NMLS MLO Questions with 100% Correct
Answers
TILA
Truth in Lending Act - Reg Z
How long must TILA disclosures be kept?
2 years, except Closing Disclosure is kept 5 yrs & Loan Estimate 3 yrs
What are the 5 TILA disclosures?
Loan Estimate (LE), Closing Disclosure (CD), Consumer Handbook Adjustable Rate
Mortgages booklet (CHARM booklet), When Your Home is on the line disclosure (for
HELOC & refinances), and the Right to Rescind (2 copies given to each applicant).
When are the TILA disclosures required?
When creditors offer credit before consummation and when credit terms are advertised.
When does TILA apply and require?
Applies when there are 4 or more installment payments, requires full cost disclosure w/ APR
in advertising, regulates advertising, offers 3 biz day right of rescission, and enforces that no
other pre fees are taken besides credit report.
Nominal Rate & Note Rate are also known as?
Interest Rate
Trigger Terms
Pretty much any time a number/figure is in an advertisement besides APR.
When Trigger Terms are used what is required to be disclosed according to TILA?
,The % or amount of down payment, the terms of repayment, & APR
APR
Annual Percentage Rate
MDIA
Mortgages Disclosure Improvement Act (3/7/3 act) Initial disclosure 3 biz days,
Consummation 7 biz days, Redisclosure 3 biz days
When is a rediscloure required and how many additional days does borrower get to
review?
If APR goes above or below 1/8% on conventional loan, or 1/4% on a non conventional loan,
3 days to review
APOR
Average Prime Offer Rate. Average Rate today
When and how is the APOR used?
To determine whether a loan is high-cost (HOEPA high cost) or higher priced (HPML) the
APR is compared to the APOR.
HOEPA, requires what?
Home Ownership & Equity Protection Act, additional notices because of high interest rates
and/or loan fees
HOEPA, prohibits what?
, Home Ownership and Equity Protection Act. Prohibits balloon payments, negative
amortization, prepayment penalties, acceleration of debt, and refinancing that does not benefit
the borrower.
HELOC
Home Equity Line of Credit
HOEPA Section 32
High-cost, when first lien has an APR that exceeds the APOR by more than 6.5%, second
mortgage by more than 8.5%, when any fees are higher than $1,103, or when fees
promissory note
a written promise to pay a specified amount of money on demand or at a definite time
Payee
the party to whom payment of a promissory note is to be made
Payor
one who makes payment
Straight Note (Interest Only Mortgage)
Fixed rate that pays only interest for a period of years, after which the loan becomes fully
amortizing
Fully Amortizing Loans (self-liquidating loan)
Monthly payments result in the principal balance being extinguished at the end of the loan
term. (Most fixed rate mortgages are this)
partially amortized loan
Answers
TILA
Truth in Lending Act - Reg Z
How long must TILA disclosures be kept?
2 years, except Closing Disclosure is kept 5 yrs & Loan Estimate 3 yrs
What are the 5 TILA disclosures?
Loan Estimate (LE), Closing Disclosure (CD), Consumer Handbook Adjustable Rate
Mortgages booklet (CHARM booklet), When Your Home is on the line disclosure (for
HELOC & refinances), and the Right to Rescind (2 copies given to each applicant).
When are the TILA disclosures required?
When creditors offer credit before consummation and when credit terms are advertised.
When does TILA apply and require?
Applies when there are 4 or more installment payments, requires full cost disclosure w/ APR
in advertising, regulates advertising, offers 3 biz day right of rescission, and enforces that no
other pre fees are taken besides credit report.
Nominal Rate & Note Rate are also known as?
Interest Rate
Trigger Terms
Pretty much any time a number/figure is in an advertisement besides APR.
When Trigger Terms are used what is required to be disclosed according to TILA?
,The % or amount of down payment, the terms of repayment, & APR
APR
Annual Percentage Rate
MDIA
Mortgages Disclosure Improvement Act (3/7/3 act) Initial disclosure 3 biz days,
Consummation 7 biz days, Redisclosure 3 biz days
When is a rediscloure required and how many additional days does borrower get to
review?
If APR goes above or below 1/8% on conventional loan, or 1/4% on a non conventional loan,
3 days to review
APOR
Average Prime Offer Rate. Average Rate today
When and how is the APOR used?
To determine whether a loan is high-cost (HOEPA high cost) or higher priced (HPML) the
APR is compared to the APOR.
HOEPA, requires what?
Home Ownership & Equity Protection Act, additional notices because of high interest rates
and/or loan fees
HOEPA, prohibits what?
, Home Ownership and Equity Protection Act. Prohibits balloon payments, negative
amortization, prepayment penalties, acceleration of debt, and refinancing that does not benefit
the borrower.
HELOC
Home Equity Line of Credit
HOEPA Section 32
High-cost, when first lien has an APR that exceeds the APOR by more than 6.5%, second
mortgage by more than 8.5%, when any fees are higher than $1,103, or when fees
promissory note
a written promise to pay a specified amount of money on demand or at a definite time
Payee
the party to whom payment of a promissory note is to be made
Payor
one who makes payment
Straight Note (Interest Only Mortgage)
Fixed rate that pays only interest for a period of years, after which the loan becomes fully
amortizing
Fully Amortizing Loans (self-liquidating loan)
Monthly payments result in the principal balance being extinguished at the end of the loan
term. (Most fixed rate mortgages are this)
partially amortized loan
