3.) A reverse mortgage loan How long does RESPA require a lender to keep each Affiliated Business Arrangement disclosure? - answer5 years If a MLO recommends a particular settlement service provider over the phone, in how many days must a borrower receive a disclosure in the mail? - answer3 business days If a settlement service provider refers a loan applicant to an affiliated business for settlement services, he or she must disclose the affiliated business arrangement...? - answerAt the time the referral is made. On which document does the lender specify if he will service the loan or sell the servicing to someone else? - answerOn the Loan Estimate RESPA and Regulation X still impose a requirement on servicers to provide notice to consumers of any assignment, sale, or transfer of servicing. How many days before a switch, must a servicer disclose that a switch will occur? - answer15 days How many months cushion can a servicer require a borrower to keep in his/her escrow account? - answerone sixth of the estimated total annual disbursements = 2 months payments If there is a surplus in excess of 2 months required disbursements in one's escrow account by $45 dollars, must it be returned to the borrower? - answerNo, it will be credited to next year. Only funds equal to or in excess of $50 must be returned. What are the 2 mandatory escrow account disclosures? - answer1.) the initial escrow statement and 2.) the annual escrow statement. When is the initial escrow statement required to be given to the borrower, and what must it include? - answerWhile this disclosure is typically given at settlement, the lender has 45 days from settlement to deliver it. The initial escrow statement must show: 1.) The amount of the borrower's mortgage payment and the portion that is deposited into the escrow account 2.) Itemized taxes, insurance, and other payments to be made from the escrow account during the computation year