NMLS SAFE EXAM PREP QUESTIONS & ANSWERS
ECOA - Reg B - Answer -Equal Credit Opportunity Act
HMDA - Reg C - Answer -Home Mortgage Disclosure Act
RESPA - Reg X - Answer -Real Estate Settlement Procedures Act
TILA - Reg Z - Answer -Truth In Lending Act
HPA - Answer -Home-owner Protection Act
PMI is required when - Answer -Borrower puts less than 20% down
ECOA deals with - Answer -credit applications
HMDA allows to see - Answer -where possible discrimination takes place
Where is HMDA found - Answer -Section 10 of the 1003 loan app
PMI - Answer -Private mortgage insurance
TILA deals with - Answer -advertising of loans, cerdit, APR
PMI protects who - Answer -The Lender
SAFE - Answer -Secure And Fair Enforcement Act
HERA - Answer -Housing and Economic Recovery Act
HERA created what act - Answer -SAFE Act
FCRA - Reg V - Answer -Fair Credit Reporting Act
What does FCRA deal with - Answer -credit report
FACT - Answer -Fair and Accurate Credit Transactions
What does FACT deal with - Answer -identify theift
AfBA / ABA - Answer -Affiliated business arrangement
Other names for doc signing - Answer -Settlement, closing, loan settlement
,What percent of a business must you own in order to disclose that info - Answer -1% -
disclose right away
Civil Righs Act Deals with - Answer -Race
Another name for escrow account - Answer -reserve or impound
CFPB - Answer -Consumer Financial Protection Bureau
What is the purpose of CFPB - Answer -promote financial stability
What is a Mortgage - Answer -written instrument using real property to secure
repayment of a debt
Primary market: - Answer -Borrowers & lenders come togther to neogiate terms of a
mortgage
Mortgage Banker - Answer -lend their own money (investor)
Mortgage Broker - Answer -(broke) connects you with company/person to lend you
money
Secondary market: - Answer -Where existing mortgages are bought and sold (Frannie
Mae and Freddie Mac)
FNMA - Frannie Mae - Answer -Federal National Mortgage Association (largest gov
sponsored entity)
FHLMC - Freddie Mac - Answer -Federal home loan mortgage association (second
largest GSE)
GNMA - Ginnie Mae - Answer -Goverment national mortgage association. a hub -
doesnt purchase or sell loans. guarentees loans
RESPA helps consumers.. - Answer -become better shoppers for SETTLEMENT
SERVICES
RESPA covers how many units - Answer -1-4 residential properties (owner occupied)
RESPA Section 6 deals with - Answer -mortgage services
RESPA Section 6 addresses - Answer -services obligated to correct errors / payments
RESPA Section 8 prohibits - Answer -kickbacks, fee-splittingm unearned fees
RESPA Section 9 deals with - Answer -title insurance
,RESPA Section 9 prohibits the seller from - Answer -requiring a particular title
insurance company
If seller requires buyer to use a particular title insuance co, the buyer can - Answer -sue
for 3x the amount of the title insurance cost
RESPA Section 10 deals with - Answer -Escrow accounts (impound/reserve)
RESPA Section 10 allows how much of a cushion - Answer -2 months at closing
What 6 items complete an application? - Answer -Name, SSN, Gross income, loan
amount sought, address of subject property (TBD), estimated prop value
When does the borrower get initial disclosures? - Answer -After you receive full app
UNLESS borrower withdrawls, lender turns down loan before 3 day period
TRID integrates what - Answer -TILA & RESPA
TRID sets requirements of what - Answer -delivery of required documents
According to TRID when must required documents be required - Answer -at/within 3
business days of app, before settlement, at settlement, after settlement
What are the initial disclosures? - Answer -Home loan tool kit (purchase only)
Loan Estimate (LE) - Closing Disclosure (CD)
MSDA (mortgage servicing disclosure statement)
HUD approved home conselors
What fees may be charged before the delivery of the LE - Answer -NONE - except
credit report fee
an LE is good for how many days - Answer -10
Closing Disclosures must contain - Answer -ACTUAL terms/cost
Who is responsible for providing the statement to the borrower - Answer -
Creditor/Lender
Who is responsible for providing the statement to the seller - Answer -Settlement/Title
agent
What are the valid change in circumstances - Answer -change in loan APR
change in loan product
addition of a prepayment penalty
, TRIDs purpose is to - Answer -help buyers understand options, and avoid suprises at
closing
TRID does not apply to - Answer -HELOC - home equity lines of credit
Reverse mortgages
mortgages for mobile homes
loans for anyone who funds more than 5 loans a year
How long must the closing disclosure be kept - Answer -5 years
how long must the loan estimate be kept - Answer -3 years
LE must be provided at least ______ prior to consummation - Answer -3 days
What organization was created by HERA to oversee Fannie Mae and Freddie Mac? -
Answer -FHFA
What law created the need for MLO's to get licensed and regulates who can work in the
industry? - Answer -SAFE
What system was created to be a database for all MLO's? - Answer -NMLS
With Dodd-Frank it also helped create what regulatory authority? - Answer -CFPB
How many hours of pre-licensing education is required? - Answer -20
What is the term for a loan that is insured or guaranteed by the government? - Answer -
Non-conventional
What types of loans would not be eligible for purchase by Fannie Mae of Freddie Mac? -
Answer -Conventional Non-conforming
What type of loan is used for someone to buy a new home? - Answer -Purchase
What type of transaction is used for a client that already owns a home and is only
changing the rate or number of years on their loan? - Answer -Rate and Term
Refinance
What type of funding allows a broker to close a loan in their own name and immediately
upon closing transfer the loan back to the lender that gave them the money? - Answer -
Table funding
What type of transaction could be used for a person looking to consolidate debt or pay
off credit cards? - Answer -Cash out Refinance
