Module 1 NMLS exam QUESTIONS WITH |\ |\ |\ |\ |\ |\
ANSWERS
What are the penalties for violation of RESPA/Section 8 -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Section 8 of RESPA prohibits referral fees
|\ |\ |\ |\ |\ |\ |\ |\ |\
and other forms of kickbacks/fee splitting. Penalties include fines
|\ |\ |\ |\ |\ |\ |\ |\ |\
of up to 10,000 and up to one year in prison
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Disclosures due within three business days of loan application - |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Loan Estimate |\ |\ |\
Your Home Loan Toolkit: A Step By Step Guide
|\ |\ |\ |\ |\ |\ |\ |\
CHARM Booklet |\
Variable-rate program disclosures |\ |\
Home equity plan disclosures
|\ |\ |\
Notice of Right to Receive an Appraisal Report
|\ |\ |\ |\ |\ |\ |\
What can result in a 1,000,000 fine and 30 years in prison? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Acts of mortgage fraud |\ |\ |\ |\ |\
Definition of the term "creditor" - CORRECT ANSWERS ✔✔The
|\ |\ |\ |\ |\ |\ |\ |\ |\
Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act
|\ |\ |\ |\ |\ |\ |\ |\ |\
(FCRA), and the Fair and Accurate Credit Transactions Act
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
(FACTA) all use the same definition for creditor. A creditor is any
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
person who regulary extends, renews, or continues credit. Loan
|\ |\ |\ |\ |\ |\ |\ |\ |\
originators, lenders, and other mortgage progessionals are |\ |\ |\ |\ |\ |\ |\
included in this definition. |\ |\ |\
,Transactions reported under HMDA.. - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\
✔✔Purchases
Refinances
Home improvement loans |\ |\
Pre-qualifications must also be reported, along with their |\ |\ |\ |\ |\ |\ |\ |\
disposition
When a borrowers LTV reaches 80%... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔He/she is permitted to request discontinuation of PMI. The
|\ |\ |\ |\ |\ |\ |\ |\ |\
Homeowners Protection Act sets the requirements for |\ |\ |\ |\ |\ |\ |\
discontinuation of PMI. It is at the lenders discretion to permit |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
discontinuation - the borrower must be current on payments |\ |\ |\ |\ |\ |\ |\ |\
An initial privacy notice is due.. - CORRECT ANSWERS ✔✔At the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
time that a customer relationship is established. the Gramm-
|\ |\ |\ |\ |\ |\ |\ |\
Leach Bliley Act requires financial institution (including mortgage
|\ |\ |\ |\ |\ |\ |\ |\
brokers) to provide and intial privacy notice " not later than when
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
you establish a customer relationship..." The initial privacy notice
|\ |\ |\ |\ |\ |\ |\ |\ |\
should also be accompanied by the opt-out noitce
|\ |\ |\ |\ |\ |\ |\ |\
HMDA requires loan originators to... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔Request information on and applicants race, ethnicity, and |\ |\ |\ |\ |\ |\ |\ |\
sex. The applicant may decline to answer, in which case the loan
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
originator must make a best guess based on visual observation.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
This information is necessary to meet the reporting requirements
|\ |\ |\ |\ |\ |\ |\ |\ |\
of HMDA |\
A permissible purpose is required... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔When obtaining a credit report. Under FCRA, lenders and
|\ |\ |\ |\ |\ |\ |\ |\ |\
mortgage progessionals must provide the consumer reporting
|\ |\ |\ |\ |\ |\ |\
, agency with a certification of permissible purpose in order to pull
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
credit. Loan qualification is considered a permissible purpose.
|\ |\ |\ |\ |\ |\ |\
The Gramm-Leach Bliley Act does not protect... - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Publicly-available information. This includes
|\ |\ |\ |\ |\
information that can be found in government real estate records,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
information available from the phonebook, and information |\ |\ |\ |\ |\ |\ |\
included on a public unrestricted website.
|\ |\ |\ |\ |\
The loan estimate must be provide... - CORRECT ANSWERS ✔✔No
|\ |\ |\ |\ |\ |\ |\ |\ |\
later than 3 business days after receiving a completed
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
application. |\
No later than 7 business days prior to consummation
|\ |\ |\ |\ |\ |\ |\ |\
The Closing Disclosure must be provided... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔At least three business days prior to consummation
|\ |\ |\ |\ |\ |\ |\
Exemptions under ECOA - CORRECT ANSWERS ✔✔Although ECOA |\ |\ |\ |\ |\ |\ |\
prohibits inquires about protected personal characteristics,
|\ |\ |\ |\ |\ |\ |\
mortgage professional are permitted to ask HMDA questions.
|\ |\ |\ |\ |\ |\ |\ |\
Inquires about protected characteristics may also be used to
|\ |\ |\ |\ |\ |\ |\ |\ |\
determine the eligibility for special-purpose credit, such as
|\ |\ |\ |\ |\ |\ |\ |\
assistance programs through non- profits. |\ |\ |\ |\
The purpose of the Homeowners Protection Act is.. - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔The Homeowners Protection Act was enacted to
|\ |\ |\ |\ |\ |\ |\ |\
facilitate the cancellation of private mortgage insurance (PMI).
