HUD EXAM PREP QUESTIONS AND
ANSWERS27
Types of Credit Used - ANSWERS-Student loan or credit cards only
FAKO scores - ANSWERS-purchase score which are educational score
Fair Credit Reporting Act FCRA - ANSWERS-what is in file/dispute/remove 30 days/remove bad 7
yrs/bk 10 yrs/access limited/damages from violators/state rights
Fair and Accurate Credit Transactions Act FACTA - ANSWERS-free cbrs/fraud alert/truncate cc #s
Fair Credit Billing Act (FCBA) - ANSWERS-dispute bill error/mail 60 days/creditor 30 days
acknowledge and 90 days research. billed timely manner/14 days before payment due
Tax Credits - ANSWERS-Earned Income Tax Credit/EITC-low/moderate income ind/families. Net
earnings from self employment-income/marital status/children. Educational credit-post
seconday for ind/child. Child/Dependent Care Credit-work/look for work and paying a service.
additional credits under 17yo.
predatory lending - ANSWERS-loan flipping-refi existing loan for more fees and interest
Chap 13 bk - ANSWERS-3-5 yr payment plan on all/part of debt, can stop foreclosure, cure
delinquent mortgage payments, reschedule secured debts other than mortgage, lower
payment, retain house/car
,Blockbusting - ANSWERS-convince/attempt person to sell/rent due to entry/neighborhood of
race/color/religion/familia/origin/disability
Redlining - ANSWERS-illegal practice to make residential loans due to race, neighborhood,
origin, familia, sex, color
Closing costs & Discount Points - ANSWERS-Closing 3-4% and Discount 1% of total loan amount
front end ratio / housing expense ratio - ANSWERS-monthly housing exp/gross monthly income
Gross Monthly Income (GMI) - ANSWERS-hourly-10/hrx35hrsx52 wks/12......wkly
750x52wksx12=.....biwkly-1000.x26/12=....semimnth-1200.x2=...selfemploy-average gross
70587./24=
back-end ratio - ANSWERS-debt exp/gross debt to income ratio
Affordability - ANSWERS-FE/Conv 28, FHA 31, FHAEE 33, Rent 30....BE/Conv 36(45-50), FHA 43,
FHAEE 45, Rent 36
Max Mnthly House Pymt - ANSWERS-FERxgmi BERxgmi-debts
2nd mort/piggy back loan - ANSWERS-lower 1st mort, avoid private morg ins, repairs, education
mortg terms - ANSWERS-interest only-pay only interest for a fixed term after borrower pays
principal/interest, fixed rate-interest fixed 30 yrs or 10-15, Adjustable-interest adjust and has
cap
Loan-to-Value Ratio - ANSWERS-LTV%=loan bal/sales price/appraised x 100
, down payment - ANSWERS-conv-varies, FHA-580+96.5%LTV or 3.5% down, 500-579-90LTV or 10
down, VA/USDA-none
Mort Ins - ANSWERS-Private Morg Ins-priv loans conv/subprime, Up Front-FHA, VA, USDA, Mort
Ins Premium-FHA, VA, USDA
Civil Rights Act of 1866 - ANSWERS-all natural citizens except american indians
1896 Plessy v. Ferguson - ANSWERS-ruled that segregation was allowed, as long as the facilities
were "separate but equal"
1933 Home Owners Loan Corporation (HOLC) - ANSWERS-Conress to avoid foreclosures during
great depression/refinance mort in default
1948 Shelly v Kraemer - ANSWERS-deed restrictions deemed illegal
1954 Brown v. Board of Education - ANSWERS-This famous Supreme Court case over turned
Plessy v. Ferguson. The Brown decision stated that separated but equalities were inherently
unequal.
