NATIONAL & UST MORTGAGE PRACTICE EXAM #7 QUESTIONS AND ANSWERS

NATIONAL & UST MORTGAGE
PRACTICE EXAM #7 QUESTIONS AND
ANSWERS
InformationA2thatA2wouldA2beA2protectedA2asA2nonpublicA2personalA2informationA2underA2t
heA2Gramm-Leach-BlileyA2ActA2includesA2whichA2ofA2theA2following?
(A)A2AA2customer'sA2creditA2report.
(B)A2InformationA2inA2governmentA2realA2estateA2records.
(C)A2ListedA2telephoneA2numbersA2providedA2byA2consumers.
(D)A2GovernmentA2recordsA2ofA2recordedA2liens.A2-A2Ans--
(A)A2AA2customer'sA2creditA2report.

Virtually,A2everyA2residentialA2transactionA2involvesA2anA2estateA2thatA2isA2heldA2inA2_____
_____,A2theA2desiredA2formA2ofA2holdingA2ownershipA2toA2propertyA2becauseA2itA2hasA2the
A2fewestA2restrictions.
(A)A2Foreclosure
(B)A2FeeA2simple
(C)A2ShortA2sale
(D)A2Deed-in-lieuA2-A2Ans--(B)A2FeeA2simple

UnderA2theA2HomeownersA2ProtectionA2Act,A2borrowersA2canA2requestA2thatA2lendersA2ca
ncelA2PMIA2whenA2theirA2loanA2balanceA2isA2lessA2thanA2__________,A2orA2aA2lenderA2ma
yA2collectA2PMIA2untilA2__________A2loan-to-valueA2isA2reached.
(A)A265%,A250%
(B)A278%,A262%
(C)A280%,A278%
(D)A280%,A265%A2-A2Ans--(C)A280%,A278%

WhichA2ofA2theA2followingA2isA2notA2trueA2regardingA2qualifiedA2mortgages?
(A)A2TheyA2generallyA2mayA2notA2haveA2aA2DTIA2ratioA2ofA2moreA2thanA243%.
(B)A2TheyA2mustA2haveA2aA2fixedA2interestA2rate.
(C)A2TheA2loanA2termA2mayA2notA2exceedA230A2years.
(D)A2TheA2loanA2mayA2notA2includeA2aA2featureA2thatA2permitsA2negativeA2amortization.A2-
A2Ans--(B)A2TheyA2mustA2haveA2aA2fixedA2interestA2rate.


WhichA2ofA2theA2followingA2wouldA2notA2beA2requiredA2forA2anA2adjustableA2rateA2homeA2e
quityA2plan?
(A)A2WhatA2YouA2ShouldA2KnowA2aboutA2HomeA2EquityA2LinesA2ofA2Credit
(B)A2DisclosureA2ofA2APRA2fees,A2andA2transactionA2requirements.
(C)A2DisclosureA2ofA2frequencyA2ofA2APRA2changesA2andA2aA2descriptionA2ofA2howA2theA2
APRA2willA2beA2determined.

,(D)A2LoanA2EstimateA2andA2ClosingA2DisclosureA2-A2Ans--
(D)A2LoanA2EstimateA2andA2ClosingA2Disclosure

HowA2isA2theA2marginA2determined?
(A)A2TheA2brokerA2determinesA2marginA2basedA2onA2theA2commissionA2structureA2onA2the
A2loan.A2
(B)A2TheA2lenderA2setsA2theA2marginA2byA2choosingA2anA2indexA2toA2tieA2itA2to.
(C)A2TheA2borrowerA2choosesA2whichA2marginA2heA2orA2sheA2prefers.
(D)A2TheA2lenderA2setsA2theA2marginA2basedA2onA2itsA2costsA2andA2soughtA2afterA2profitA2
margin.A2-A2Ans--
(D)A2TheA2lenderA2setsA2theA2marginA2basedA2onA2itsA2costsA2andA2soughtA2afterA2profitA2
margin.

TheA2TRIDA2ruleA2includesA2aA2provisionA2statingA2thatA2aA2consumersA2intentA2toA2procee
dingA2withA2aA2lendingA2transaction:
(A)A2MustA2beA2statedA2inA2writing.A2
(B)A2IsA2madeA2whenA2theA2consumerA2submitsA2aA2completedA2loanA2application.
(C)A2MustA2beA2submittedA2onA2aA2formA2providedA2byA2theA2creditor.
(D)A2MayA2beA2oralA2orA2written.A2-A2Ans--(D)A2MayA2beA2oralA2orA2written.

