RMLO Exam Prep: General Study Guide
questions correctly answered to pass
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) - correct answer
✔✔Regulation X
Consumer protection statute
Three (3) Purposes of RESPA - correct answer ✔✔1. To protect consumers by
assisting them in becoming better educated and requiring lenders to provide
borrowers with pertinent and timely disclosures regarding the nature and costs of
the settlement process
2. To protect consumers from excessive settlement costs and unearned fees
3. To protect consumers by limiting the amounts that homebuyers are required to
put into escrow accounts
Loans Covered By RESPA - correct answer ✔✔Applicable to all federally related
mortgage loans that satisfy the following two criteria:
1. The loan is secured by a first or subordinate lien on residential property, on
which either:
- A one to four family structure is located or is to be constructed
,- A manufactured home is located or is to be placed.
2. The loan falls within one of the following catagories:
- Loans made by a lender, creditor, or dealer
- Loans made with collateral insured by an agency of the federal government
- Loans made in connection with a HUD program administered by a federal
agency (FHA, ect)
- Loans made and intended to be sold by the originating lender to: FNMA, GNMA,
FHLMC
- Loans that are the subject of a Home-Equity Conversion Mortgage (HECM) or
reverse mortgage issued by a lender
Loans Exempt From RESPA - correct answer ✔✔1. Secured by Parcels of 25 acres
or more, whether or not the property is improved
2. Used primarily for business , commercial , or agricultural
3. Temporary loans, such as construction loans
(The exemption DOES NOT apply if the loan is used as, or may be converted to,
permanent financing by the same financial institution)
4. Secured by vacant or unimproved property when none of the loan proceeds will
be used to construct a one to four family residential structure
,5. Assumptions of existing mortgages in which the lender has no right to approve
subsequent persons as borrowers
6. Conversions of federally related mortgage loans to different terms with the
original mortgage instrument, as long as a new note is not required
7. Bona fide transfers of loan obligations in the secondary market
Application As Defined Under RESPA - correct answer ✔✔(P E N C I L)
1. Property address
2. Estimated value of the property
3. Name of borrower
4. Credit report, need social security number
5. Income of borrower, monthly
6. Loan amount
RESPA - Disclosures At The Time of Application (General Rule) - correct answer
✔✔Disclosures a creditor must mail to the borrower, if not given at the time of
, application, within three (3) business days of receipt of the loan application the
following:
1. Special Information Booklet
2 . Good Faith Estimate / Loan Estimate
3. Mortgage Servicing Disclosure Statement
4. List of Homeownership Counseling Organizations
If the documents are mailed to the applicant , the applicant is considered to have
received them 3 calendar days after they are mailed.
RESPA - Disclosures At The Time of Application (Special Information Booklet) -
correct answer ✔✔Titled: Your Home Loan Toolkit: A Step by Step Guide
Designed to be used in connection with the Loan Estimate and Closing Disclosure
forms
RESPA - Disclosures At The Time of Application (Special Information Booklet -
HELOC Only) - correct answer ✔✔Booklet to provide INSTEAD of the Special
Information Booklet: "When Your Home Is On The Line: What You Should Know
About Home Equity Lines of Credit"
RESPA - Disclosures At The Time of Application (Good Faith Estimate - GFE) -
correct answer ✔✔Disclosure form used for Reverse Mortgage Transactions
questions correctly answered to pass
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) - correct answer
✔✔Regulation X
Consumer protection statute
Three (3) Purposes of RESPA - correct answer ✔✔1. To protect consumers by
assisting them in becoming better educated and requiring lenders to provide
borrowers with pertinent and timely disclosures regarding the nature and costs of
the settlement process
2. To protect consumers from excessive settlement costs and unearned fees
3. To protect consumers by limiting the amounts that homebuyers are required to
put into escrow accounts
Loans Covered By RESPA - correct answer ✔✔Applicable to all federally related
mortgage loans that satisfy the following two criteria:
1. The loan is secured by a first or subordinate lien on residential property, on
which either:
- A one to four family structure is located or is to be constructed
,- A manufactured home is located or is to be placed.
2. The loan falls within one of the following catagories:
- Loans made by a lender, creditor, or dealer
- Loans made with collateral insured by an agency of the federal government
- Loans made in connection with a HUD program administered by a federal
agency (FHA, ect)
- Loans made and intended to be sold by the originating lender to: FNMA, GNMA,
FHLMC
- Loans that are the subject of a Home-Equity Conversion Mortgage (HECM) or
reverse mortgage issued by a lender
Loans Exempt From RESPA - correct answer ✔✔1. Secured by Parcels of 25 acres
or more, whether or not the property is improved
2. Used primarily for business , commercial , or agricultural
3. Temporary loans, such as construction loans
(The exemption DOES NOT apply if the loan is used as, or may be converted to,
permanent financing by the same financial institution)
4. Secured by vacant or unimproved property when none of the loan proceeds will
be used to construct a one to four family residential structure
,5. Assumptions of existing mortgages in which the lender has no right to approve
subsequent persons as borrowers
6. Conversions of federally related mortgage loans to different terms with the
original mortgage instrument, as long as a new note is not required
7. Bona fide transfers of loan obligations in the secondary market
Application As Defined Under RESPA - correct answer ✔✔(P E N C I L)
1. Property address
2. Estimated value of the property
3. Name of borrower
4. Credit report, need social security number
5. Income of borrower, monthly
6. Loan amount
RESPA - Disclosures At The Time of Application (General Rule) - correct answer
✔✔Disclosures a creditor must mail to the borrower, if not given at the time of
, application, within three (3) business days of receipt of the loan application the
following:
1. Special Information Booklet
2 . Good Faith Estimate / Loan Estimate
3. Mortgage Servicing Disclosure Statement
4. List of Homeownership Counseling Organizations
If the documents are mailed to the applicant , the applicant is considered to have
received them 3 calendar days after they are mailed.
RESPA - Disclosures At The Time of Application (Special Information Booklet) -
correct answer ✔✔Titled: Your Home Loan Toolkit: A Step by Step Guide
Designed to be used in connection with the Loan Estimate and Closing Disclosure
forms
RESPA - Disclosures At The Time of Application (Special Information Booklet -
HELOC Only) - correct answer ✔✔Booklet to provide INSTEAD of the Special
Information Booklet: "When Your Home Is On The Line: What You Should Know
About Home Equity Lines of Credit"
RESPA - Disclosures At The Time of Application (Good Faith Estimate - GFE) -
correct answer ✔✔Disclosure form used for Reverse Mortgage Transactions
