NMLS SAFE Exam Test Questions With 100% Verified Answers Graded A+
Where credit institutions originate loans - Advertised term that requires additional
ANSWER -Primary Mortgage Market disclosures - ANSWER -Trigger Term
When an ARM has rate caps of 5/2/6, the 6 An advertisement must be presented "clearly and
refers to what? conspicuously" to keep from being deceptive,
A. The maximum rate increase at the initial unfair, or otherwise violate a Commission rule -
adjustment ANSWER -Advertising Disclosure
B. The start rate for the loan
C. The maximum the rate can increase over the
life of the loan
D. The rate maximum the rate can decrease over Extenuating circumstances such as "bona fide
the life of the loan - ANSWER -C. The personal financial emergency - ANSWER -
maximum the rate can increase over the life of Waving Right of Rescission
the loan
Right that borrowers have to cancel a loan or line
When utilizing a temporary buydown to lower the of credit with a lender within three days of closing
interest rate on a FHA loan, which of the - ANSWER -Right of Rescission
following are correct
A. The borrower qualified at the note rate
B. The borrower qualified at the buydown rate
C. The rate cannot be more than 2% below the When creditors office is open to the public, a
note rate calendar working day except Sunday or a federal
D. Seller or builder can pay the discount points to
holiday - ANSWER -Business Day
buydown the rate - ANSWER -B. The
borrower qualified at the buydown rate
Financial information used for purposes of
obtaining an extension of credit -
All of the following are violations of the Fair
ANSWER -Application
Housing Act EXCEPT
A. Age
B. National Origin
C. Disability
The act of making new information known -
D.Religion - ANSWER -A. Age
ANSWER -Disclosure
Claim against property held by one who is not
Mission is to promote consumer protection and
the legal owner - ANSWER -Encrumbrance eliminate and prevent anticompetitive business
practices - ANSWER -FTC
Federal Trade Commission
,NMLS SAFE Exam Test Questions With 100% Verified Answers Graded A+
permanent interest rate is reached -
ANSWER -2/1 Buydown
Regulatory agency charged with overseeing
financial products and services offered to
consumers - ANSWER -CFPB A form of pre-paid interest which effectively
Consumer Financial Protection Bureau increases the yield on the loan above the amount
of the stated interest rate - ANSWER -
Discount Point
Enacted 1968 promotes the informed use of
consumer credit by requiring disclosures about
terms and costs and standardizes the manner in An amount in addition to the Loan to Value,
which costs with borrowing are calculated and which simply represents the first position
disclosed - ANSWER -TILA mortgage or loan as a percentage of the
Truth in Lending Act property's value - ANSWER -CLTV
Combined Loan to Value
Interest charged on a loan for one or more days -
ANSWER -Per Diem Interest Ratio of a loan to the value of an asset
purchased - ANSWER -LTV
Loan to Value
Principal (X) Interest Rate = Annual Interest Rate
- ANSWER -Annual Interest Rate Formula
Principal, Interest, Taxes, Insurance
Refers to the components of a mortgage
payment - ANSWER -PITI
Mortgage where the mortgagor is only required
to pay off the interest that arises from the
principal that is borrowed for a set period -
ANSWER -Interest Only Mortgage Housing to Debt
Ratio that measures an individual's ability to
manage monthly payment and repay debts -
ANSWER -DIF
Borrower chooses to pay additional "discount
points" to buy down the interest rate for the life of
the mortgage note - ANSWER -Permanent
Buydown Agreement between the lender and the borrower
to delay foreclosure - ANSWER -
Forbearance
Used on fixed rate loans over two years
Set of two initial temporary-start interest rates
that increase in stair-step fashion until a A permanent restructuring of the mortgage where
,NMLS SAFE Exam Test Questions With 100% Verified Answers Graded A+
one or more of the terms of a borrower's loan are
changed to provide a more affordable payment -
ANSWER -Loan Modification
Serves as a central repository of information
about a parcel of land - ANSWER -Title
Record
Legal process to collect debt on mortgaged
property - ANSWER -Foreclosure
Payment received by lender after selling a loan
Based on market value - ANSWER -SRP
Document generated and signed by a mortgage Service Release Premiums
lender, acknowledging that the borrower has
paid off the mortgage loan in full and the
mortgage is not a lien on the property -
ANSWER -Satisfaction of Mortgage Letter Created in 1968, goal to expand affordable
housing under HUD - ANSWER -GNMA
Government National Mortgage Association
When two mortgages are on a property, this
specifies which mortgage takes precedence -
ANSWER -Subordination Agreement Created 1968 works with Fannie Mae to increase
affordable lending - ANSWER -FNMA
