SAFE Mortgage Comprehensive Online Exam with Questions and Verified Answers 2023, Exams of Business Accounting

Download SAFE Mortgage Comprehensive Online Exam with Questions and Verified Answers 2023 and more Exams Business Accounting in PDF only on Docsity! SAFE Mortgage Comprehensive Online Exam with Questions and Verified Answers 2023. Ethics Fraud for housing or fraud for property is one of the two major divisions of fraud in the mortgage industry. What is the other? Fraud by mortgage brokers Fraud for greed Fraud for profit Correct Answer Fraud for lenders Answered correctly Fraud for profit is fraud committed by mortgage professionals. MLO Mortgage Knowledge Which of the following is NOT an acceptable form of funds a buyer can present at settlement? Cash Correct Answer Certified bank check Wired funds credited to the closing attorney’s escrow account Bank cashier’s check Answered correctly Ethics What is the Safeguards Rule? www.ameritrain.com Question #138 Question #237 Question #178 A rule that protects the contractual details between a broker and his employees A rule issued by HUD to protect consumers from excessive fees A rule for depository financial institutions to protect the transfer of electronic A rule issued by the FTC that requires companies to have measures to keep customer information safe Correct Answer Answered correctly The Safeguard Rule is issued by the FTC to implement the provisions of GLBA Ethics Which of the following would be considered misrepresentation of assets? Failing to disclose a second job Undisclosed second mortgage Correct Answer Forged pay stubs Misrepresented intent to occupy Answered correctly All answers are violations, however, an undisclosed second mortgage is over stating the equity in the property and equity is an asset General Mortgage Knowledge Question #142 The process where the lender holds legal title and the borrower holds equitable title is: Question #173 Binder theory Lien theory Deed theory Title theory Correct Answer Answered correctly There are two ways of perfecting title in the US. Title theory where the lender has legal title until the loan is paid and the borrower holds equitable title or possession rights. The other method is Lien theory where the borrower has both legal and equitable title and the lender is secured by a voluntary lien General Mortgage Knowledge The minimum down payment requirement for a VA purchase for a qualified applicant is: 10% 5% Zero Correct Answer 3.5% Answered correctly VA will guarantee 100 percent financed loans. Federal Law The Truth-In-lending Act provides a right to rescind. Which statement would NOT reflect the law? Consumers have until midnight of the third business day to rescind The choice to rescind requires the signatures of all parties on the security instrument Correct Answer Failure to provide the correct disclosures could result in a 3 year right to rescind The settlement agent must fully disclose the right to rescind Answered correctly Although all parties on the security instrument must sign the right to rescind form only one person can choose to cancel. The settlement agent must fully disclose the right to rescind Failure to provide the correct disclosures could result in a 3 year right to rescind General Mortgage Knowledge A HELOC would generally be categorized as: Question #210 Question #135 Question #165 A closed end loan A fixed rate loan A fixed term loan An open end loan Correct Answer Answered correctly There are closed end HELOC loans, however, a HELOC is generally considered an open end loan with the ability to pay down the debt and reuse the credit line without refinancing Federal Law Which of the following statements is incorrect relating to High Cost loans? www.ameritrain.com Question #181 A high cost loan is subject to the provisions of TILA section 1026.32, known as section 32. A high cost loan is determined by exceeding HOEPA thresholds A high cost loan is exempt from the APR threshold Correct Answer UST To meet the S.A.F.E. Act requirements that a state must maintain a supervisory authority over the loan originations operating in the state. This entity has the following authority Except: www.ameritrain.com Question #U038 Examine the books records and papers of a MLO Summon any person in possession of the books and or records Summon a loan originator to appear before the authority and give testimony under oath Arrest a MLO for violations of the S.A.F.E Act Correct Answer Answered correctly 1008.111(a)(b) General Mortgage Knowledge Which two items does a lender add together to establish the fully indexed interest rate for an adjustable rate mortgage (ARM)? Index and margin Correct Answer Interest rate and margin Margin and fully index accrual rate Index and annual cap Answered correctly The index changes based on market conditions and the margin is the lenders profit and remains fixed during the life of the loan MLO Mortgage Knowledge If funds are sent to a settlement agent prior to the borrower signing all closing documents, this is an example of: www.ameritrain.com Question #184 Question #110 Cash disbursement Escrow settlement Dry settlement Wet settlement Correct Answer Answered correctly In a dry settlement state the funds are sent after all funding conditions have been cleared General Mortgage Knowledge The three entities that dominate the residential real estate secondary market are: Fannie Mae, Freddie Mac & Ginnie Mae Correct Answer FHA, Fannie Mae & Ginnie Mae Freddie Mac, Fannie Mae & HUD Commercial Banks, S&L, & Freddie Mac Answered correctly Fannie Mae has the largest portfolio of loans on the secondary market Federal Law The following is NOT correct relating to current Home Mortgage Disclosure Act reporting thresholds: A non-depository institution that only originates investor loans is required to report to HMDA Correct Answer Question #169 Question #286 The reporting exemption threshold for depository institutions is $43 million A mortgage broker is required to include both purchase and refinance transactions in the threshold calculation 100 qualifying loans originated by a non depository institution within