NMLS SAFE EXAM 2022 Questions with accurate answers, Graded A latest update 2023

NMLS SAFE EXAM 2022 Questions with accurate answers, Graded A latest update 2023 Document Content and Description Below NMLS SAFE EXAM 2022 Questions with accurate answers, Graded A latest update 2023 What does TILA stand for? - ☑☑Truth-In-Lending Act, Regulation Z What is a HELOC loan? - ☑☑a secured loan in that you are borrowing against the equity that has been built in your house What is a REFI loan? - ☑☑ LTV stands for - ☑☑Loan to Value Define PMI and state what the acronym stands for. - ☑☑Private mortgage insurance- on conventional loans Define one time variable funding fee and people in what situations is it waived for? - ☑☑Disabled veterans and surviving spouses. USDA loans are also called what? - ☑☑502 loans Define MIP - ☑☑Can be paid up front or in installments. Mortgage insurance premium used by FHA to protect themselves against higher-risk borrowers who are more likely to default on loans Define APR - ☑☑annual percentage rate Define APOR - ☑☑average prime offer rate Define HPML - ☑☑High price mortgage loans or Section 35 loans. A mortgage with an annual percentage rate (APR) that's higher than the average prime offer rate (APOR) When is a loan considered to be a section 35 loan? (High price mortgage loan) - ☑☑- When the APR exceeds APOR by 1.5% on a first lien, 2.5% on Jumbo first lien or 3.5% on subordinate lien What requirements are placed on section 35 loans? (High price mortgage loans) - ☑☑APE A- ATR / ability to repay P- no PREPAYMENT penalty unless in the first 2 years E- requires ESCROW of the taxes and hazard insurance for the first 5 years Define ATR - ☑☑Ability to repay 8 Factors of ATR - ☑☑MICE DOES M- Monthly mortgage I- Income + assets C- Credit history E- Employment D- Debt to Income Ratio O- Other debts E- Expenses S- Simultaneous mortgage What are section 32 loans? - ☑☑High cost mortgage loans. Considered to be HCML when APR exceeds APOR by 6.5% on first lien on loan $50,000 or higher, or 8.5% on first lien on a loan that's less than $50,000 or 8.5% on subordinate lien. What requirements are placed on Section 32 loans / HCML / High cost mortgage loans? - ☑☑BAPS B- no BALLOON payment A- must have ATR P- no PREPAYMENT PENALTY S- must SPEAK to a HUD counselor What makes a complete application? - ☑☑ALIENS A- Address L- Loan amount I- Income E- Estimated value N- Name S- Social security number What is a 1003 and a 1004 form? - ☑☑URLA - Uniform Residential Loan Application and URAR - Uniform Residential Appraisal Report What is a 1005 and 1006 form? - ☑☑VOE - Verification of employment and VOD - Verification of deposits (bank balance) What is a 1008 form? - ☑☑Transmittal summary. Top sheet! SUMMARY What are the protected classes under ECOA AND Fair Housing Act? - ☑☑- Sex - Color - National origin - Race Religion What are the protected classes that are under ECOA but NOT Fair Housing Act? - ☑☑- Maritial status - Age - Public assistance What are the protected classes that are under Fair Housing Act but NOT ECOA? - ☑☑- Familial status - Disability What things are NOT included in the APR? - ☑☑- Title insurance - Escrow - Notary fee - Appraisal - Credit report fee - Termite inspection fee - Seller credits What makes a mortgage a qualified mortgage? (Rules of 3s) - ☑☑- The point and fees of the mortgage cannot exceed 3% - The back end ratio cannot exceed 43% - The prepayment penalty is limited to the first 3 year - No terms over 30 years allowed - No toxic features: no balloon payments, no interest only terms, no negative amortization - Qualified mortgages has ATR What documents must you keep for 5 years? - ☑☑Suspicious Activity Report (SAR) and Closing disclosure (CD) What documents must you keep for 3 years? - ☑☑- Loan Application Register (LAR) - Loan Estimate (LE) - Line of Credit (LOC) What documents must you keep for 2 years? - ☑☑everything thats not 5 or 3 What documents must you keep for 25 months? - ☑☑ECOA Where can you find the NMLS # - ☑☑PLAMT - Promissory note - 1003 URLA (Loan application -Advertisements - Mortgages - Trust deeds What are the flood zones? - ☑☑High risk: A and V Moderate risk: B and X Low risk: C and X RESPA Disclosures include the following: - ☑☑KAMILAS - Know before you owe handbook - Affiliated business arrangement handbook - Mortgage servicing disclosure statements - Initial escrow - List of HUD approved counselors - Anual escrow - Servicing transfer disclosure -(GFE and HUD used for non purchases) What is the penalty for violating GLB? - ☑☑Up to 5 years and a fine What is the penalty for violating RESPA? - ☑☑up to $10,000 and/or 1 year What is the penalty for sending an unauthorized fax? - ☑☑$500 What is the penalty for violating ECOA? - ☑☑Up to $10,000 What is the penalty for violating TILA? - ☑☑$5K for single violation $25k for reckless violation $1M per day of knowingly committing a violation What is the penalty for violating SAFE Act? - ☑☑Up to $30,058 What is the penalty for violating DNC? (Do not call list? - ☑☑up to $43,280 What is the penalty for violating HMDA? - ☑☑Based on the penalty matrix What is the penalty for violating FACTA? - ☑☑$5K and/or 1 year What are the TILA disclosures? - ☑☑A BRAWL on closed caption TV B- Balloon notice R- Right to rescind A- ARM disclosure W- When you're home is on the line disclosure L- Loan estimate C- Charm booklet C- Closing disclore T- Transfer or mortgage What things have a 0% tolerance. - ☑☑TRAIL T- Transfer taxes R- Credit Report A- Appraisal I- Interest rate L- Loan origination What things have a 10% tolerance? - ☑☑- Government reporting fee - Title insurance or any service chosen by the borrower from the lenders recommended list What things have no tolerance requirements? - ☑☑TIP - Termite inspection - Insurance hazard and title - Prepaid interest Finance charges do not include.... - ☑☑PANS BC - Points paid by the seller - Appraisal fee - Notary fee - Security interest charges, if itemized and disclosed - Bona fide and reasonable fees - Credit report fee Which regulation is TILA? - ☑☑Regulation Z How long after a completed loan application must a LE be submitted? - ☑☑3 days. If there are any changes made to the information, you have 3 days to resend updated loan estimate What is the absolute only thing a borrower can be charged for before receiving their loan estimate? - ☑☑Credit report There is a ____ day waiting period between receiving the loan estimate and consummation of the loan. - ☑☑7 day. (Can be waived by borrower in cases of bona fide personal financial emergency which requires the transaction to close quickly; ex. foreclosure) the following fees may not vary at all from the amount set forth in the Loan Estimate (i.e., there is zero tolerance) - ☑☑- Fees paid to the creditor, mortgage broker, or an affiliate of either - Fees paid for third-party provider services for which the consumer was NOT allowed to choose the provider - Transfer taxes A Loan Estimate is good for how many days? - ☑☑10 The three circumstances under which a revised Closing Disclosure must be issued and the waiting period restarted are as follows: - ☑☑- The loan's disclosed APR becomes inaccurate - Changes in the terms of the loan product offered - Addition of a prepayment penalty A Closing Disclosure must be provided no less than ____ business days prior to consummation. - ☑☑3 ECOA Valuations rule: - ☑☑Lenders have 3 days from application to notify a borrower of their right to a copy of their appraisal and lenders must provide promptly upon completion or at least 3 days prior to close whichever is earlier. Borrowers can waive the timing requirement and accept the appraisal at closing. (If the loan does not close, and they signed a waiver you have 30 days to provide the applicant with a copy.) What HMDA mean? - ☑☑The Home Mortgage Disclosure Act (Regulation C) - requires lenders to report data regarding its mortgage lending activity Dwellings subject to HMDA reporting requirements include: - ☑☑VIRM - Vacation or second homes. - Individual condominiums or cooperative units - Rental properties - Manufactured homes and mobile homes Define FCRA - ☑☑The Fair Credit Reporting Act (Regulatio