Federal National Mortgage Association
Provides homeowner proof the mortgage is paid
off - ANSWER -Payoff Statement
Insures banks real estate loans and charges
borrowers a small premium - ANSWER -
FHA
Legal presumption that anything recorded in a Federal Housing Administration
public record can be known by anyone -
ANSWER -Constructive Note
A loan in which the lender agrees to lend a
maximum amount within an agreed period
Direct knowledge that one has of the property - and is also an open-ended mortgage transaction
ANSWER -Actual Note that is secured - ANSWER -HELOC
Home Equity Line of Credit
Information that should compel a reasonable
person to make further inquiries about some A FHA insured reverse mortgage that allows the
aspect of the property - ANSWER -Inquiry conversion of equity in a home to cash -
Note ANSWER -HECM
Home Equity Conversion Mortgage
, NMLS SAFE Exam Test Questions With 100% Verified Answers Graded A+
Not guaranteed or insured by the government but
A mortgage in which a large portion of the can still follow federal guidelines -
borrowed principal is repaid in a single payment ANSWER -Conventional Loan
at the end of the loan period and does not
amortize - ANSWER -Balloon Mortgage
Accelerated loan repayment if property is in
default - ANSWER -Acceleration Clause
Margin + Interset = Rate - ANSWER -ARM
Interest Rate Adjustment
Relieves one party form liability due to actions of
another party - ANSWER -Exculpatory
Regional average of interest expenses incurred Clause
by financial institutions which in turn is used as a
base for calculating variable rate loans -
ANSWER -COFI
Cost of Fund Index Creditor can obtain title without foreclosure
process - ANSWER -Defeasance Clause
Loan that is lower than fixed rate in beginning
Loan payment changes over time When fees are attached to late payment -
Adjustable caps that vary ANSWER -Late Payement Penalty
Used to obtain a higher loan amount -
ANSWER -ARM
Adjustable Rate Mortgage
Fixed sum added to loan if loan is paid off early -
ANSWER -Pre-Payment Penalty
Interest rate that remains the same over the life
of the loan - ANSWER -Fixed Rate
Complete financing and sales contract agreed
upon by seller and seller with no note attached -
ANSWER -Contract of Deed
Does not meet Freddie Mac or Fannie Mae
guidelines - ANSWER -Non-Conforming
Loan
Promise to repay debt - ANSWER -Note
Conforms to terms and conditions set by
government - ANSWER -Conforming Loan Pledge of collateral to secure a loan -
Where credit institutions originate loans - Advertised term that requires additional
ANSWER -Primary Mortgage Market disclosures - ANSWER -Trigger Term
When an ARM has rate caps of 5/2/6, the 6 An advertisement must be presented "clearly and
refers to what? conspicuously" to keep from being deceptive,
A. The maximum rate increase at the initial unfair, or otherwise violate a Commission rule -
adjustment ANSWER -Advertising Disclosure
B. The start rate for the loan
C. The maximum the rate can increase over the
life of the loan
D. The rate maximum the rate can decrease over Extenuating circumstances such as "bona fide
the life of the loan - ANSWER -C. The personal financial emergency - ANSWER -
maximum the rate can increase over the life of Waving Right of Rescission
the loan
Right that borrowers have to cancel a loan or line
When utilizing a temporary buydown to lower the of credit with a lender within three days of closing
interest rate on a FHA loan, which of the - ANSWER -Right of Rescission
following are correct
A. The borrower qualified at the note rate
B. The borrower qualified at the buydown rate
C. The rate cannot be more than 2% below the When creditors office is open to the public, a
note rate calendar working day except Sunday or a federal
D. Seller or builder can pay the discount points to
holiday - ANSWER -Business Day
buydown the rate - ANSWER -B. The
borrower qualified at the buydown rate
Financial information used for purposes of
obtaining an extension of credit -
All of the following are violations of the Fair
ANSWER -Application
Housing Act EXCEPT
A. Age
B. National Origin
C. Disability
The act of making new information known -
D.Religion - ANSWER -A. Age
ANSWER -Disclosure
Claim against property held by one who is not
Mission is to promote consumer protection and
the legal owner - ANSWER -Encrumbrance eliminate and prevent anticompetitive business
practices - ANSWER -FTC
Federal Trade Commission
,NMLS SAFE Exam Test Questions With 100% Verified Answers Graded A+
permanent interest rate is reached -
ANSWER -2/1 Buydown
Regulatory agency charged with overseeing
financial products and services offered to
consumers - ANSWER -CFPB A form of pre-paid interest which effectively
Consumer Financial Protection Bureau increases the yield on the loan above the amount
of the stated interest rate - ANSWER -
Discount Point
Enacted 1968 promotes the informed use of
