SAFE Mortgage Loan Originator Test
Questions & Answers
Homeowners Protection Act Correct Ans--Applies to 1-4 primary residence that has
mortgage insurance. (conventional only)
-80% LTV homeowner can request PMI drop
-78% LTV lender must drop PMI
Ability to Repay Correct Ans--Must have evidence proving borrower can repay
-borrower can sue up to 3 years after loan for interest and attorney fees as penalty
HOEPA Correct Ans-Reg Z
-Abusive lending
-predatory lending
-subprime lending
-negative amortization
-prepayment penalty
-equity stripping (refinance over and over)
Schedule C Correct Ans-Form
-Net Income for Self Employment
,MARs Prohibtions Correct Ans-Bans advance fees from mortgage relief services until
consumer has accepted a written offer from their lender
Alienation Clause Correct Ans-Contract clause that gives lender certain stated rights where
there is a transfer of ownership of the property
"due on sale clause"
Right to rescind Correct Ans-The right of a consumer to rescind any credit transaction except
the mortgage loan on the primary residence as collateral, up to midnight on the third business
day
-only available on refinance
-2 copies given to borrower
-20 days to refund fees
Fair Housing Act Correct Ans-Discrimination Categories
-sex, Race, color, religion, natl origin, familial status
Fiduciary duty Correct Ans--Lenders responsibility to put the interest of the borrower ahead
of their own compensation
conforming loan ratio Correct Ans-28/36
, Jumbo loan ratio Correct Ans-33/38-40
Unlimited Tolerance Correct Ans--prepaid interest
-insurance premiums
-escrow amount
-3rd party fees chosen by the borrower
non-conforming loans Correct Ans--jumbo
-heloc
-2nd and 3rd mortgages
-alt-a
Prequalification Correct Ans-an estimate of the loan amt. for which the buyer can qualify
based on his income/credit under the lenders standards
USDA ratio Correct Ans-29/41
FHA ratio Correct Ans-31/43
Asset based loan Correct Ans--loans based on borrowers equity
-bad when lenders fail to consider ability to repay
Questions & Answers
Homeowners Protection Act Correct Ans--Applies to 1-4 primary residence that has
mortgage insurance. (conventional only)
-80% LTV homeowner can request PMI drop
-78% LTV lender must drop PMI
Ability to Repay Correct Ans--Must have evidence proving borrower can repay
-borrower can sue up to 3 years after loan for interest and attorney fees as penalty
HOEPA Correct Ans-Reg Z
-Abusive lending
-predatory lending
-subprime lending
-negative amortization
-prepayment penalty
-equity stripping (refinance over and over)
Schedule C Correct Ans-Form
-Net Income for Self Employment
,MARs Prohibtions Correct Ans-Bans advance fees from mortgage relief services until
consumer has accepted a written offer from their lender
Alienation Clause Correct Ans-Contract clause that gives lender certain stated rights where
there is a transfer of ownership of the property
"due on sale clause"
Right to rescind Correct Ans-The right of a consumer to rescind any credit transaction except
the mortgage loan on the primary residence as collateral, up to midnight on the third business
day
-only available on refinance
-2 copies given to borrower
-20 days to refund fees
Fair Housing Act Correct Ans-Discrimination Categories
-sex, Race, color, religion, natl origin, familial status
Fiduciary duty Correct Ans--Lenders responsibility to put the interest of the borrower ahead
of their own compensation
conforming loan ratio Correct Ans-28/36
, Jumbo loan ratio Correct Ans-33/38-40
Unlimited Tolerance Correct Ans--prepaid interest
-insurance premiums
-escrow amount
-3rd party fees chosen by the borrower
non-conforming loans Correct Ans--jumbo
-heloc
-2nd and 3rd mortgages
-alt-a
Prequalification Correct Ans-an estimate of the loan amt. for which the buyer can qualify
based on his income/credit under the lenders standards
USDA ratio Correct Ans-29/41
FHA ratio Correct Ans-31/43
Asset based loan Correct Ans--loans based on borrowers equity
-bad when lenders fail to consider ability to repay
