NMLS SAFE Exam Study Guide correctly
answered already passed
Regulation Z - correct answer ✔✔Enforced by Consumer Financial Protection Bureau (CFPB),
covers the Consumer Protection Act and the Truth in Lending Act (TILA)
Consumer Protection Act - correct answer ✔✔Disclosures of terms of credit
Truth in Lending Act (TILA) - correct answer ✔✔Enforced by the Federal Reserve System, must
contain nominal interest rates, loan points and discount points, finance charges, amount
financed, annual percentage rate (APR)
Nominal Interest Rate - correct answer ✔✔Interest rate specified in the promissory note, which
is the rate at which monthly payments are computed
Loan points and discount points - correct answer ✔✔Fees paid in advance to reduce nominal
interest rate and are also expressed as a percentage of the loan amount, they are expressed and
a percentage.
Finance charge - correct answer ✔✔Fees paid up front for the loan: Interest cost of the loan,
loan origination fees, loan points and discount points, and mortgage insurance premiums
Amount Financed - correct answer ✔✔Loan amount plus any fees financed by the lender (ex
UFMIP) minus any fees deducted from the loan amount such as discount points
Annual Percentage Rate (APR) - correct answer ✔✔The annual cost of credit expressed in
percentage terms (the total amount of all expenses used to finance the loan)
, Regulation X - correct answer ✔✔Enforced by The Consumer Financial Protection Bureau
(CFPB), covers the Real Estate Settlement Procedures Act (RESPA)
Real Estate Settlement Procedures Act (RESPA) - correct answer ✔✔Allows consumers to shop
for settlement services by providing extensive disclosures regarding settlement costs, prevents
kickbacks and referral fees, limits escrow fees for payments of property tax, hazard insurance
and such, and prohibits sellers from requiring a certain title company
Disclosures covered by RESPA - correct answer ✔✔Transfer of Service Disclosure, Good Faith
Estimate, Special Information Booklet, Mortgage Servicing Disclosures Statement
Home Ownership Equity Protection Act (HOEPA) - correct answer ✔✔Amended through TILA
enforced by CFPB for depositary lenders and attorney general of each other the states. Prohibits
a number of unfair lending practices and have two different levels of loans that trigger special
rules: High-Priced Mortgage Loans (HPMLS) and High-Cost Loans (Section 32)
Higher Priced Mortgage Loans (HPMLS) - correct answer ✔✔For first mortgages, if the APR of
the loan exceeds 1.5% above the Average Prime Offer Rate (APOR) as of the date of the rate
lock, for subordinate liens if the APR of the loan exceeds 3.5% above the Average Prime Offer
Rate as of the date of the rate lock
Subordinate liens - correct answer ✔✔Second mortgages
High Cost (section 32) Loans - correct answer ✔✔For first mortgage loans, if the APR of the loan
exceeds the APOR by more than 6.5%, for junior loans if the APR of the loan exceeds the APOR
by more than 8.5%, or if the total points and fees exceed 5% of es loan amount, if there is
prepayment penalty that applies either for more than 36 months after the consummation of the
loan or which exceeds (in total) 2% of the amount of the payment
LIBOR - correct answer ✔✔Index
answered already passed
Regulation Z - correct answer ✔✔Enforced by Consumer Financial Protection Bureau (CFPB),
covers the Consumer Protection Act and the Truth in Lending Act (TILA)
Consumer Protection Act - correct answer ✔✔Disclosures of terms of credit
Truth in Lending Act (TILA) - correct answer ✔✔Enforced by the Federal Reserve System, must
contain nominal interest rates, loan points and discount points, finance charges, amount
financed, annual percentage rate (APR)
Nominal Interest Rate - correct answer ✔✔Interest rate specified in the promissory note, which
is the rate at which monthly payments are computed
Loan points and discount points - correct answer ✔✔Fees paid in advance to reduce nominal
interest rate and are also expressed as a percentage of the loan amount, they are expressed and
a percentage.
Finance charge - correct answer ✔✔Fees paid up front for the loan: Interest cost of the loan,
loan origination fees, loan points and discount points, and mortgage insurance premiums
Amount Financed - correct answer ✔✔Loan amount plus any fees financed by the lender (ex
UFMIP) minus any fees deducted from the loan amount such as discount points
Annual Percentage Rate (APR) - correct answer ✔✔The annual cost of credit expressed in
percentage terms (the total amount of all expenses used to finance the loan)
, Regulation X - correct answer ✔✔Enforced by The Consumer Financial Protection Bureau
(CFPB), covers the Real Estate Settlement Procedures Act (RESPA)
Real Estate Settlement Procedures Act (RESPA) - correct answer ✔✔Allows consumers to shop
for settlement services by providing extensive disclosures regarding settlement costs, prevents
kickbacks and referral fees, limits escrow fees for payments of property tax, hazard insurance
and such, and prohibits sellers from requiring a certain title company
Disclosures covered by RESPA - correct answer ✔✔Transfer of Service Disclosure, Good Faith
Estimate, Special Information Booklet, Mortgage Servicing Disclosures Statement
Home Ownership Equity Protection Act (HOEPA) - correct answer ✔✔Amended through TILA
enforced by CFPB for depositary lenders and attorney general of each other the states. Prohibits
a number of unfair lending practices and have two different levels of loans that trigger special
rules: High-Priced Mortgage Loans (HPMLS) and High-Cost Loans (Section 32)
Higher Priced Mortgage Loans (HPMLS) - correct answer ✔✔For first mortgages, if the APR of
the loan exceeds 1.5% above the Average Prime Offer Rate (APOR) as of the date of the rate
lock, for subordinate liens if the APR of the loan exceeds 3.5% above the Average Prime Offer
Rate as of the date of the rate lock
Subordinate liens - correct answer ✔✔Second mortgages
High Cost (section 32) Loans - correct answer ✔✔For first mortgage loans, if the APR of the loan
exceeds the APOR by more than 6.5%, for junior loans if the APR of the loan exceeds the APOR
by more than 8.5%, or if the total points and fees exceed 5% of es loan amount, if there is
prepayment penalty that applies either for more than 36 months after the consummation of the
loan or which exceeds (in total) 2% of the amount of the payment
LIBOR - correct answer ✔✔Index
