Safe-Nmls-Mlo-Ca Exam Study (Full Set)202223

Fraud for profit is a complex scheme involving... - ANSWER-multiple parties, including mortgage lending professionals, in a financially motivated attempt to defraud the lender of large sums of money. If a lender sells, transfers, or otherwise disposes of its interest in a mortgage and does not service the mortgage, the lender shall... - ANSWER-provide a copy of the Closing Disclosure to the new owner or servicer of the mortgage as a part of the transfer of the loan file. Under the Home Equity Loan Consumer Protection Act of 1988, if the disclosed terms change... - ANSWER-the consumer can refuse to open the plan and is entitled to a refund of fees paid in connection with the application. The Right to Financial Privacy Act specifies that... - ANSWER-before any information is released to the federal government, certain procedures, exemptions, limitations, and requirements concerning the release of customer financial records must be met. An Appraisal Report includes the... - ANSWER-identity of the client and any intended users (by name or type), the intended use of the appraisal, the real estate involved, the real property interest appraised, the purpose of the appraisal, and dates of the appraisal and of the report. What are principles that lenders use to evaluate the risk of making real estate loans. - ANSWER-Underwriting guidelines (The guidelines are just that—guidelines. They are flexible and vary according to loan program. If a borrower makes a small down payment or has marginal credit, the guidelines are more rigid.) One of the most obvious ways to classify loans is by their... - ANSWER-purpose— purchase, refinance, or cash out. Lenders classify loans by the type of... - ANSWER-amortization—fixed-rate, ARM, or GPM. Any mortgage product other than a 30-year, fixed-rate mortgage is called a... - ANSWER-nontraditional mortgage The Panic of 1907 led to the passage of the... - ANSWER-Federal Reserve Act of 1913 that established the Federal Reserve System.The Federal Trade Commission (FTC) was created in 1914 in an attempt to... - ANSWER-"bust up" trusts and break apart monopolies that discouraged competition from smaller and less powerful businesses. The two anti-trust laws in 1914 were the... - ANSWER-Federal Trade Commission Act and the Clayton Act. In 1933, the Banking Act of 1933 (Glass-Steagall Act) was passed that... - ANSWERseparated commercial banking from investment banking. What was passed to make housing and home mortgages more affordable? - ANSWER-The National Housing Act of 1934 The National Housing Act of 1934 created the... - ANSWER-Federal Housing Administration (FHA), Federal Savings and Loan Insurance Corporation (FSLIC) and the United States Housing Authority The United States Housing Authority's intent is to... - ANSWER-make low-interest, long term loans to local public agencies for slum clearance and construction of lowincome dwellings. The purpose of the Banking Act of 1935 was... - ANSWER-"to provide for the sound, effective, and uninterrupted operation of the banking system." Under the U.S. Housing Act of 1937 (Wagner-Steagall Act or the Low-Rent Housing Act)... - ANSWER-the federal government, through the Department of Housing and Urban Development (HUD), provides subsidies to local public housing agencies (PHAs) that rent housing to low-income families. The stated purpose of each new law revolves around... - ANSWER-safety, sound practices, stability, confidence, etc. in the financial system being regulated. Passed by congress in 1977, the Community Reinvestment Act (CRA)... - ANSWER-encourages regulated financial institutions to serve their immediate community's needs. Avoiding to lend in high-risk communities and neighborhoods is called... - ANSWERRedlining When a lending institution is recognized by the Federal Reserve, what are the three basic requirements that must be met? - ANSWER-(1) the institution must draw a map that defines the community in which it does business and post it visibly within its facilities. (2) The institution must list the types of credit it offers and make this list of loans available to the public.(3) the lender must post notice within its facilities that federal regulators are evaluating the institution. This notice must provide a forum for public comment on the institution's performance. The Gramm-Leach-Bliley Act (GLBA) repealed part of the... - ANSWER-Glass-Steagall Act prohibiting banks from affiliating with securities firms. Under GLBA, protections were put in place to... - ANSWER-safeguard consumers' nonpublic personal information—the Financial Privacy Rule, the Safeguards Rule, and Pretexting Protection. The "Privacy Rule" requires... - ANSWER-clear disclosure by all financial institutions of their privacy policy regarding the sharing of non-public personal information with both affiliates and third parties. Consumers must be given... - ANSWER-a notice to "opt-out" of sharing of non-public personal information with nonaffiliated third parties. Requires financial institutions to develop a written information security plan that describes how the company is prepared for, and plans to continue to protect clients' nonpublic personal information: - ANSWER-Safeguards Rule The 'Pretexting Protection' requires... - ANSWER-financial institutions to