NATIONAL AND UST MORTGAGE PRACTICE EXAM 4 QUESTIONS AND CORRECT ANSWERS

NATIONAL AND UST MORTGAGE
PRACTICE EXAM 4 QUESTIONS AND
CORRECT ANSWERS
TheA2administrativeA2authorityA2ofA2theA2CommissionerA2includesA2allA2butA2whichA2ofA2th
eA2following?
PromulgateA2rulesA2orA2regulationsA2implementingA2theA2S.A.F.E.A2Act
Administer,A2interpret,A2andA2enforceA2theA2S.A.F.E.A2Act
CarryA2outA2theA2intentionsA2ofA2theA2Legislature
SentencingA2violatorsA2ofA2theA2S.A.F.E.A2ActA2toA2appropriateA2prisonA2termsA2-A2Ans--
TheA2answerA2isA2sentencingA2violatorsA2ofA2theA2S.A.F.E.A2ActA2toA2appropriateA2prisonA2
terms.A2StateA2regulators,A2suchA2asA2aA2Commissioner,A2areA2notA2responsibleA2forA2det
erminingA2criminalA2sentencesA2forA2violatorsA2ofA2theA2S.A.F.E.A2Act.

WhichA2ofA2theA2followingA2formsA2ofA2compensationA2isA2aA2violationA2ofA2RESPA?
AA2feeA2paidA2byA2aA2titleA2companyA2toA2anA2originatorA2forA2referralA2ofA2settlementA2serv
ices
BorrowerA2credit
MoneyA2earnedA2byA2aA2titleA2companyA2forA2closingA2aA2loan
BrokerA2feeA2-A2Ans--
TheA2answerA2isA2aA2feeA2paidA2byA2aA2titleA2companyA2toA2anA2originatorA2forA2referralA2of
A2settlementA2services.A2RESPAA2requiresA2anyA2feesA2toA2beA2"earned."A2ReferralA2feesA
2areA2consideredA2aA2violation.


WhenA2isA2itA2legalA2toA2refuseA2toA2conductA2aA2lendingA2transactionA2withA2aA2consumerA
2onA2theA2basisA2ofA2theirA2personalA2characteristics?
TheA2consumerA2isA2aA2minorityA2whoA2mayA2needA2assistanceA2withA2closingA2costs
AA2largeA2percentageA2ofA2theA2borrower'sA2incomeA2isA2fromA2publicA2assistance
TheA2applicantA2isA2marriedA2butA2applyingA2individually
TheA2borrowerA2isA2tooA2youngA2toA2haveA2legalA2authorityA2toA2enterA2aA2bindingA2contrac
tA2-A2Ans--
TheA2answerA2isA2theA2borrowerA2isA2tooA2youngA2toA2haveA2legalA2authorityA2toA2enterA2aA
2bindingA2contract.A2AA2creditorA2mayA2considerA2theA2personalA2characteristicsA2ofA2theA2
applicantA2ifA2theA2applicantA2isA2notA2ofA2legalA2ageA2toA2enterA2aA2bindingA2contract

AllA2ofA2theA2followingA2typesA2ofA2informationA2mustA2beA2reportedA2forA2governmentA2mo
nitoringA2purposesA2inA2accordanceA2withA2HMDA,A2except:
IdentificationA2ofA2loansA2subjectA2toA2HOEPA
ActionA2takenA2onA2theA2loanA2andA2theA2locationA2ofA2theA2subjectA2property
Ethnicity,A2race,A2sex,A2andA2incomeA2ofA2theA2applicant
Ethnicity,A2race,A2sex,A2andA2religionA2ofA2theA2applicantA2-A2Ans--
TheA2answerA2isA2ethnicity,A2race,A2sex,A2andA2religionA2ofA2theA2applicant.A2HMDAA2moni
toringA2requiresA2theA2collectionA2ofA2extensiveA2dataA2aboutA2eachA2mortgageA2loanA2app

,licationA2andA2origination.A2ThisA2includesA2anyA2actionA2takenA2onA2theA2loan,A2indication
A2ofA2whetherA2theA2loanA2isA2subjectA2toA2HOEPA,A2andA2theA2ethnicity,A2race,A2sex,A2and
A2incomeA2ofA2theA2applicant.A2HMDAA2doesA2notA2requireA2theA2collectionA2ofA2informatio
nA2aboutA2anA2applicant'sA2religion.

WhichA2ofA2theA2followingA2borrowersA2isA2bestA2suitedA2forA2anA2HECM?
AA2borrowerA2whoA2needsA2moneyA2forA2severalA2homeA2improvementA2projects
AA262-yearA2oldA2borrowerA2whoA2justA2cashedA2inA2aA2401kA2forA2aA2downA2payment
AA2borrowerA2whoA2wasA2disabledA2duringA2serviceA2forA2theA2military
AA265-year-
oldA2borrowerA2withoutA2aA2mortgageA2whoA2wouldA2likeA2toA2supplementA2hisA2incomeA2-
A2Ans--TheA2answerA2isA2aA265-year-
oldA2borrowerA2withoutA2aA2mortgageA2whoA2wouldA2likeA2toA2supplementA2hisA2income.A2
HomeA2equityA2conversionA2mortgagesA2allowA2elderlyA2borrowersA2whoA2haveA2significa
ntA2equityA2inA2theirA2homesA2theA2opportunityA2toA2drawA2onA2thatA2equity,A2withoutA2repa
yment,A2asA2longA2asA2theyA2continueA2toA2liveA2inA2theA2home.

