NMLS Exam|(Terms for NMLS) Questions with Complete
Solutions
ReConveyance CORRECT ANS-Method in which a lein is removed from a property when
payment is made in full.
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 CORRECT ANS-
Purpose is to promote the financial stability of US by improving accountability and
transparency in the financial system. Created the Consumer Financial Protection Bureau.
Changed MLO compensation rules
Housing and Economic Recovery Act (HERA) of 2008 CORRECT ANS-Signed by GW Bush.
Est. national minimum standards for mortgage training, including prelicensing and annual
continuing education. Also, under the SAFE Act, all MLO's must beither state-licensed or
federally registered.
SAFE Act - Secure and Fair Enforcement for Mortgage Licensing Act: part of HERA of 2008
CORRECT ANS-Requires all states to implement a MLO licensing process that meets
standards through the Nationwide Mortgage Lending System & Registry (NMLS) In CA that
compliance act is called SB - 36.
,NMLS Exam|(Terms for NMLS) Questions with Complete
Solutions
SAFE Act Objectives CORRECT ANS-*Provide uniform license applications and reporting
requirements
*Provide licensing database
*Improve flow of info to and between regulators
*Provide increased accountability and tracking of MLO's
*Streamline the licensing process
*Enhance consumer protection and support anti-fraud measures
*Provide consumers info about MLO's
*Require MLO's to act in "the best interest of the client"
*Facilitate responsible behavior in the subprime mkt
*Facilitate the collection and disbursement of consumer complaints
Acceleration Clause CORRECT ANS-Allows lenders to demand payment in full if the
borrower defaults on the loan (can be construed as predatory lending)
Alienation Clause (Due on Sale Clause) CORRECT ANS-Says you must repay your mortgage
if you sell your home to a new owner (loan is not assumable)
,NMLS Exam|(Terms for NMLS) Questions with Complete
Solutions
Appraiser Independance Requirements replaced HVCC CORRECT ANS-home valuation code
of conduct
Due on Demand Clause CORRECT ANS-(Considered a predatory practice) The lender can
demand repayment of the loan in full at anytime for any reason
HOEPA CORRECT ANS-Home Ownership and Equity Protection Act (Reg Z Sec 32) Amends
TILA
Nonrecourse Agreement CORRECT ANS-Loan agreement under which the collateral
securing a loan is the unltimate source of repayment, and the lender cannot hold the
borrower personably liable in the event of default. Lender can seize (and sell) the collateral
but cannot seize non-pledged asset or property.
NMLS CORRECT ANS-Started in 2004 by the Conference of State Bank Supervisors (CSBS)
and the American Assoc. of Residential Mortgage Regulators (AARMR) They wrote model
legislation reviewed by HUD for states to follow
, NMLS Exam|(Terms for NMLS) Questions with Complete
Solutions
Mortgage Loan Originator Definition CORRECT ANS-Someone who for compensation or
gain or expectation thereof: takes a residential mortgage loan application or offers or
negotiates terms of a residential mortgage loan
Independent Contractor CORRECT ANS-May not engage in residential mortgage loan
activities as a loan processor or underwriter unless state licensed
Unique Identifier CORRECT ANS-*Required by the SAFE Act for all state licensed MLO's or
federally registered MLO's employed by a depository institution regulated by a federal
banking agency or regulated by the Farm Credit Admin.
*Required on all mktg materials, applications, required disclosures & business cards
FINRA Financial Industry Regulatory Authority CORRECT ANS-Built and maintains the
online NMLS system
RESPA (X) Real Estate Settlement Procedures Act 0f 1974 CORRECT ANS-*Enforced by HUD
Solutions
ReConveyance CORRECT ANS-Method in which a lein is removed from a property when
payment is made in full.
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 CORRECT ANS-
Purpose is to promote the financial stability of US by improving accountability and
transparency in the financial system. Created the Consumer Financial Protection Bureau.
Changed MLO compensation rules
Housing and Economic Recovery Act (HERA) of 2008 CORRECT ANS-Signed by GW Bush.
Est. national minimum standards for mortgage training, including prelicensing and annual
continuing education. Also, under the SAFE Act, all MLO's must beither state-licensed or
federally registered.
SAFE Act - Secure and Fair Enforcement for Mortgage Licensing Act: part of HERA of 2008
CORRECT ANS-Requires all states to implement a MLO licensing process that meets
standards through the Nationwide Mortgage Lending System & Registry (NMLS) In CA that
compliance act is called SB - 36.
,NMLS Exam|(Terms for NMLS) Questions with Complete
Solutions
SAFE Act Objectives CORRECT ANS-*Provide uniform license applications and reporting
requirements
*Provide licensing database
*Improve flow of info to and between regulators
*Provide increased accountability and tracking of MLO's
*Streamline the licensing process
*Enhance consumer protection and support anti-fraud measures
*Provide consumers info about MLO's
*Require MLO's to act in "the best interest of the client"
*Facilitate responsible behavior in the subprime mkt
*Facilitate the collection and disbursement of consumer complaints
Acceleration Clause CORRECT ANS-Allows lenders to demand payment in full if the
borrower defaults on the loan (can be construed as predatory lending)
Alienation Clause (Due on Sale Clause) CORRECT ANS-Says you must repay your mortgage
if you sell your home to a new owner (loan is not assumable)
,NMLS Exam|(Terms for NMLS) Questions with Complete
Solutions
Appraiser Independance Requirements replaced HVCC CORRECT ANS-home valuation code
of conduct
Due on Demand Clause CORRECT ANS-(Considered a predatory practice) The lender can
demand repayment of the loan in full at anytime for any reason
HOEPA CORRECT ANS-Home Ownership and Equity Protection Act (Reg Z Sec 32) Amends
TILA
Nonrecourse Agreement CORRECT ANS-Loan agreement under which the collateral
securing a loan is the unltimate source of repayment, and the lender cannot hold the
borrower personably liable in the event of default. Lender can seize (and sell) the collateral
but cannot seize non-pledged asset or property.
NMLS CORRECT ANS-Started in 2004 by the Conference of State Bank Supervisors (CSBS)
and the American Assoc. of Residential Mortgage Regulators (AARMR) They wrote model
legislation reviewed by HUD for states to follow
, NMLS Exam|(Terms for NMLS) Questions with Complete
Solutions
Mortgage Loan Originator Definition CORRECT ANS-Someone who for compensation or
gain or expectation thereof: takes a residential mortgage loan application or offers or
negotiates terms of a residential mortgage loan
Independent Contractor CORRECT ANS-May not engage in residential mortgage loan
activities as a loan processor or underwriter unless state licensed
Unique Identifier CORRECT ANS-*Required by the SAFE Act for all state licensed MLO's or
federally registered MLO's employed by a depository institution regulated by a federal
banking agency or regulated by the Farm Credit Admin.
*Required on all mktg materials, applications, required disclosures & business cards
FINRA Financial Industry Regulatory Authority CORRECT ANS-Built and maintains the
online NMLS system
RESPA (X) Real Estate Settlement Procedures Act 0f 1974 CORRECT ANS-*Enforced by HUD