have a plan in place to prevent unauthorized people from accessing non-public personal information based on some pretex t. the Consumer Financial Protection Bureau regulates... - ANSWER-sections 502 through 509, of the Gramm-Leach-Bliley Act. In 2000, Fannie Mae was required by the Department of Housing and Urban Development (HUD) to... - ANSWER-allocate 50% of its business to low- and moderate-income families, with a goal of financing over $500 billion in Community Reinvestment Act related business by 2010. The Housing and Economic Recovery Act (HERA), known as the Housing Stimulus Bill accomplished what? - ANSWER-It authorized temporary measures to stimulate the housing market— homebuyer tax credits, additional property tax deductions, seller-funded down payment assistance programs and neighborhood revitalization funds for communities to purchase foreclosed homes. The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) can be found where? - ANSWER-Title V of the Housing and Economic Recovery Act.The SAFE Act required... - ANSWER-all states to have a loan originator licensing and registration system in place by August 1, 2010. What does the SAFE Act provide? - ANSWER-uniform national licensing standards, including minimum licensing and education. Additionally, it created a comprehensive national licensing database to enable government and consumers to track loan originators and help prevent fraud. Loan originators registered in the national database are provided with a... - ANSWER-Unique Identifier number. A ________________ is defined as an individual who "takes a residential mortgage loan application and also offers or negotiates terms of a residential mortgage loan for compensation or gain". - ANSWERLoan Originator HUD considers the Loan Originator to encompass any individual who... - ANSWER-for compensation or gain, offers or negotiates pursuant to a request from and based on the information provided by the borrower. (A person who performs only administrative or clerical tasks in connection with loan origination is not considered a loan originator.) The SAFE Act's definition of "residential mortgage loan" includes... - ANSWER-a loan secured by a consensual security interest on a dwelling as defined by the Truth in Lending Act. A dwelling is "a residential structure that contains... - ANSWER-1 to 4 units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence." The SAFE Act is regulated by the _________ and implemented by __________ - ANSWER-Consumer Financial Protection Bureau Regulations G and H The 2008 - Emergency Economic Stabilization Act did what? - ANSWER-creating a $700 billion Troubled Assets Relief Program (TARP). TARP was established to stabilize the United States financial system and prevent a systemic collapse. The Reform Act bans the payment of... - ANSWER-yield spread premiums (YSPs) or other originator compensation that is based on the interest rate or other terms of the loans. In general, a mortgage originator may not receive any origination fee, except from the... - ANSWER-consumerMortgage originators are prohibited from ____________ a consumer to obtain a loan that the consumer lacks a reasonable ability to repay - ANSWER-steering Mortgage originators are prohibited from steering a consumer to obtain a loan that has... - ANSWER-predatory characteristics (such as equity stripping, excessive fees, or abusive terms) Mortgage originators are prohibited from steering a consumer from a "_______________" loan for which the consumer is qualified to a loan that is not a qualified mortgage; - ANSWER-qualified mortgage Mortgage originators are prohibited from participating in abusive or unfair lending practices that promote ... - ANSWER-"disparities" among equally creditworthy consumers based on race, ethnicity, gender, or age Mortgage originators are prohibited from ____________ a consumer's credit history or the appraised value of the property securing the loan - ANSWER-mischaracterizing In 2010, what made sweeping changes to financial regulatory agencies that affected almost every aspect of the nation's financial services industry? - ANSWER-Dodd-Frank Wall Street Reform and Consumer Protection Act Subtitle B of the Reform Act establishes... national underwriting standards - ANSWERnational underwriting standards for residential loans. Loan originators must make a reasonable effort based on verified and documented information that "at the time the loan is consummated... - ANSWER-the consumer has a reasonable ability to repay the loan, according to the terms, and all applicable taxes, insurance (including mortgage guarantee insurance), and other assessments." For loans underwritten through Desktop Underwriter (DU) the maximum allowable DTI ratio is based on the... . - ANSWER-overall risk assessment of the loan casefile When a PMI policy is cancelled, the borrower is entitled to a refund of the unearned portion of the mortgage insurance premium paid. The refund must be transferred to the borrower by the lender within... - ANSWER-45 days of cancellation. Mortgage originators are prohibited from discouraging a consumer from... - ANSWERseeking a loan from another mortgage originator. Refinancing replaces the... - ANSWER-old loan with a new one. Loan originators must verify... - ANSWER-a borrower's income for residential mortgages.