AA2consumerA2signsA2aA2closed-
endA2lendingA2agreementA2onA2Wednesday.A2WhatA2isA2theA2latestA2thatA2he/
sheA2mayA2waitA2toA2exerciseA2theA2rightA2toA2rescind?
MidnightA2onA2Friday
MidnightA2onA2Saturday
MidnightA2onA2Monday
MidnightA2onA2TuesdayA2-A2Ans--
TheA2answerA2isA2midnightA2onA2Saturday.A2AA2consumerA2forA2aA2closed-
endA2loanA2mayA2exerciseA2theA2rightA2toA2rescindA2atA2anyA2timeA2upA2untilA2midnightA2ofA
2theA2thirdA2businessA2dayA2afterA2signingA2theA2lendingA2agreement.A2ForA2theA2purposes
A2ofA2calculatingA2timeA2limitationsA2forA2rescission,A2SaturdaysA2areA2consideredA2toA2beA
2businessA2daysA2-
A2meaningA2thatA2ifA2theA2consumerA2signedA2anA2agreementA2onA2Wednesday,A2theA2late
stA2heA2orA2sheA2mayA2waitA2beforeA2exercisingA2theA2rightA2toA2rescindA2wouldA2beA2midni
ghtA2onA2Saturday.

IfA2aA2borrowerA2isA2requiredA2toA2payA2alimonyA2orA2childA2support,A2itA2mustA2beA2include
dA2asA2a(n):
Asset
Liability
Qualifier
MitigatingA2circumstanceA2-A2Ans--
TheA2answerA2isA2liability.A2AlimonyA2andA2childA2supportA2mustA2beA2includedA2inA2aA2borr
ower'sA2liabilitiesA2ifA2theyA2areA2requiredA2toA2pay.

AccordingA2toA2theA2SAFEA2Act,A2whichA2ofA2theA2followingA2isA2definedA2asA2aA2nontraditi
onalA2mortgageA2product?
AnyA2mortgageA2productA2otherA2thanA2aA230-yearA2fixed-rateA2mortgage
AA230-yearA2fixed-rateA2mortgage

,AnA2ARMA2loanA2withA2aA25-yearA2fixed-rateA2period
AA215-yearA2fixed-rateA2mortgageA2-A2Ans--
TheA2answerA2isA2anyA2mortgageA2productA2otherA2thanA2aA230-yearA2fixed-
rateA2mortgage.A2TheA2SAFEA2ActA2definesA2aA2"nontraditionalA2mortgageA2product"A2asA2
anyA2productA2otherA2thanA2aA230-yearA2fixed-rateA2mortgage.

AA2lenderA2whoA2refusesA2toA2originateA2loansA2inA2aA2particularA2neighborhoodA2orA2ZIPA2
codeA2becauseA2ofA2theA2perceivedA2creditworthinessA2ofA2consumersA2livingA2inA2theA2ar
eaA2isA2inA2violationA2of:
FCRA
ECOA
HOEPA
RESPAA2-A2Ans--
TheA2answerA2isA2ECOA.A2RefusingA2toA2originateA2loansA2inA2aA2particularA2neighborhoo
dA2orA2ZIPA2codeA2becauseA2ofA2perceivedA2creditworthinessA2isA2aA2practiceA2knownA2as
A2"redlining"A2andA2isA2aA2violationA2ofA2ECOA.


ECOAA2appliesA2toA2theA2extensionA2ofA2creditA2for:
LoansA2securedA2byA2aA2firstA2orA2subordinateA2lienA2onA2residentialA2property
Residential,A2business,A2commercial,A2andA2agriculturalA2loans
Business,A2commercial,A2andA2agriculturalA2loans
AllA2creditA2otherA2thanA2governmentA2loansA2-A2Ans--
TheA2answerA2isA2residential,A2business,A2commercial,A2andA2agriculturalA2loans.A2ECOAA
2hasA2aA2widerA2rangeA2thanA2RESPAA2andA2TILA,A2beyondA2justA2loansA2relatedA2toA2resi
dentialA2properties.A2TheA2lawA2alsoA2coversA2loansA2forA2businesses,A2commercial,A2and
A2agriculturalA2loans.


