NMLS SAFE ACT MLO Exam - Ethics and Fraud Questions and Answers Already Passed

NMLS SAFE ACT MLO Exam - Ethics and Fraud Questions and Answers Already Passed A lender provides a borrower with an initial amortization schedule for Private Mortgage Insurance (PMI) disclosure at loan closing for an adjustable-rate mortgage. The lender MUST also provide a written notice stating the A. Lender's right to increase the monthly payment amount for PMI B. Borrower's right to refuse a PMI C. Lender's right to extend the time for monthly payments for a PMI D. Borrower's right to cancel PMI D. Borrower's right to cancel PMI The Privacy Rule of the Gramm-Leach-Bliley Act requires that financial institutions provide the consumer with a Consumer Privacy Policy disclosure A. each time the servicing is transferred. B. each time the policy is revised. C. annually as long as the relationship continues. D. at closing only. C. annually as long as the relationship continues. Which of the following is true of a dual contract? A. It deprives the seller of receipt of the full price of the property. B. It deprives third parties of their proper fees. C. It defrauds the lender providing the funds for the purchase of the property. D. It is usually used so the real estate agent may earn a higher commission. C. It defrauds the lender providing the funds for the purchase of the property. Explanation: A dual contract is an instrument that states a sales price higher than the actual sales price in an effort to obtain a larger loan from a lender or lending institution or for the purpose of misinforming a governmental agency or some other reason. Which law ensures that some borrowers have the right of rescission for three business days after a loan contract is signed? A. Regulation Z B. Regulation X C. Title VIII D. Equal Credit Opportunity Act A. Regulation Z Explanation: The Truth in Lending Act (TILA) of 1968 is a United States federal law and designed to protect Consumers in credit by requiring clear key terms of the lending arrangement and all costs. is legal in Title I of the Consumer Credit Protection Act, as amended. The regulations implementing the statute, which are known as "Regulation Z", are codified at 12 CFR Part 226. Most of the specific requirements imposed by TILA are found in Regulation Z, so a reference to the requirements of TILA usually refers to the requirements contained in Regulation Z, as well as the statute itself. Which is LEAST LIKELY to be an example of illegal flipping? A. an inflated appraisal B. a series of sales and quick resales C. a group of sellers and buyers changing ownership of one property among them D. purchasing and remodeling a house and selling it for quick profit D. purchasing and remodeling a house and selling it for quick profit Explanation: Purchasing and remodeling a house and then selling it for a quick profit is the good side of flipping, which is perfectly legal. The illegal side of flipping is when colluding parties profit from the sale of property with an inflated appraisal that supports a loan. It may involve a series of sales and quick resales, with one property and a group of sellers and buyers changing ownership among them. Under the USA Patriot Act, which of the following is NOT obtained by a mortgage broker from a borrower for customer identification purposes? A. Alien identification number B. Passport number C. Taxpayer identification number D. Credit card number D. Credit card number Which of the following is true of property flipping? A. It is illegal. B. It does not apply to a situation where the owner fixes up a property and sells it shortly after acquiring it.