PREPXL- General mortgage knowledge EXAM(Graded A+ actual test)

According to the Truth-in-Lending Act, a variation up to what amount is permitted for the annual percentage rate in a regular fixed-rate mortgage transaction as quoted in the Loan Estimate? 1% .5% .125% .25% - Answer-.125% The term "subordination" refers to: The process of releasing a lien The process of recording a lien The process of one lienholder accepting inferior lien priority in favor of another The process of researching a lien - Answer-The process of one lienholder accepting inferior lien priority in favor of another Yield spread premiums (YSP) compensate: A borrower for obtaining a loan A lender for the transfer of servicing rights A title company for issuing title insurance A borrower for closing a loan above par - Answer-A borrower for closing a loan above parThe term "escrow analysis" refers to: The calculation used to determine how much can be held in an escrow account The calculation used to determine whether or not a mortgage qualifies as a high-cost loan under section 32 The process used to reconcile differences in comparables on an appraisal The process used to determine whether or not a Loan Estimate is within tolerance levels - Answer-The calculation used to determine how much can be held in an escrow account A ten-year adjustable-rate mortgage has rate caps of 3/2/10 with an initial interest rate of 6% (2% margin + 4% index). Which of the following is true? The lifetime cap of the loan is 5% The interest rate cannot increase by more than 3% in any one adjustment period At the first rate adjustment, the interest rate will increase to 7.5% Over the term of the loan, the interest rate may not rise higher than 16% - Answer-Over the term of the loan, the interest rate may not rise higher than 16% Which of the following loans would not require any monthly payment? All loans require a monthly payment Negative amortization mortgageReverse mortgage Interest-only mortgage - Answer-Reverse mortgage A HECM is repaid: Monthly, with interest-only payments Monthly, with fully-amortizing payments Monthly, with negatively-amortizing payments and a balloon payment Upon the borrower's death or sale of the property - Answer-Upon the borrower's death or sale of the property With respect to an adjustable-rate mortgage (ARM), which of the following is set by the lender at closing and does not vary throughout the term of the loan? Index Fully-indexed rate Balloon period Margin - Answer-Margin Which of the following incorporates closing costs associated with the loan into the interest rate for comparison and disclosure purposes?Good Faith Estimate Regulation X APR RESPA - Answer-APR A jumbo loan: Is for subprime borrowers only Is another name for a VA loan Exceeds conforming loan limits Is illegal - Answer-Exceeds conforming loan limits A standard owner's title policy would cover all of the following, except: Boundary disputes Unfiled mechanic's liens Previous owner's mortgage Previous owner's judgment lien - Answer-Unfiled mechanic's liens If a conventional loan goes into default, is foreclosed upon, and causes the lender to lose money, which of the following would possibly reimburse the lender for the loss?Mortgage insurance company FHA Fannie Mae Hazard insurance company - Answer-Mortgage insurance company A loan that allows the borrower to receive monthly payments rather than make monthly payments is: Most likely fraudulent A reverse mortgage A payment option ARM A hybrid ARM - Answer-A reverse mortgage