WhichA2lawA2restrictsA2theA2sharingA2ofA2nonpublicA2personalA2informationA2givenA2whenA2
aA2consumerA2appliesA2forA2aA2mortgageA2loan?
FairA2CreditA2ReportingA2Act
FTCA2DisposalA2Rules
Gramm-Leach-BlileyA2Act
ConsumerA2RegulatoryA2ProtectionA2ActA2-A2Ans--TheA2answerA2isA2Gramm-Leach-
BlileyA2Act.A2TheA2Gramm-Leach-
BlileyA2ActA2isA2theA2federalA2lawA2thatA2limitsA2orA2restrictsA2theA2useA2ofA2aA2consumer'sA
2nonpublicA2personalA2information.


InA2theA2absenceA2ofA2caps,A2adjustmentsA2onA2anA2ARMA2loanA2wouldA2beA2determinedA2
solelyA2by:
TheA2index
TheA2margin
TheA2fully-indexedA2rate
TheA2lifetimeA2rateA2-A2Ans--TheA2answerA2isA2theA2fully-
indexedA2rate.A2IfA2thereA2wereA2noA2capsA2involved,A2anA2ARMA2wouldA2adjustA2basedA2o
nA2theA2movementA2ofA2theA2fully-
indexedA2rateA2(marginA2+A2index).A2ItA2wouldA2notA2beA2adjustedA2basedA2onA2indexA2alo

, neA2orA2marginA2alone.A2WhileA2theA2marginA2doesA2notA2changeA2overA2time,A2itA2mustA2b
eA2combinedA2withA2theA2fluctuatingA2indexA2toA2findA2theA2newA2rate.A2ItA2isA2notA2sufficien
tA2toA2applyA2onlyA2theA2indexA2orA2onlyA2theA2marginA2toA2theA2adjustmentA2-
A2theyA2mustA2beA2combinedA2intoA2theA2fully-indexedA2rate.


WhichA2ofA2theA2followingA2wouldA2preventA2theA2conveyanceA2ofA2title?
PaidA2lien
OwnerA2diesA2andA2leavesA2aA2legalA2will
Encumbrance
FatherA2passingA2titleA2toA2hisA2sonA2whileA2stillA2livingA2-A2Ans--
TheA2answerA2isA2encumbrance.A2AnA2encumbranceA2wouldA2preventA2theA2conveyanceA
2ofA2title,A2meaningA2thereA2isA2aA2debtA2orA2lienA2againstA2theA2propertyA2andA2titleA2mayA2
notA2changeA2handsA2untilA2theA2debtA2orA2lienA2isA2satisfied.

TheA2examinationA2ofA2countyA2andA2municipalA2recordsA2toA2determineA2theA2legalA2statu
sA2ofA2aA2propertyA2isA2called:
TitleA2insurance
TitleA2search
TitleA2binder
TitleA2commitmentA2-A2Ans--
TheA2answerA2isA2titleA2search.A2TheA2titleA2searchA2isA2theA2firstA2stepA2inA2theA2titleA2proc
ess.A2ItA2involvesA2anA2abstractorA2orA2anA2attorneyA2searchingA2countyA2orA2municipalA2r
ecordsA2toA2determineA2theA2statusA2ofA2aA2property.

AA2state-licensedA2loanA2originatorA2is:
LicensedA2byA2theA2NMLS
AnA2employeeA2ofA2aA2non-depositoryA2institution
IdentifiedA2byA2theA2uniqueA2identifierA2ofA2his/herA2employer
AnA2employeeA2ofA2aA2subsidiaryA2whichA2isA2ownedA2orA2controlledA2byA2aA2depositoryA2i
nstitutionA2-A2Ans--TheA2answerA2isA2anA2employeeA2ofA2aA2non-
depositoryA2institution.A2AA2state-
licensedA2loanA2originatorA2isA2anA2employeeA2ofA2aA2non-
depositoryA2institutionA2andA2isA2licensedA2byA2theA2state.A2AnA2originatorA2employedA2byA
2aA2depositoryA2orA2theA2FarmA2CreditA2AdministrationA2wouldA2beA2registered.


MisleadingA2claimsA2ofA2debtA2eliminationA2inA2anA2advertisementA2mayA2leadA2aA2borrow
erA2toA2inaccuratelyA2believeA2that:
ConsumerA2debtA2isA2"disappearing"A2asA2aA2resultA2ofA2theA2newA2loan
TheA2borrower'sA2newA2loanA2willA2lowerA2theA2overallA2monthlyA2outlay
TheA2borrowerA2isA2extendingA2whatA2mayA2haveA2beenA2aA2short-
termA2debtA2outA2overA2aA2longerA2period
TheA2borrowerA2mayA2gainA2someA2taxA2benefitA2byA2rollingA2consumerA2debtA2intoA2theA2
newA2mortgageA2loanA2-A2Ans--
TheA2answerA2isA2consumerA2debtA2isA2"disappearing"A2asA2aA2resultA2ofA2theA2newA2loan.
A2"DebtA2elimination"A2isA2aA2regularA2claimA2ofA2someA2mortgageA2professionalsA2thatA2sp
ecializeA2inA2consolidationA2loans,A2andA2itA2isA2oftenA2veryA2misleading.A2SomeA2borrowe