WhatA2typeA2ofA2loanA2isA2aA2jumboA2loan?
(A)A2NonconventialA2
(B)A2Non-government
(C)A2Nonconforming
(D)A2ConformingA2-A2Ans--(C)A2Nonconforming

AA2subordinateA2leanA2thatA2allowsA2aA2borrowA2toA2payA2downA2principalA2andA2continueA
2toA2makeA2withdrawalsA2isA2knownA2as:
(A)A2AA2reverseA2mortgage
(B)A2AnA2ARM
(C)A2AA2homeA2equityA2lineA2ofA2credit
(D)A2AA2piggybackA2loanA2-A2Ans--(C)A2AA2homeA2equityA2lineA2ofA2credit

AA2borrowerA2paysA2$200,000A2forA2aA2homeA2andA2getsA2aA2fixed-
rateA2loanA2fromA2hisA2lenderA2atA25.75%.A2HeA2putsA2$40,000A2down.A2WhatA2isA2theA2LT
VA2onA2thisA2loan,A2andA2doesA2theA2buyerA2haveA2toA2payA2PMI?
(A)A280%A2andA2yes
(B)A290%A2andA2yes
(C)A280%A2andA2no
(D)A2NeedA2toA2knowA2theA2term.A2-A2Ans--(C)A280%A2andA2no

TheA2front-endA2ratioA2compares:
(A)A2MonthlyA2mortgageA2paymentsA2toA2monthlyA2grossA2income.
(B)A2TotalA2monthlyA2debtsA2unrelatedA2toA2housingA2expensesA2toA2monthlyA2grossA2inco
me.

, (C)A2TotalA2monthlyA2housingA2expensesA2(includingA2principal,A2interest,A2taxes,A2andA2in
surance)A2toA2monthlyA2grossA2income.A2
(D)A2TotalA2monthlyA2debtsA2(includingA2housingA2expensesA2plusA2otherA2debts)A2toA2mo
nthlyA2grossA2income.A2-A2Ans--
(C)A2TotalA2monthlyA2housingA2expensesA2(includingA2principal,A2interest,A2taxes,A2andA2in
surance)A2toA2monthlyA2grossA2income.

TheA2legalA2documentA2thatA2authorizesA2oneA2personA2toA2actA2onA2behalfA2ofA2anotherA2i
sA2called:
(A)A2LegalA2prerogativeA2
(B)A2PowerA2ofA2attorney
(C)A2FiduciaryA2authorization
(D)A2ProxyA2agreementA2-A2Ans--(B)A2PowerA2ofA2attorney

WhichA2ofA2theA2followingA2wouldA2beA2aA2redA2flagA2ofA2attemptedA2mortgageA2fraud:
(A)A2TheA2consumerA2isA2fairlyA2youngA2butA2makesA2aA2substantialA2salary,A2asA2statedA2
onA2theA2loanA2applicationA2andA2W-2's.
(B)A2TheA2consumer'sA2socialA2securityA2numberA2beginsA2withA2zero.
(C)A2TheA2applicantA2runsA2aA2smallA2businessA2fromA2homeA2andA2onlyA2listsA2aA2homeA2
phoneA2number.A2
(D)A2TheA2propertyA2ownerA2andA2theA2propertyA2sellerA2areA2twoA2differentA2individuals.A2
-A2Ans--
(D)A2TheA2propertyA2ownerA2andA2theA2propertyA2sellerA2areA2twoA2differentA2individuals.

TheA2HomeownersA2ProtectionA2ActA2isA2applicableA2toA2allA2butA2whichA2ofA2theA2followin
g:
(A)A2Lenders
(B)A2LoanA2servicers
(C)A2Appraisers
(D)A2MortgageA2insuranceA2companiesA2-A2Ans--(C)A2Appraisers

WhichA2appraisalA2approachA2isA2mostA2commonlyA2usedA2toA2appraiseA2newA2homeA2co
nstruction?
(A)A2TheA2incomeA2approach
(B)A2TheA2costA2approach
(C)A2TheA2salesA2comparisonA2approach
(D)A2TheA2marketA2approachA2-A2Ans--(B)A2TheA2costA2approach

IfA2aA2homeownersA2intendsA2toA2useA2rentalA2incomeA2forA2qualifications,A2whatA2amount
A2ofA2thatA2incomeA2isA2allowable?
(A)A2TheA2firstA2$750
(B)A2100%A2ifA2theA2homeA2isA2unencumberedA2
(C)A2TheA2incomeA2isA2notA2allowableA2unlessA2aA2leaseA2hasA2beenA2inA2affectA2forA2fiveA2
yearsA2orA2more
(D)A275%A2ofA2theA2rentalA2incomeA2-A2Ans--(D)A275%A2ofA2theA2rentalA2income