ECOA - Reg B - Answer -Equal Credit Opportunity Act
HMDA - Reg C - Answer -Home Mortgage Disclosure Act
RESPA - Reg X - Answer -Real Estate Settlement Procedures Act
TILA - Reg Z - Answer -Truth In Lending Act
HPA - Answer -Home-owner Protection Act
PMI is required when - Answer -Borrower puts less than 20% down
ECOA deals with - Answer -credit applications
HMDA allows to see - Answer -where possible discrimination takes place
Where is HMDA found - Answer -Section 10 of the 1003 loan app
PMI - Answer -Private mortgage insurance
TILA deals with - Answer -advertising of loans, cerdit, APR
PMI protects who - Answer -The Lender
SAFE - Answer -Secure And Fair Enforcement Act
HERA - Answer -Housing and Economic Recovery Act
HERA created what act - Answer -SAFE Act
FCRA - Reg V - Answer -Fair Credit Reporting Act
What does FCRA deal with - Answer -credit report
FACT - Answer -Fair and Accurate Credit Transactions
What does FACT deal with - Answer -identify theift
AfBA / ABA - Answer -Affiliated business arrangement
Other names for doc signing - Answer -Settlement, closing, loan settlement
,What percent of a business must you own in order to disclose that info - Answer -1% -
disclose right away
Civil Righs Act Deals with - Answer -Race
Another name for escrow account - Answer -reserve or impound
CFPB - Answer -Consumer Financial Protection Bureau
What is the purpose of CFPB - Answer -promote financial stability
What is a Mortgage - Answer -written instrument using real property to secure
repayment of a debt
Primary market: - Answer -Borrowers & lenders come togther to neogiate terms of a
mortgage
Mortgage Banker - Answer -lend their own money (investor)
Mortgage Broker - Answer -(broke) connects you with company/person to lend you
money
Secondary market: - Answer -Where existing mortgages are bought and sold (Frannie
Mae and Freddie Mac)
FNMA - Frannie Mae - Answer -Federal National Mortgage Association (largest gov
sponsored entity)
FHLMC - Freddie Mac - Answer -Federal home loan mortgage association (second
largest GSE)
GNMA - Ginnie Mae - Answer -Goverment national mortgage association. a hub -
doesnt purchase or sell loans. guarentees loans
RESPA helps consumers.. - Answer -become better shoppers for SETTLEMENT
SERVICES
RESPA covers how many units - Answer -1-4 residential properties (owner occupied)
RESPA Section 6 deals with - Answer -mortgage services
RESPA Section 6 addresses - Answer -services obligated to correct errors / payments
RESPA Section 8 prohibits - Answer -kickbacks, fee-splittingm unearned fees
RESPA Section 9 deals with - Answer -title insurance
,RESPA Section 9 prohibits the seller from - Answer -requiring a particular title
insurance company
If seller requires buyer to use a particular title insuance co, the buyer can - Answer -sue
for 3x the amount of the title insurance cost
RESPA Section 10 deals with - Answer -Escrow accounts (impound/reserve)
RESPA Section 10 allows how much of a cushion - Answer -2 months at closing
What 6 items complete an application? - Answer -Name, SSN, Gross income, loan
amount sought, address of subject property (TBD), estimated prop value
When does the borrower get initial disclosures? - Answer -After you receive full app
UNLESS borrower withdrawls, lender turns down loan before 3 day period
TRID integrates what - Answer -TILA & RESPA
TRID sets requirements of what - Answer -delivery of required documents
According to TRID when must required documents be required - Answer -at/within 3
business days of app, before settlement, at settlement, after settlement
What are the initial disclosures? - Answer -Home loan tool kit (purchase only)
Loan Estimate (LE) - Closing Disclosure (CD)
MSDA (mortgage servicing disclosure statement)
HUD approved home conselors
What fees may be charged before the delivery of the LE - Answer -NONE - except
credit report fee
an LE is good for how many days - Answer -10
Closing Disclosures must contain - Answer -ACTUAL terms/cost
Who is responsible for providing the statement to the borrower - Answer -
Creditor/Lender
Who is responsible for providing the statement to the seller - Answer -Settlement/Title
agent
What are the valid change in circumstances - Answer -change in loan APR
change in loan product
addition of a prepayment penalty
, TRIDs purpose is to - Answer -help buyers understand options, and avoid suprises at
closing
TRID does not apply to - Answer -HELOC - home equity lines of credit
Reverse mortgages
mortgages for mobile homes
loans for anyone who funds more than 5 loans a year
How long must the closing disclosure be kept - Answer -5 years
how long must the loan estimate be kept - Answer -3 years
LE must be provided at least ______ prior to consummation - Answer -3 days
What organization was created by HERA to oversee Fannie Mae and Freddie Mac? -
Answer -FHFA
What law created the need for MLO's to get licensed and regulates who can work in the
industry? - Answer -SAFE
What system was created to be a database for all MLO's? - Answer -NMLS
With Dodd-Frank it also helped create what regulatory authority? - Answer -CFPB
How many hours of pre-licensing education is required? - Answer -20
What is the term for a loan that is insured or guaranteed by the government? - Answer -
Non-conventional
What types of loans would not be eligible for purchase by Fannie Mae of Freddie Mac? -
Answer -Conventional Non-conforming
What type of loan is used for someone to buy a new home? - Answer -Purchase
What type of transaction is used for a client that already owns a home and is only
changing the rate or number of years on their loan? - Answer -Rate and Term
Refinance
What type of funding allows a broker to close a loan in their own name and immediately
upon closing transfer the loan back to the lender that gave them the money? - Answer -
Table funding
What type of transaction could be used for a person looking to consolidate debt or pay
off credit cards? - Answer -Cash out Refinance
