SAFE MLO TEST NATIONAL CONTENT
OUTLINE
RESPA was enacted in 1974 for what purposes? - ANSWER-Allow consumers to obtain
information on the costs of closing so that they can shop for settlement services
Protect consumers from excessive settlement costs and unearned fees
RESPA's current regulations serve to: - ANSWER-Protect consumers from excessive
settlement costs
Limit the amount of funds that creditors can require consumers to deposit into escrow
accounts
Establish disclosures, policies, and procedures to facilitate timely communications
between loan servicers and consumers
Define Mortgage Brokers - ANSWER-Primarily a liaison between borrowers and lenders
by referring applicants to select lenders or by offering borrowers a variety of loan
products from a number of lending institutions
Section 8(a) of RESPA - ANSWER-prohibits anyone from giving or accepting things of
value unless unless work is preformed to earn the fee.
The Servicing Rules create an exemption for small servicers that is - ANSWER-- A
housing finance agency
- A nonprofit entity that services 5,000 or fewer mortgage loans,
Servicers must maintain policies and procedures to: - ANSWER-- Provide accurate and
timely disclosures to borrowers
- Investigate and correct borrower complaints and respond with accurate information
- Submit current and accurate information requested during a foreclosure process
- Promptly identify and communicate with the successor in interest upon notification of
the death of a borrower
- Oversee and periodically review service providers
- Ensure the timely transfer of information and documents to a transferee servicer
- Identify information and documents that were not transferred by a transferor servicer
How long must servicers retain documents that relate to a borrowers mortgage? -
ANSWER-1 year after the date on which the loan is discharged OR servicing is
transferred to another servicer
An Initial Escrow Statement contains - ANSWER-An Initial Escrow Statement contains
- Amount of the borrowers mortgage payment and the portion that is deposited
- Itemized taxes, insurance, and other payment to be made from the escrow account
during the computation year
, - Amount that the servicer has selected as a cushion
- A "trial running balance"
Annual Escrow Statement contains - ANSWER-- An Account history and a projection of
the payments for the coming year
- A statement showing both last years and the current years monthly mortgage payment
and the amount of the payment that is deposited into the escrow account
- The total amount paid both into and out of the escrow account for the past
computation year
- The escrow account balance at the end of the period and an explanation of how the
servicer is handling any surplus
- Explanation of how the borrowe is to pay any deficiency
RESPA applies to - ANSWER-federally-regulated mortgage loans:
• funds insured by the federal government
• collateral insured by federal government
• depository institutions regulated by FDIC or NCUA
• intended sale to Fannie or Freddie
• creditor regulated under TILA
• mortgage broker and assigned to a creditor
Adverse Action - ANSWER-A refusal to grant credit in substantially the amount or on
substantially the terms requested in an application unless the creditor makes a counter
offer and the applicant expressly accepts the credit offered.
Elderly as defined as ECOA - ANSWER-A person 62 years old or older.
Elderly - ANSWER-Any persons that is 62 years old or older
Dwelling per TILA - ANSWER-A residential structure or mobile home which contains 1-4
family housing units or individual units of condos or cooperatives
Residential Mortgage Loan - ANSWER-A consumer credit transaction secured by a
mortgage or equivalent consensual security interest "on a dwelling or on residential real
property that includes a dwelling".
Initial Escrow Statement - ANSWER-Must be given to borrower at closing or in 45 days
after closing.
Annual Escrow Statement - ANSWER-Due 30 days of completion of escrow account.
Section 8 (b) of RESPA - ANSWER-prohibits fee splitting where fees are received for
services not actually performed
Servicing includes - ANSWER-receiving a borrower's periodic payment, making
payments to the owner of the Loan and making payments to 3rd parties
OUTLINE
RESPA was enacted in 1974 for what purposes? - ANSWER-Allow consumers to obtain
information on the costs of closing so that they can shop for settlement services
Protect consumers from excessive settlement costs and unearned fees
RESPA's current regulations serve to: - ANSWER-Protect consumers from excessive
settlement costs
Limit the amount of funds that creditors can require consumers to deposit into escrow
accounts
Establish disclosures, policies, and procedures to facilitate timely communications
between loan servicers and consumers
Define Mortgage Brokers - ANSWER-Primarily a liaison between borrowers and lenders
by referring applicants to select lenders or by offering borrowers a variety of loan
products from a number of lending institutions
Section 8(a) of RESPA - ANSWER-prohibits anyone from giving or accepting things of
value unless unless work is preformed to earn the fee.
The Servicing Rules create an exemption for small servicers that is - ANSWER-- A
housing finance agency
- A nonprofit entity that services 5,000 or fewer mortgage loans,
Servicers must maintain policies and procedures to: - ANSWER-- Provide accurate and
timely disclosures to borrowers
- Investigate and correct borrower complaints and respond with accurate information
- Submit current and accurate information requested during a foreclosure process
- Promptly identify and communicate with the successor in interest upon notification of
the death of a borrower
- Oversee and periodically review service providers
- Ensure the timely transfer of information and documents to a transferee servicer
- Identify information and documents that were not transferred by a transferor servicer
How long must servicers retain documents that relate to a borrowers mortgage? -
ANSWER-1 year after the date on which the loan is discharged OR servicing is
transferred to another servicer
An Initial Escrow Statement contains - ANSWER-An Initial Escrow Statement contains
- Amount of the borrowers mortgage payment and the portion that is deposited
- Itemized taxes, insurance, and other payment to be made from the escrow account
during the computation year
, - Amount that the servicer has selected as a cushion
- A "trial running balance"
Annual Escrow Statement contains - ANSWER-- An Account history and a projection of
the payments for the coming year
- A statement showing both last years and the current years monthly mortgage payment
and the amount of the payment that is deposited into the escrow account
- The total amount paid both into and out of the escrow account for the past
computation year
- The escrow account balance at the end of the period and an explanation of how the
servicer is handling any surplus
- Explanation of how the borrowe is to pay any deficiency
RESPA applies to - ANSWER-federally-regulated mortgage loans:
• funds insured by the federal government
• collateral insured by federal government
• depository institutions regulated by FDIC or NCUA
• intended sale to Fannie or Freddie
• creditor regulated under TILA
• mortgage broker and assigned to a creditor
Adverse Action - ANSWER-A refusal to grant credit in substantially the amount or on
substantially the terms requested in an application unless the creditor makes a counter
offer and the applicant expressly accepts the credit offered.
Elderly as defined as ECOA - ANSWER-A person 62 years old or older.
Elderly - ANSWER-Any persons that is 62 years old or older
Dwelling per TILA - ANSWER-A residential structure or mobile home which contains 1-4
family housing units or individual units of condos or cooperatives
Residential Mortgage Loan - ANSWER-A consumer credit transaction secured by a
mortgage or equivalent consensual security interest "on a dwelling or on residential real
property that includes a dwelling".
Initial Escrow Statement - ANSWER-Must be given to borrower at closing or in 45 days
after closing.
Annual Escrow Statement - ANSWER-Due 30 days of completion of escrow account.
Section 8 (b) of RESPA - ANSWER-prohibits fee splitting where fees are received for
services not actually performed
Servicing includes - ANSWER-receiving a borrower's periodic payment, making
payments to the owner of the Loan and making payments to 3rd parties
