Exam (elaborations)
NMLS MODULE 2 FINAL PRACTICE EXAM QUESTIONS AND CORRECT ANSWERS; UPDATED VERSION STUDY GUIDE; GRADED A+
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NMLS MODULE 2 FINAL PRACTICEEXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) A
GRADE
Which of the following is available to a borrower when the subject property is located in a flood zone
and flood insurance is required? - ANS-FEMA's National Flood Insurance Program
Which of the following best represents a loan that fails to meet Fannie Mae and Freddie Mac's
underwriting guidelines?
A non-conforming loan
A conventional loan for $150,000
A conforming loan
A subprime loan - ANS-A non-conforming loan
Balloon payment qualified mortgages - ANS-May be made by small creditors in rural/underserved areas
Which of the following loan programs does not require repayment as long as the homeowner lives in the
home.
HELOC, Option-ARM, Subprime mortgage, reverse mortgage - ANS-Reverse mortgage
Which of the following is true of VA loans?
They are only available for 30-year terms
They require a 5.5% borrower investment
They require mortgage insurance premium
They are assumable - ANS-They are assumable
In order for a small creditor balloon payment mortgage to be qualified mortgage, the small creditor
must hold the loan in its portfolio for: - ANS-Three years
, Construction loans generally come in two different forms. They are - ANS-Construction-to-permanent
and standalone construction loans
Community Mortgage Bank (CMB) is a small creditor in a rural area. CMB holds the loans it originates in
its portfolio until they are paid in full. CMB tries to limit its transtacions to those for qualified mortgages.
In a balloon payment QM transaction, the transaction must meet all of the following criteria, BUT:
The loan must have a fixed interest rate
The loan term must be at least five years old, and no more than 30 years
The borrower must have a DTI of no more than 43%
The borrower must have an established ability to repay - ANS-The borrower must have a DTI of no more
than 43%
Which of the following is an example of an open-ended credit?
Qualified Mortgage
HELOC
Fixed-rate purchase money mortgage
Adjustable-rate mortgage to finance a home purchase - ANS-HELOC
Name another term for a junior lien - ANS-Subordinate lien
Which of the following best describes a loan used to finance a property in an amount that exceeds
Fannie Mae, and Freddie Mac's loan limits?
Jumbo loan
Non-conventional loan
FHA loan
VA loan - ANS-Jumbo Loan
USDA loans are primarily for properties located in - ANS-rural areas
Which of the following would detail the principal and interest payments due on a loan?
Provisions for lifetime rate caps
the index
the amortization schedule
the margin - ANS-The amortization schedule
Examples of loans that are typically secured by a subordinate lien include - ANS-A purchase money
mortgage
VA loans require which of the following?
Mortgage insurance premium
Eligibility fee
VA appraiser premium
Funding Fee - ANS-Funding Fee
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