NMLS TEST FINAL EXAM 2 VERSIONS (VERSION A AND B)
WITH QUESTIONS AND ANSWERS (VERIFIED ANSWERS
GRADED A+) LATEST UPDATE 2024/2025
How long should you keep mortgage loan records under ECOA? -
CORRECT ANSWER 25 months
How long is the Do Not Call Registry good? - CORRECT ANSWER
When the number is disconnected, reassigned, or when the consumer
chooses to remove it
How many months cushion are allowed under the escrow account rules?
- CORRECT ANSWER 2 months cushion
When are escrow accounts reviewed and what amount of overage could
cause a refund to the borrower? - CORRECT ANSWER Renewed
annually and if the account has more than $50 in overage it will be
refunded
What properties are covered under RESPA? - CORRECT ANSWER
Single, 1-4 family dwellings, condos, and manufactured homes placed
on a lot
RESPA imposes restriction on ___________? - CORRECT ANSWER
Amount collected for escrow accounts
,When advertising, the APR must be present when __________? -
CORRECT ANSWER A rate is quoted or present
RESPA was put in place to? - CORRECT ANSWER Limit amounts in
escrow, eliminate kickbacks , and educate the borrowers on the closing
cost, it does NOT regulate interest rates
According to RESPA guidelines, failure to comply with Section 8 could
result in a penalty of? - CORRECT ANSWER $10,000 and/or 1 year
prison terms for each incident
Redlining is best defined as: - CORRECT ANSWER Failing to end to
certain geographic areas
Who created and monitors a companies Red Flag Rules? - CORRECT
ANSWER Federal Trade Commission (FTC Red Flag Rules)
At what point in a conventional will the PMI be removed? - CORRECT
ANSWER When the principal balance reaches 78% of the original value
or purchase price
When does a referring party have to provide the ABA form to the
borrower? - CORRECT ANSWER Before or at the time of the referral
Advertising a mortgage loan product that a lender is not able to offer is a
violation of what federal law? - CORRECT ANSWER TILA/reg Z
,What is the Act that requires a financial entity to provide customers with
a privacy notice, as well as an "opt out notice", regarding the customer's
personal information? - CORRECT ANSWER Gramm-Leach Bliley
Act
Under the GLB Act, nonpublic information can only be shared with
affiliates of the financial institution or affiliates of related third parties,
even if the customer does not opt out. (T/F) - CORRECT ANSWER
TRUE
What information must be provided to the borrower when referrals take
place between affiliated businesses? - CORRECT ANSWER An
Affiliated Business Disclosure Statement as mandated by RESPA
What is the primary purpose of the Gramm-Leach Bliley Act? -
CORRECT ANSWER Notice of right to financial privacy and right to
opt out of sharing personal information
Along with the Fair and Accurate Credit Transactions Act Disposal Rule,
what GLB Act provision ensures that customer's information is not
handled or maintained carelessly and is disposed of properly? -
CORRECT ANSWER GLB Act's Safeguards rule
What is the difference between the GLB Act Safeguards Rule and the
FACT Act Disposal Rule? - CORRECT ANSWER GLB Act's
Safeguards Rule requires all companies to design, implement, and
maintain safeguards to protect customer information from theft... FACT
, Act requires businesses to take appropriate measures to safeguard from
theft in the disposal of consumer report
What is a "Federally Related Loan"? - CORRECT ANSWER Loans
secured by a first or subordinate lien on a residential property that meets
stated RESPA criteria. The definition is so broad it covers virtually every
home loan secured by a mortgage.
Most of HUD's enforcement actions result due to section 8 of RESPA.
What is addressed in Section 8? - CORRECT ANSWER Prohibited
against giving or receiving a fee, kickback, or anything of value pursuant
to an agreement or understanding for the referral of settlement business
What is an affiliated business arrangement? - CORRECT ANSWER
An arrangement in which one person refers applicants to a settlement
service provider with whom the referring person has an ownership
interest of 1% or more
What customer protection does Section 10 of RESPA provide? -
CORRECT ANSWER Protect consumers by ensuring borrowers know
the amount they are to deposit into escrow by preventing lenders from
overcharging borrowers for escrow deposits
What are the consequences for violating Section 8 of RESPA? -
CORRECT ANSWER Up to $10,000 and/or one year in prison
WITH QUESTIONS AND ANSWERS (VERIFIED ANSWERS
GRADED A+) LATEST UPDATE 2024/2025
How long should you keep mortgage loan records under ECOA? -
CORRECT ANSWER 25 months
How long is the Do Not Call Registry good? - CORRECT ANSWER
When the number is disconnected, reassigned, or when the consumer
chooses to remove it
How many months cushion are allowed under the escrow account rules?