|\ |\ |\ |\ |\ |\ |\ |\
Borrowers can request cancellation when their loan reaches 80%
|\ |\ |\ |\ |\ |\ |\ |\ |\
loan-to-value (20% equity), but the law requires automatic |\ |\ |\ |\ |\ |\ |\ |\
discontinuation of PMI at 78% LTV (22% equity) |\ |\ |\ |\ |\ |\ |\
ANSWERS
What are the penalties for violation of RESPA/Section 8 -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Section 8 of RESPA prohibits referral fees
|\ |\ |\ |\ |\ |\ |\ |\ |\
and other forms of kickbacks/fee splitting. Penalties include fines
|\ |\ |\ |\ |\ |\ |\ |\ |\
of up to 10,000 and up to one year in prison
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Disclosures due within three business days of loan application - |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Loan Estimate |\ |\ |\
Your Home Loan Toolkit: A Step By Step Guide
|\ |\ |\ |\ |\ |\ |\ |\
CHARM Booklet |\
Variable-rate program disclosures |\ |\
Home equity plan disclosures
|\ |\ |\
Notice of Right to Receive an Appraisal Report
|\ |\ |\ |\ |\ |\ |\
What can result in a 1,000,000 fine and 30 years in prison? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Acts of mortgage fraud |\ |\ |\ |\ |\
Definition of the term "creditor" - CORRECT ANSWERS ✔✔The
|\ |\ |\ |\ |\ |\ |\ |\ |\
Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act
|\ |\ |\ |\ |\ |\ |\ |\ |\
(FCRA), and the Fair and Accurate Credit Transactions Act
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
(FACTA) all use the same definition for creditor. A creditor is any
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
person who regulary extends, renews, or continues credit. Loan
|\ |\ |\ |\ |\ |\ |\ |\ |\
originators, lenders, and other mortgage progessionals are |\ |\ |\ |\ |\ |\ |\
included in this definition. |\ |\ |\
,Transactions reported under HMDA.. - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\
✔✔Purchases
Refinances
Home improvement loans |\ |\
Pre-qualifications must also be reported, along with their |\ |\ |\ |\ |\ |\ |\ |\
disposition
When a borrowers LTV reaches 80%... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔He/she is permitted to request discontinuation of PMI. The
|\ |\ |\ |\ |\ |\ |\ |\ |\
Homeowners Protection Act sets the requirements for |\ |\ |\ |\ |\ |\ |\
discontinuation of PMI. It is at the lenders discretion to permit |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
discontinuation - the borrower must be current on payments |\ |\ |\ |\ |\ |\ |\ |\
An initial privacy notice is due.. - CORRECT ANSWERS ✔✔At the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
time that a customer relationship is established. the Gramm-
|\ |\ |\ |\ |\ |\ |\ |\
Leach Bliley Act requires financial institution (including mortgage
|\ |\ |\ |\ |\ |\ |\ |\
brokers) to provide and intial privacy notice " not later than when
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
you establish a customer relationship..." The initial privacy notice
|\ |\ |\ |\ |\ |\ |\ |\ |\
should also be accompanied by the opt-out noitce
|\ |\ |\ |\ |\ |\ |\ |\
HMDA requires loan originators to... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔Request information on and applicants race, ethnicity, and |\ |\ |\ |\ |\ |\ |\ |\
sex. The applicant may decline to answer, in which case the loan
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
originator must make a best guess based on visual observation.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
This information is necessary to meet the reporting requirements
|\ |\ |\ |\ |\ |\ |\ |\ |\
of HMDA |\
A permissible purpose is required... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔When obtaining a credit report. Under FCRA, lenders and
|\ |\ |\ |\ |\ |\ |\ |\ |\
mortgage progessionals must provide the consumer reporting
|\ |\ |\ |\ |\ |\ |\
, agency with a certification of permissible purpose in order to pull
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
credit. Loan qualification is considered a permissible purpose.
|\ |\ |\ |\ |\ |\ |\
The Gramm-Leach Bliley Act does not protect... - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Publicly-available information. This includes
|\ |\ |\ |\ |\
information that can be found in government real estate records,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
information available from the phonebook, and information |\ |\ |\ |\ |\ |\ |\
included on a public unrestricted website.
|\ |\ |\ |\ |\
The loan estimate must be provide... - CORRECT ANSWERS ✔✔No
|\ |\ |\ |\ |\ |\ |\ |\ |\
later than 3 business days after receiving a completed
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
application. |\
No later than 7 business days prior to consummation
|\ |\ |\ |\ |\ |\ |\ |\
The Closing Disclosure must be provided... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔At least three business days prior to consummation
|\ |\ |\ |\ |\ |\ |\
Exemptions under ECOA - CORRECT ANSWERS ✔✔Although ECOA |\ |\ |\ |\ |\ |\ |\
prohibits inquires about protected personal characteristics,
|\ |\ |\ |\ |\ |\ |\
mortgage professional are permitted to ask HMDA questions.
|\ |\ |\ |\ |\ |\ |\ |\
Inquires about protected characteristics may also be used to
|\ |\ |\ |\ |\ |\ |\ |\ |\
determine the eligibility for special-purpose credit, such as
|\ |\ |\ |\ |\ |\ |\ |\
assistance programs through non- profits. |\ |\ |\ |\
The purpose of the Homeowners Protection Act is.. - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔The Homeowners Protection Act was enacted to
|\ |\ |\ |\ |\ |\ |\ |\
facilitate the cancellation of private mortgage insurance (PMI).
|\ |\ |\ |\ |\ |\ |\ |\
Borrowers can request cancellation when their loan reaches 80%
|\ |\ |\ |\ |\ |\ |\ |\ |\
loan-to-value (20% equity), but the law requires automatic |\ |\ |\ |\ |\ |\ |\ |\
discontinuation of PMI at 78% LTV (22% equity) |\ |\ |\ |\ |\ |\ |\
