SAFE MORTGAGE LOAN ORIGINATOR TEST STUDY
GUIDE
Prequalification - Answer -an estimate of the loan amt. for which the buyer can qualify
based on his income/credit under the lenders standards
USDA ratio - Answer -29/41
FHA ratio - Answer -31/43
Asset based loan - Answer --loans based on borrowers equity
-bad when lenders fail to consider ability to repay
High Cost Loan - Answer -Reg Z - Sec. 1026.32
-APR will exceed by more than 6.5% for first lien loans or by more than 8.5% for
subordinate
-APOR - average prime offer rate
1. 5%
2. 6.5%
3. 8.5%
RESPA - Section 8 - Answer -Nothing of value for referrals - No kickbacks
Respa - Esign Act - Answer -can use electronic signature with permission of borrower
Gramm Leach Bliley - Answer --borrower notification must state who company shares
info with
-consumers can opt-out of info sharing (send notice to consumer)
-Protects from phishing
-Safeguard Rules
Safeguard Rules - Answer --company and staff need to protect the consumers identity
-lock up files
-part of GLB act
second mortgage - Answer --All money upfront
-no escrow as long as first mortgage is paying it
Subordination Clause - Answer -A contract clause that puts a mortgage in the first lien
position over an earlier recorded mortgage
Denial Of License - Answer --any non-financial felony in the past 7 years
-financial felony ever
-financial misdemeanor (state decides)
, -License has been revoked in another state
-default on a federal student loan
Income - Answer --Need to years history and 3 more years expected income
-do not include sporadic overtime and bonuses
-likelihood of continued income
TILA - Respa Integrated Disclosure - Answer --TRID
-LE must be disclosed within 3 business days
-cannot require documentation from borrower without "intent to proceed"
-Appraisal is considered 0% tolerance
Do Not Call - Answer --$16,000 fine
-Area code report cant be over 30 days old
-allowed to call closed, declined and cancelled loans 18 months after the fact
-can call 90 days after inquiry or pre-qual
-someone says do not call - cant call, email, fax anything
-call between 8-9
Fully Indexed Rate - Answer -Index rate plus Margin
The 1003 - Answer -Contains all Borrower Info (form)
Months of bank statements needed - Answer -2 months
Patriot Act - Answer -Part of Bank Secrecy Act
-Establish policies for identification of borrowers
-Check against bad guy list and retention of records
Civil Rights Act - Answer -Cant discriminate based on race or color (Act)
High Priced Loans - Answer -Reg Z - 1026.35
-1.5% or more on first lien
-3.5% subordinate liens
- 0% trigger fee, 1.5% first mortgage, 3.5% second
HMDA - Answer -Reg C
-Collection of borrower data
-Any lender that funds loans must report march 1
-Notifies FFIEC of potential discrimination
Consumer Financial Protection Bureau - Answer -Agency that overseas and
implements mortgage consumer laws
VA - Answer -41
GUIDE
Prequalification - Answer -an estimate of the loan amt. for which the buyer can qualify
based on his income/credit under the lenders standards
USDA ratio - Answer -29/41
FHA ratio - Answer -31/43
Asset based loan - Answer --loans based on borrowers equity
-bad when lenders fail to consider ability to repay
High Cost Loan - Answer -Reg Z - Sec. 1026.32
-APR will exceed by more than 6.5% for first lien loans or by more than 8.5% for
subordinate
-APOR - average prime offer rate
1. 5%
2. 6.5%
3. 8.5%
RESPA - Section 8 - Answer -Nothing of value for referrals - No kickbacks
Respa - Esign Act - Answer -can use electronic signature with permission of borrower
Gramm Leach Bliley - Answer --borrower notification must state who company shares
info with
-consumers can opt-out of info sharing (send notice to consumer)
-Protects from phishing
-Safeguard Rules
Safeguard Rules - Answer --company and staff need to protect the consumers identity
-lock up files
-part of GLB act
second mortgage - Answer --All money upfront
-no escrow as long as first mortgage is paying it
Subordination Clause - Answer -A contract clause that puts a mortgage in the first lien
position over an earlier recorded mortgage
Denial Of License - Answer --any non-financial felony in the past 7 years
-financial felony ever
-financial misdemeanor (state decides)
, -License has been revoked in another state
-default on a federal student loan
Income - Answer --Need to years history and 3 more years expected income
-do not include sporadic overtime and bonuses
-likelihood of continued income
TILA - Respa Integrated Disclosure - Answer --TRID
-LE must be disclosed within 3 business days
-cannot require documentation from borrower without "intent to proceed"
-Appraisal is considered 0% tolerance
Do Not Call - Answer --$16,000 fine
-Area code report cant be over 30 days old
-allowed to call closed, declined and cancelled loans 18 months after the fact
-can call 90 days after inquiry or pre-qual
-someone says do not call - cant call, email, fax anything
-call between 8-9
Fully Indexed Rate - Answer -Index rate plus Margin
The 1003 - Answer -Contains all Borrower Info (form)
Months of bank statements needed - Answer -2 months
Patriot Act - Answer -Part of Bank Secrecy Act
-Establish policies for identification of borrowers
-Check against bad guy list and retention of records
Civil Rights Act - Answer -Cant discriminate based on race or color (Act)
High Priced Loans - Answer -Reg Z - 1026.35
-1.5% or more on first lien
-3.5% subordinate liens
- 0% trigger fee, 1.5% first mortgage, 3.5% second
HMDA - Answer -Reg C
-Collection of borrower data
-Any lender that funds loans must report march 1
-Notifies FFIEC of potential discrimination
Consumer Financial Protection Bureau - Answer -Agency that overseas and
implements mortgage consumer laws
VA - Answer -41
