NACA HUD Certification Exam 2023

Credit Report - Answer- a compilation of data about you that has been gathered by credit reporting agencies or "credit bureaus" Length of Credit History - Answer- Makes up 15% of FICO score Type - Answer- __ of credit use makes up 10% of FICO score New Credit or Inquiries - Answer- Makes up 10% of FICO score Amounts Owed - Answer- Makes up 30% of FICO score Payment History - Answer- Makes up 35% of FICO score Fair Credit Reporting Act (FCRA) - Answer- act that protects privacy of background information and ensures that information supplied is accurate in the files of the nation's credit reporting companies Residential Mortgage Credit Report - Answer- a credit report containing information from all three credit bureaus and is used to determine credit worthiness therefore is full verified when a customer applies for a loan and it will affect the credit score Negative Amortization - Answer- when the loan principal increases over time even though you are making payments Balloon Payment - Answer- a final loan payment that is much larger than the regular monthly payments PITI - Answer- Principal, Interest, Taxes, Insurance 4 C's of Credit - Answer- Capacity, Capital, Character, Collateral Chapter 7 Bankruptcy - Answer- Straight Bankruptcy; most common form for individuals; typically used by people who have no hope of repaying their debt; Truth in Lending Act (TILA) - Answer- Requires lenders to provide consumers with loan cost information so that they can comparison shop (to protect consumers against inaccurate and unfair loan billing and credit card practices) Title 6 of the Civil Rights Act of 1964 - Answer- no person in the united states shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. Title 8 of the Civil Rights Act of 1968 - Answer- The Fair Housing Act; Executive Order 11063 (This Order signed by JFK on Nov. 20, 1962, "prohibits discrimination in the sale, leasing, rental, or other disposition of properties and facilities owned or operated by the federal government or provided with federal funds." This order banned segregation federally funded housing.) Section 504 of the Rehabilitation Act of 1973 - Answer- Extends civil rights to people with disabilities; the first disability civil rights law to be enacted in the U.S; set the stage for the Americans with Disabilities Act. The Age Discrimination Act of 1975 - Answer- Prohibits discrimination on the basis of age in programs and activities receiving federal financial assistance Title 9 of the Education Amendments of 1972 - Answer- bars educational institutions or activities that receive federal funds from discriminating against persons on the basis of sex Housing Counselor - Answer- a professional who is HUD certified to provide advice and guidance to individuals and households to assist them in improving their housing situation and meeting the responsibilities of tenancy and homeownership. counselor - Answer- The main role of the __________ is to assess the client's needs and educate them on how to achieve their goals of homeownership. HCA data release form - Answer- permits an HCA to order a client credit report and/or to share client information with HUD or third parties as applicable Fair Housing Act - Answer- The federal law that prohibits discrimination in housing sales, rentals, financing, and insurance based on race, color, religion, sex, disability, familial status, and national origin Active debts - Answer- debts that the Client is currently paying or that are in a deferment or forbearance status and will become active in the next 12 months charge-offs and collections - Answer- debts the client stopped paying liens and judgements - Answer- debts that the creditor recorded with the courts Installment debt - Answer- a loan with fixed payments over a period of time revolving debt - Answer- a loan with a variable balance and a variable monthly payment 10 months - Answer- Debts lasting less that ___________ must be included if the amount of the debt affects the consumer's ability to pay the mortgage during the months immediately after loan closing. revolving or open-ended - Answer- Monthly payments on ______________ accounts, regardless of the balance, are counted as a liability for qualifying purposes even if the account appears likely to be paid off within 10 months or less. revolving debt - Answer- Automobile leases are considered what type of debt? contingent liability - Answer- exists when an individual is held responsible for payment of a debt if another party, jointly or severally obligated, defaults on the payment. power payments - Answer- debt payment technique that requires you to: 1st make a commitment to stop borrowing or charging until all debts are paid, then 2nd make power payments on current obligations; as soon as one debt is totally paid, the monthly payment from that loan is applied to the next debt. extra payment - Answer- any additional money paid toward debts above the minimum amount auto repossessions - Answer- can almost always be negotiated for 33% of the amount the creditor claims are owed if the debt is at least 2 years old, 50% if 1 year old hard inquiries - Answer- also known as hard pulls; happen when a creditor checks the consumer's credit for the purpose of giving a loan or credit card; can result in lower credit score's and higher interest rates on loans; can remain on your credit report for 2 years; multiple of these can reduce your credit score 5 to 10 points per inquiry; soft inquiry - Answer- also know as soft pull; is where the consumer or a company is simply looking for information without the consumer seeking credit; are not disputable; tri-merge report - Answer- a report containing date from all 3 bureaus; produced by a third-party service provider such as Credco, Krill, and CBC-Innovis; can be hard or soft pull depending on the purpose for which it is pulled; counseling agencies need authorization to order this report and the pull or inquiry can affect the credit score; Equal Credit Opportunity Act - Answer- prohibits lenders from using discriminatory practice when dealing with current and potential borrowers; title 7 of the consumer credit protection act; prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights; public records - Answer- this section of the credit report contains information from local, state, and federal courts and shows any legal item recorded such as bankruptcy, judgements, law suits, liens, or foreclosures; if there are any