- CORRECT ANSWER 2 months cushion
When are escrow accounts reviewed and what amount of overage could
cause a refund to the borrower? - CORRECT ANSWER Renewed
annually and if the account has more than $50 in overage it will be
refunded
What properties are covered under RESPA? - CORRECT ANSWER
Single, 1-4 family dwellings, condos, and manufactured homes placed
on a lot
RESPA imposes restriction on ___________? - CORRECT ANSWER
Amount collected for escrow accounts
,When advertising, the APR must be present when __________? -
CORRECT ANSWER A rate is quoted or present
RESPA was put in place to? - CORRECT ANSWER Limit amounts in
escrow, eliminate kickbacks , and educate the borrowers on the closing
cost, it does NOT regulate interest rates
According to RESPA guidelines, failure to comply with Section 8 could
result in a penalty of? - CORRECT ANSWER $10,000 and/or 1 year
prison terms for each incident
Redlining is best defined as: - CORRECT ANSWER Failing to end to
certain geographic areas
Who created and monitors a companies Red Flag Rules? - CORRECT
ANSWER Federal Trade Commission (FTC Red Flag Rules)
At what point in a conventional will the PMI be removed? - CORRECT
ANSWER When the principal balance reaches 78% of the original value
or purchase price
When does a referring party have to provide the ABA form to the
borrower? - CORRECT ANSWER Before or at the time of the referral
Advertising a mortgage loan product that a lender is not able to offer is a
violation of what federal law? - CORRECT ANSWER TILA/reg Z
,What is the Act that requires a financial entity to provide customers with
a privacy notice, as well as an "opt out notice", regarding the customer's
personal information? - CORRECT ANSWER Gramm-Leach Bliley
Act
Under the GLB Act, nonpublic information can only be shared with
affiliates of the financial institution or affiliates of related third parties,
even if the customer does not opt out. (T/F) - CORRECT ANSWER
TRUE
What information must be provided to the borrower when referrals take
place between affiliated businesses? - CORRECT ANSWER An
Affiliated Business Disclosure Statement as mandated by RESPA
What is the primary purpose of the Gramm-Leach Bliley Act? -
CORRECT ANSWER Notice of right to financial privacy and right to
opt out of sharing personal information
Along with the Fair and Accurate Credit Transactions Act Disposal Rule,
what GLB Act provision ensures that customer's information is not
handled or maintained carelessly and is disposed of properly? -
CORRECT ANSWER GLB Act's Safeguards rule
What is the difference between the GLB Act Safeguards Rule and the
FACT Act Disposal Rule? - CORRECT ANSWER GLB Act's
Safeguards Rule requires all companies to design, implement, and
maintain safeguards to protect customer information from theft... FACT
, Act requires businesses to take appropriate measures to safeguard from
theft in the disposal of consumer report
What is a "Federally Related Loan"? - CORRECT ANSWER Loans
secured by a first or subordinate lien on a residential property that meets
stated RESPA criteria. The definition is so broad it covers virtually every
home loan secured by a mortgage.
Most of HUD's enforcement actions result due to section 8 of RESPA.
What is addressed in Section 8? - CORRECT ANSWER Prohibited
against giving or receiving a fee, kickback, or anything of value pursuant
to an agreement or understanding for the referral of settlement business
What is an affiliated business arrangement? - CORRECT ANSWER
An arrangement in which one person refers applicants to a settlement
service provider with whom the referring person has an ownership
interest of 1% or more
What customer protection does Section 10 of RESPA provide? -
CORRECT ANSWER Protect consumers by ensuring borrowers know
the amount they are to deposit into escrow by preventing lenders from
overcharging borrowers for escrow deposits
What are the consequences for violating Section 8 of RESPA? -
CORRECT ANSWER Up to $10,000 and/or one year in prison
