Loan Originator Exam UPDATED
Exam Questions and CORRECT
Answers
Section 32 of TILA - CORRECT ANSWER - Deals with consumer protection triggered by high
cost loan scenarios. Deals with added provisions and protections that are required if a loan trips
one of two thresholds, or both.
1) Points of fee thresholds
2) APR thresholds
Section 10 of RESPA - CORRECT ANSWER - 1) Includes provisions so that the borrower is
informed about the amounts taken for an escrow account and also protects the borrower from
being overcharged by requiring an escrow amount analysis
2) Refunds of over $50 must be made withing 30 days
3) Violations
Section 8 of RESPA - CORRECT ANSWER - Includes prohibitions in giving or receiving
anything of value i.e. referral fees
Section 6 of RESPA - CORRECT ANSWER - Includes provisions to ensure that borrowers
have adequate notice when their loan servicing is transferred to another institution and
establishes protocol for managing consumer complaints about the servicing of their loans. The
disclosure required by this section is the Servicing Transfer Statement.The existing servicer
must notify the borrower at least 15 days prior to servicing change.
Real Estate Fees - CORRECT ANSWER - Are only listed in the HUD-1
APR - CORRECT ANSWER - Actual Percentage Rate, found in TIL Disclosure, must be
given at least 7 bus days prior to closing.
Mortgage Fraud - CORRECT ANSWER - Two types:
,1) Fraud for Profit
,2) Fraud for Housing
MDIA - CORRECT ANSWER - Mortgage Disclosure Improvement Act, establishes that
no fee can be charged to a consumer except the credit reporting fee. Requires that the borrower
receives the TIL Disclosure within 3 bus days of app and at least 7 bus days of closing
FTC - CORRECT ANSWER - Federal Trade Commission: is responsible for enforcing
violations as a result of interstate calls
TILA Required Disclosures - CORRECT ANSWER - 1) Right to Rescind
2) CHARM Booklet
3) Early Arm Disclosure
Years on the Job - CORRECT ANSWER - Is not considered unlawful when applying for
credit approval, it cannot be discriminatory.
Mortgage Service Disclosure Statement - CORRECT ANSWER - Intended to inform the
borrower of the likelihood of their lender servicing a loan, intended only for 1st-lien mortgages.
is required by RESPA for:
1) Refinance
2) An interest only ARM used to purchase a new construction
3) Purchase of Primary residence
Is not required for:
1) HELOC
HPA Applies To.. - CORRECT ANSWER - 1) Loan servicers
2) Lenders
3) Mortgage Insurance
Companies Does not apply to:
, 1) Appraisers
S.A.F.E Act Rollback Hours for Continuing Education - CORRECT ANSWER - Is 0,
continuing education hours cannot count towards the next year's hours
Under GLB - CORRECT - Stricter standards apply to the customer than the
ANSWER consumer
An Affiliated Business Disclosure - CORRECT - 1) Statement that is required
ANSWER by RESPA
2) Is only required if the referred party is owned by or has an affiliated relationship with the
referring party, must be due at the time of the referral was made
Loan Exempt from HPA - CORRECT ANSWER - FHA: Because they use Mortgage
Insurance Premiums ( MIP), and are therefore not covered by HPA who use PMI
RESPA Loans Not Covered.. - CORRECT ANSWER - RESPA does not cover commercial
loans, i.e. using an SBA loan to purchase a multi-use warehouse loans of 25+ acres
Oversight Of FCRA - CORRECT ANSWER - FTC oversees the FCRA
Permissible fees under RESPA - CORRECT ANSWER - 1) Mortgage Broker Fees
2) Credit Reporting Fees
3) Rate Lock fee
Non permissible: HUD-1 Prep fee
ECOA - CORRECT ANSWER - Applies to any person who regularly extends, renews,
continues credit, or a person who regularly refers applicants to creditors, or selects or offers
to select creditors to whom requests for credit can be made
Exam Questions and CORRECT
Answers
Section 32 of TILA - CORRECT ANSWER - Deals with consumer protection triggered by high
cost loan scenarios. Deals with added provisions and protections that are required if a loan trips
one of two thresholds, or both.