1962 Executive Order 11063 - ANSWERS-JFK prohibit discrimination in sale/lease/rent backed by
federal funds
1964 Civil Rights Act - ANSWERS-This act prohibited Discrimination because of race, color, sex,
religion, or national origin by employers or labor unions
1968 Civil Rights Act - ANSWERS-This was passed in response to MLK Jr's assassination. Called
the Fair Housing Act. Prohibits discrimination in housing sales, rentals, advertising, and
ANSWERS27
Types of Credit Used - ANSWERS-Student loan or credit cards only
FAKO scores - ANSWERS-purchase score which are educational score
Fair Credit Reporting Act FCRA - ANSWERS-what is in file/dispute/remove 30 days/remove bad 7
yrs/bk 10 yrs/access limited/damages from violators/state rights
Fair and Accurate Credit Transactions Act FACTA - ANSWERS-free cbrs/fraud alert/truncate cc #s
Fair Credit Billing Act (FCBA) - ANSWERS-dispute bill error/mail 60 days/creditor 30 days
acknowledge and 90 days research. billed timely manner/14 days before payment due
Tax Credits - ANSWERS-Earned Income Tax Credit/EITC-low/moderate income ind/families. Net
earnings from self employment-income/marital status/children. Educational credit-post
seconday for ind/child. Child/Dependent Care Credit-work/look for work and paying a service.
additional credits under 17yo.
predatory lending - ANSWERS-loan flipping-refi existing loan for more fees and interest
Chap 13 bk - ANSWERS-3-5 yr payment plan on all/part of debt, can stop foreclosure, cure
delinquent mortgage payments, reschedule secured debts other than mortgage, lower
payment, retain house/car
,Blockbusting - ANSWERS-convince/attempt person to sell/rent due to entry/neighborhood of
race/color/religion/familia/origin/disability
Redlining - ANSWERS-illegal practice to make residential loans due to race, neighborhood,
origin, familia, sex, color
Closing costs & Discount Points - ANSWERS-Closing 3-4% and Discount 1% of total loan amount
front end ratio / housing expense ratio - ANSWERS-monthly housing exp/gross monthly income
Gross Monthly Income (GMI) - ANSWERS-hourly-10/hrx35hrsx52 wks/12......wkly
750x52wksx12=.....biwkly-1000.x26/12=....semimnth-1200.x2=...selfemploy-average gross
70587./24=
back-end ratio - ANSWERS-debt exp/gross debt to income ratio
Affordability - ANSWERS-FE/Conv 28, FHA 31, FHAEE 33, Rent 30....BE/Conv 36(45-50), FHA 43,
FHAEE 45, Rent 36
Max Mnthly House Pymt - ANSWERS-FERxgmi BERxgmi-debts
2nd mort/piggy back loan - ANSWERS-lower 1st mort, avoid private morg ins, repairs, education
mortg terms - ANSWERS-interest only-pay only interest for a fixed term after borrower pays
principal/interest, fixed rate-interest fixed 30 yrs or 10-15, Adjustable-interest adjust and has
cap
Loan-to-Value Ratio - ANSWERS-LTV%=loan bal/sales price/appraised x 100
, down payment - ANSWERS-conv-varies, FHA-580+96.5%LTV or 3.5% down, 500-579-90LTV or 10
down, VA/USDA-none
Mort Ins - ANSWERS-Private Morg Ins-priv loans conv/subprime, Up Front-FHA, VA, USDA, Mort
Ins Premium-FHA, VA, USDA
Civil Rights Act of 1866 - ANSWERS-all natural citizens except american indians
1896 Plessy v. Ferguson - ANSWERS-ruled that segregation was allowed, as long as the facilities
were "separate but equal"
1933 Home Owners Loan Corporation (HOLC) - ANSWERS-Conress to avoid foreclosures during
great depression/refinance mort in default
1948 Shelly v Kraemer - ANSWERS-deed restrictions deemed illegal
1954 Brown v. Board of Education - ANSWERS-This famous Supreme Court case over turned
Plessy v. Ferguson. The Brown decision stated that separated but equalities were inherently
unequal.
1962 Executive Order 11063 - ANSWERS-JFK prohibit discrimination in sale/lease/rent backed by
federal funds
1964 Civil Rights Act - ANSWERS-This act prohibited Discrimination because of race, color, sex,
religion, or national origin by employers or labor unions
1968 Civil Rights Act - ANSWERS-This was passed in response to MLK Jr's assassination. Called
the Fair Housing Act. Prohibits discrimination in housing sales, rentals, advertising, and
