NMLS SAFE EXAM | LATEST UPDATE| ULTIMATE SOLUTION

Where credit institutions originate loans - CORRECT ANSWER Primary Mortgage Market When an ARM has rate caps of 5/2/6, the 6 refers to what? A. The maximum rate increase at the initial adjustment B. The start rate for the loan C. The maximum the rate can increase over the life of the loan D. The rate maximum the rate can decrease over the life of the loan - CORRECT ANSWER C. The maximum the rate can increase over the life of the loan When utilizing a temporary buydown to lower the interest rate on a FHA loan, which of the following are correct A. The borrower qualified at the note rate B. The borrower qualified at the buydown rate C. The rate cannot be more than 2% below the note rate D. Seller or builder can pay the discount points to buydown the rate - CORRECT ANSWER B. The borrower qualified at the buydown rate All of the following are violations of the Fair Housing Act EXCEPT A. Age B. National Origin C. Disability D.Religion - CORRECT ANSWER A. Age Claim against property held by one who is not the legal owner - CORRECT ANSWER Encrumbrance Advertised term that requires additional disclosures - CORRECT ANSWER Trigger Term An advertisement must be presented "clearly and conspicuously" to keep from being deceptive, unfair, or otherwise violate a Commission rule - CORRECT ANSWER Advertising Disclosure Extenuating circumstances such as "bona fide personal financial emergency - CORRECT ANSWER Waving Right of Rescission Right that borrowers have to cancel a loan or line of credit with a lender within three days of closing - CORRECT ANSWER Right of Rescission When creditors office is open to the public, a calendar working day except Sunday or a federal holiday - CORRECT ANSWER Business Day Financial information used for purposes of obtaining an extension of credit - CORRECT ANSWER Application The act of making new information known - CORRECT ANSWER Disclosure NMLS SAFE EXAM | LATEST UPDATE| ULTIMATE SOLUTION 2 | P a g e Mission is to promote consumer protection and eliminate and prevent anticompetitive business practices - CORRECT ANSWER FTC Federal Trade Commission Regulatory agency charged with overseeing financial products and services offered to consumers - CORRECT ANSWER CFPB Consumer Financial Protection Bureau Enacted 1968 promotes the informed use of consumer credit by requiring disclosures about terms and costs and standardizes the manner in which costs with borrowing are calculated and disclosed - CORRECT ANSWER TILA Truth in Lending Act Interest charged on a loan for one or more days - CORRECT ANSWER Per Diem Interest Principal (X) Interest Rate = Annual Interest Rate - CORRECT ANSWER Annual Interest Rate Formula Mortgage where the mortgagor is only required to pay off the interest that arises from the principal that is borrowed for a set period - CORRECT ANSWER Interest Only Mortgage Borrower chooses to pay additional "discount points" to buy down the interest rate for the life of the mortgage note - CORRECT ANSWER Permanent Buydown Used on fixed rate loans over two years Set of two initial temporary-start interest rates that increase in stair-step fashion until a permanent interest rate is reached - CORRECT ANSWER 2/1 Buydown A form of pre-paid interest which effectively increases the yield on the loan above the amount of the stated interest rate - CORRECT ANSWER Discount Point An amount in addition to the Loan to Value, which simply represents the first position mortgage or loan as a percentage of the property's value - CORRECT ANSWER CLTV Combined Loan to Value Ratio of a loan to the value of an asset purchased - CORRECT ANSWER LTV Loan to Value Principal, Interest, Taxes, Insurance Refers to the components of a mortgage payment - CORRECT ANSWER PITI Housing to Debt Ratio that measures an individual's ability to manage monthly payment and repay debts - CORRECT ANSWER DIF NMLS SAFE EXAM | LATEST UPDATE| ULTIMATE SOLUTION 3 | P a g e Agreement between the lender and the borrower to delay foreclosure - CORRECT ANSWER Forbearance A permanent restructuring of the mortgage where one or more of the terms of a borrower's loan are changed to provide a more affordable payment - CORRECT ANSWER Loan Modification Legal process to collect debt on mortgaged property - CORRECT ANSWER Foreclosure Document generated and signed by a mortgage lender, acknowledging that the borrower has paid off the mortgage loan in full and the mortgage is not a lien on the property - CORRECT ANSWER Satisfaction of Mortgage Letter When two mortgages are on a property, this specifies which mortgage takes precedence - CORRECT ANSWER Subordination Agreement Provides homeowner proof the mortgage is paid off - CORRECT ANSWER Payoff Statement Legal presumption that anything recorded in a public record can be known by anyone - CORRECT ANSWER Constructive Note Direct knowledge that one has of the property - CORRECT ANSWER Actual Note Information that should compel a reasonable person to make further inquiries about some aspect of the property - CORRECT ANSWER Inquiry Note Serves as a central repository of information about a parcel of land - CORRECT ANSWER Title Record Payment received by lender after selling a loan Based on market value - CORRECT ANSWER SRP Service Release Premiums Created in 1968, goal to expand affordable housing under HUD - CORRECT ANSWER GNMA Government National Mortgage Association Created 1968 works with Fannie Mae to increase affordable lending - CORRECT ANSWER FNMA Federal National Mortgage Association Insures banks real estate loans and charges borrowers a small premium - CORRECT ANSWER FHA Federal Housing Administration A loan in which the lender agrees to lend a maximum amount within an agreed period and is also an open-ended mortgage transaction that is secured - CORRECT ANSWER HELOC Home Equity Line of Credit A FHA insured reverse mortgage that allows the conversion of equity in a home to cash - CORRECT ANSWER HECM