1) Points of fee thresholds
2) APR thresholds
Section 10 of RESPA - CORRECT ANSWER - 1) Includes provisions so that the borrower is
informed about the amounts taken for an escrow account and also protects the borrower from
being overcharged by requiring an escrow amount analysis
2) Refunds of over $50 must be made withing 30 days
3) Violations
Section 8 of RESPA - CORRECT ANSWER - Includes prohibitions in giving or receiving
anything of value i.e. referral fees
Section 6 of RESPA - CORRECT ANSWER - Includes provisions to ensure that borrowers
have adequate notice when their loan servicing is transferred to another institution and
establishes protocol for managing consumer complaints about the servicing of their loans. The
disclosure required by this section is the Servicing Transfer Statement.The existing servicer
must notify the borrower at least 15 days prior to servicing change.
Real Estate Fees - CORRECT ANSWER - Are only listed in the HUD-1
APR - CORRECT ANSWER - Actual Percentage Rate, found in TIL Disclosure, must be
given at least 7 bus days prior to closing.
Mortgage Fraud - CORRECT ANSWER - Two types:
,1) Fraud for Profit
,2) Fraud for Housing
MDIA - CORRECT ANSWER - Mortgage Disclosure Improvement Act, establishes that
no fee can be charged to a consumer except the credit reporting fee. Requires that the borrower
receives the TIL Disclosure within 3 bus days of app and at least 7 bus days of closing
FTC - CORRECT ANSWER - Federal Trade Commission: is responsible for enforcing
violations as a result of interstate calls
TILA Required Disclosures - CORRECT ANSWER - 1) Right to Rescind
2) CHARM Booklet
3) Early Arm Disclosure
Years on the Job - CORRECT ANSWER - Is not considered unlawful when applying for
credit approval, it cannot be discriminatory.
Mortgage Service Disclosure Statement - CORRECT ANSWER - Intended to inform the
borrower of the likelihood of their lender servicing a loan, intended only for 1st-lien mortgages.
is required by RESPA for:
1) Refinance
2) An interest only ARM used to purchase a new construction
3) Purchase of Primary residence
Is not required for:
1) HELOC
HPA Applies To.. - CORRECT ANSWER - 1) Loan servicers
2) Lenders
3) Mortgage Insurance
Companies Does not apply to:
, 1) Appraisers
S.A.F.E Act Rollback Hours for Continuing Education - CORRECT ANSWER - Is 0,
continuing education hours cannot count towards the next year's hours
Under GLB - CORRECT - Stricter standards apply to the customer than the
ANSWER consumer
An Affiliated Business Disclosure - CORRECT - 1) Statement that is required
ANSWER by RESPA
2) Is only required if the referred party is owned by or has an affiliated relationship with the
referring party, must be due at the time of the referral was made
Loan Exempt from HPA - CORRECT ANSWER - FHA: Because they use Mortgage
Insurance Premiums ( MIP), and are therefore not covered by HPA who use PMI
RESPA Loans Not Covered.. - CORRECT ANSWER - RESPA does not cover commercial
loans, i.e. using an SBA loan to purchase a multi-use warehouse loans of 25+ acres
Oversight Of FCRA - CORRECT ANSWER - FTC oversees the FCRA
Permissible fees under RESPA - CORRECT ANSWER - 1) Mortgage Broker Fees
2) Credit Reporting Fees
3) Rate Lock fee
Non permissible: HUD-1 Prep fee
ECOA - CORRECT ANSWER - Applies to any person who regularly extends, renews,
continues credit, or a person who regularly refers applicants to creditors, or selects or offers
to select creditors to whom requests for credit can be made
