SAFE Mortgage Loan Originator
UPDATED ACTUAL Exam
Questions and CORRECT Answers
RESPA - CORRECT ANSWER - Real Estate Settlement Procedures Act (Regulation X) was
intended to reform the settlement process "to ensure that consumers throughout the Nation are
provided with greater and more timely information on the nature and costs of the settlement
process and are protected from unnecessarily high settlement charges caused by certain
abusive practices..."
Four purposes of RESPA - CORRECT - 1. Require effective advance disclosure
ANSWER of costs.
2. Eliminate kickbacks and referral fees.
3. Limit amount held in escrow or reserve accounts.
4. Reform record keeping of land title information.
What does RESPA apply to? - CORRECT - Any transaction involving a
ANSWER federally regulated mortgage loan.
What is a federally regulated mortgage loan? - CORRECT ANSWER - Any loan secured
by a first lien on residential property designed for the occupancy of 1-4 families made by any
lender which meets any of the following criteria:
•has deposits insured by the federal govt.
•regulated by the Federal Government
•insured by HUD
•intends to sell the loan to Fannie Mae, Freddie Mac, or Ginnie Mae
•makes more than $1,000,000 in loans per year.
RESPA affects any settlement service which includes the following: - CORRECT
ANSWER - •Title Searches
•Title Examinations
,•Title insurance
•Attorney services
•Preparation of documents
•Surveys
•Credit Reports
•Appraisals
•Pest inspections
•Real estate services
•Loan origination
•Processing mortgages
•Closing or settling mortgages
When must it be disclosed to the borrower if a loan can or cannot be transferred? - CORRECT
ANSWER - At the time of application or within three days of application.
When must notice be given to the borrower if servicing IS transferred? - CORRECT
ANSWER - No less than 15 days before the effective date of the transfer.
How long does the borrower have to make payments to either lender without any negative
implications including credit reporting and late charges? - CORRECT ANSWER - During the
60 days following the effective date.
What must the initial servicing disclosure include? - CORRECT ANSWER - Whether or not
the lender intends to transfer the servicing of the loan and the lenders history of transferring
servicing.
What must the notice of serving transfer include? - CORRECT ANSWER - Contact info
for both the new lender and the old lender. As well as the following:
-effective date of the transfer
-phone # for both the transferring servicer and the new servicer.
, -name or dept. of both companies for contact to answer questions
-date on which old servicer will cease accepting payments -any
info regarding mortgage life or disability insurance
-a statement advising the borrower that the terms of their loan will not change.
What is the purpose of the aggregate escrow analysis? - CORRECT ANSWER - To reduce
the amount being held in escrow or reserve accounts (accounts for taxes and ins.)
How much may servicers hold as a cushion for escrow? - CORRECT - Two
ANSWER months of taxes, insurance and mortgage insurance as applicable.
How much may servicers collect in each payment? - CORRECT ANSWER - One months
worth of escrowed items unless there is a shortage in the account.
How often must accounts be analyzed? - CORRECT ANSWER - Once every 12 months.
Any overage over what needs to be refunded to the borrower within what time? - CORRECT
ANSWER - Over $50 within 30 days.
What options does the servicer have when the account is short? - CORRECT --
ANSWER do nothing
-require a lump sum deposit into account. However they can only do this if the
shortage/deficiency is less than one months worth of deposits.
-have borrower repay SHORTAGES over 12 months.
-have borrower repay DEFICIENCIES over a 2 month period.
What is the penalty for non-compliance in repaying escrow? - CORRECT --
ANSWER $65/occurrence up to $120k/year if UNintentional.
-$110/occurrence with no limit of INtentional.
UPDATED ACTUAL Exam
Questions and CORRECT Answers
RESPA - CORRECT ANSWER - Real Estate Settlement Procedures Act (Regulation X) was
intended to reform the settlement process "to ensure that consumers throughout the Nation are
provided with greater and more timely information on the nature and costs of the settlement
process and are protected from unnecessarily high settlement charges caused by certain
abusive practices..."
Four purposes of RESPA - CORRECT - 1. Require effective advance disclosure
ANSWER of costs.
2. Eliminate kickbacks and referral fees.
3. Limit amount held in escrow or reserve accounts.
4. Reform record keeping of land title information.
What does RESPA apply to? - CORRECT - Any transaction involving a
ANSWER federally regulated mortgage loan.
What is a federally regulated mortgage loan? - CORRECT ANSWER - Any loan secured
by a first lien on residential property designed for the occupancy of 1-4 families made by any
lender which meets any of the following criteria:
•has deposits insured by the federal govt.
•regulated by the Federal Government
•insured by HUD
•intends to sell the loan to Fannie Mae, Freddie Mac, or Ginnie Mae
•makes more than $1,000,000 in loans per year.
RESPA affects any settlement service which includes the following: - CORRECT
ANSWER - •Title Searches
•Title Examinations
,•Title insurance
•Attorney services
•Preparation of documents
•Surveys
•Credit Reports
•Appraisals
•Pest inspections
•Real estate services
•Loan origination
•Processing mortgages
•Closing or settling mortgages
When must it be disclosed to the borrower if a loan can or cannot be transferred? - CORRECT
ANSWER - At the time of application or within three days of application.
When must notice be given to the borrower if servicing IS transferred? - CORRECT
ANSWER - No less than 15 days before the effective date of the transfer.
How long does the borrower have to make payments to either lender without any negative
implications including credit reporting and late charges? - CORRECT ANSWER - During the
60 days following the effective date.
What must the initial servicing disclosure include? - CORRECT ANSWER - Whether or not
the lender intends to transfer the servicing of the loan and the lenders history of transferring
servicing.
What must the notice of serving transfer include? - CORRECT ANSWER - Contact info
for both the new lender and the old lender. As well as the following:
-effective date of the transfer
-phone # for both the transferring servicer and the new servicer.
, -name or dept. of both companies for contact to answer questions
-date on which old servicer will cease accepting payments -any
info regarding mortgage life or disability insurance
-a statement advising the borrower that the terms of their loan will not change.
What is the purpose of the aggregate escrow analysis? - CORRECT ANSWER - To reduce
the amount being held in escrow or reserve accounts (accounts for taxes and ins.)
How much may servicers hold as a cushion for escrow? - CORRECT - Two
ANSWER months of taxes, insurance and mortgage insurance as applicable.
How much may servicers collect in each payment? - CORRECT ANSWER - One months
worth of escrowed items unless there is a shortage in the account.
How often must accounts be analyzed? - CORRECT ANSWER - Once every 12 months.
Any overage over what needs to be refunded to the borrower within what time? - CORRECT
ANSWER - Over $50 within 30 days.
What options does the servicer have when the account is short? - CORRECT --
ANSWER do nothing
-require a lump sum deposit into account. However they can only do this if the
shortage/deficiency is less than one months worth of deposits.
-have borrower repay SHORTAGES over 12 months.
-have borrower repay DEFICIENCIES over a 2 month period.
What is the penalty for non-compliance in repaying escrow? - CORRECT --
ANSWER $65/occurrence up to $120k/year if UNintentional.
-$110/occurrence with no limit of INtentional.