consumer credit by requiring disclosures about
terms and costs and standardizes the manner in An amount in addition to the Loan to Value,
which costs with borrowing are calculated and which simply represents the first position
disclosed - ANSWER -TILA mortgage or loan as a percentage of the
Truth in Lending Act property's value - ANSWER -CLTV
Combined Loan to Value
Interest charged on a loan for one or more days -
ANSWER -Per Diem Interest Ratio of a loan to the value of an asset
purchased - ANSWER -LTV
Loan to Value
Principal (X) Interest Rate = Annual Interest Rate
- ANSWER -Annual Interest Rate Formula
Principal, Interest, Taxes, Insurance
Refers to the components of a mortgage
payment - ANSWER -PITI
Mortgage where the mortgagor is only required
to pay off the interest that arises from the
principal that is borrowed for a set period -
ANSWER -Interest Only Mortgage Housing to Debt
Ratio that measures an individual's ability to
manage monthly payment and repay debts -
ANSWER -DIF
Borrower chooses to pay additional "discount
points" to buy down the interest rate for the life of
the mortgage note - ANSWER -Permanent
Buydown Agreement between the lender and the borrower
to delay foreclosure - ANSWER -
Forbearance
Used on fixed rate loans over two years
Set of two initial temporary-start interest rates
that increase in stair-step fashion until a A permanent restructuring of the mortgage where
,NMLS SAFE Exam Test Questions With 100% Verified Answers Graded A+
one or more of the terms of a borrower's loan are
changed to provide a more affordable payment -
ANSWER -Loan Modification
Serves as a central repository of information
about a parcel of land - ANSWER -Title
Record
Legal process to collect debt on mortgaged
property - ANSWER -Foreclosure
Payment received by lender after selling a loan
Based on market value - ANSWER -SRP
Document generated and signed by a mortgage Service Release Premiums
lender, acknowledging that the borrower has
paid off the mortgage loan in full and the
mortgage is not a lien on the property -
ANSWER -Satisfaction of Mortgage Letter Created in 1968, goal to expand affordable
housing under HUD - ANSWER -GNMA
Government National Mortgage Association
When two mortgages are on a property, this
specifies which mortgage takes precedence -
ANSWER -Subordination Agreement Created 1968 works with Fannie Mae to increase
affordable lending - ANSWER -FNMA
Federal National Mortgage Association
Provides homeowner proof the mortgage is paid
off - ANSWER -Payoff Statement
Insures banks real estate loans and charges
borrowers a small premium - ANSWER -
FHA
Legal presumption that anything recorded in a Federal Housing Administration
public record can be known by anyone -
ANSWER -Constructive Note
A loan in which the lender agrees to lend a
maximum amount within an agreed period
Direct knowledge that one has of the property - and is also an open-ended mortgage transaction
ANSWER -Actual Note that is secured - ANSWER -HELOC
Home Equity Line of Credit
Information that should compel a reasonable
person to make further inquiries about some A FHA insured reverse mortgage that allows the
aspect of the property - ANSWER -Inquiry conversion of equity in a home to cash -
Note ANSWER -HECM
Home Equity Conversion Mortgage
, NMLS SAFE Exam Test Questions With 100% Verified Answers Graded A+
Not guaranteed or insured by the government but
A mortgage in which a large portion of the can still follow federal guidelines -
borrowed principal is repaid in a single payment ANSWER -Conventional Loan
at the end of the loan period and does not
amortize - ANSWER -Balloon Mortgage
Accelerated loan repayment if property is in
default - ANSWER -Acceleration Clause
Margin + Interset = Rate - ANSWER -ARM
Interest Rate Adjustment
Relieves one party form liability due to actions of
another party - ANSWER -Exculpatory
Regional average of interest expenses incurred Clause
by financial institutions which in turn is used as a
base for calculating variable rate loans -
ANSWER -COFI
Cost of Fund Index Creditor can obtain title without foreclosure
process - ANSWER -Defeasance Clause
Loan that is lower than fixed rate in beginning
Loan payment changes over time When fees are attached to late payment -
Adjustable caps that vary ANSWER -Late Payement Penalty
Used to obtain a higher loan amount -
ANSWER -ARM
Adjustable Rate Mortgage
Fixed sum added to loan if loan is paid off early -
ANSWER -Pre-Payment Penalty
Interest rate that remains the same over the life
of the loan - ANSWER -Fixed Rate
Complete financing and sales contract agreed
upon by seller and seller with no note attached -
ANSWER -Contract of Deed
Does not meet Freddie Mac or Fannie Mae
guidelines - ANSWER -Non-Conforming
Loan
Promise to repay debt - ANSWER -Note
Conforms to terms and conditions set by
government - ANSWER -Conforming Loan Pledge of collateral to secure a loan -