the preceding calandar year Answered wrong A non-depository institution must report HMDA information if the institution closes over 100 home purchase loans and or has more than 10 million in assets when including the parent company. UST According to the Model State Law at the state level who has the authority to ensure that individuals are licensed and registered through the NMLSR? www.ameritrain.com Question #U067 Individuals under the self policing requirements The Commissioner Correct Answer CFPB NMLSR Answered correctly The state model law template designed to assist states to adapt their laws to meet the terms of the SAFE Act refers to the head of the regulatory authority in the state as the commissioner. Not all states refer to the head of their regulatory authority as the commissioner. Federal Law As a general rule, the APR is considered accurate if the variance is not more than % above or below the APR previously disclosed: www.ameritrain.com Question #196 1/8th percent for both a regular and irregular loan 1/4 percent for both a regular and irregular loan 1/8th of 1 percent for a regular loan Correct Answer 1/4 or 1 percent for a regular loan Answered correctly The APR is considered inaccurate if it is more than 1/8th of 1 percent above or below for a regular loan MLO Mortgage Knowledge An applicant is retiring to South Carolina from New Jersey after working for 30 years. She is purchasing a home, but has not yet sold her house back home in New Jersey. Her house is currently under contract with a prospective buyer. Once her home sells, the applicant will have enough equity from the sale for her down payment. How should the loan officer list the funds she intends to use for down payment on the loan application? Equity from pending sale Correct Answer Bridge loan Equity from sold property Equity from subject property Answered correctly The sale is still pending until it closes. General Mortgage Knowledge Which fee is charged to payoff an existing loan at settlement? Assumption fee Documentation preparation fee Wire transfer fee Correct Answer Tax related service fee Question #224 Question #216 Answered wrong UST John is currently licensed in a state that will participate in the UST program. He became licensed before the UST program began and has never taken another test. The following statement is correct relating to his options: Question #2876 John will need to take the new 125 national exam to maintain his status in his current state If John wants to originate in another state that is part of the UST he will need to take the entire 125 question test Correct Answer Since John is licensed in one UST state he automatically meets the testing requirements for all UST states John can take the the UST standalone test anytime in the future Answered correctly Current licensed MLOs who did enroll for the standalone test by March 31, 2014 will need to take the 125 question national exam with the UST component included. UST Who is responsible for the creation and maintenance of the NMLSR? www.ameritrain.com Question #U008 HUD, Bureau State Regulatory Agencies CSBS, AARMR Correct Answer Bureau Answered correctly 1008.23 The Conference of State Bank Supervisors and the Association of Residential Mortgage Regulators are organizations recruited to create and maintain the NMLS&R General Mortgage Knowledge The following is not one of the three major credit bureaus: Experian Equifax Trans Union Transperian Correct Answer Answered correctly The three major credit bureaus are Trans Union, Equifax and Experian UST Part of the application process for a MLO license is a criminal history check done through a finger print check. The following statement is not correct: Fingerprints are processed through the FBI Fingerprints are submitted to the state regulatory division over mortgage licensing Correct Answer Fingerprints are paid for through the NMLS The fingerprint requirement is not waived even if the applicant has a fingerprint record within 2 years that was processed through the FBI Answered wrong 1008.105(g) MLO Mortgage Knowledge If the fully indexed rate is 5.375 percent and the margin is 2.5 percent, what is the index? Question #171 Question #2884 Question #252 Ethics Which of the following could indicate possible fraud? Large employer, but the check stubs are not pre printed Correct Answer No credit history on the credit report Years of schooling consistent with profession Comparable properties are significant distance from the subject property Answered correctly An indication of fraud would be anything that is inconsistent with the norm. The action or activity requires additional due diligence. General Mortgage Knowledge Private mortgage insurance automatically terminates,under what circumstances? Equity in property reaches 12 percent Equity in the property reaches 22 percent Correct Answer Equity in property reaches 20 percent Equity in property reaches 15 percent Answered correctly The lender is required to automatically terminate PMI when the LTV based on the original value reaches 78% or a 22% equity position UST Under SAFE Act definitions, which of the following would be a non- traditional mortgage product: A 15 year fixed rate mortgage Correct Answer A 30 year refinance on a primary residence where the P&I never change A 30 year fixed rate mortgage with a par interest rate A 30 year fixed rate mortgage Answered correctly SAFE Act defines non traditional any product other than a 30 year fixed rate mortgage UST Which of the following would not be considered as compensation or gain under the S.A.F.E. Act definitions? Question #155 Question #185 Question #189 Question #2883 Individual receives a salary for origination activities An individual receives a salary associated with efforts at origination even though no loan has closed An individual receives a bonus when a loan closes that the individual originated Individual acts as a volunteer without receiving or expecting to receive anything of value in connection with the individual's activities. Correct Answer Answered correctly UST A mortgage loan processor has just finished a conversation with a borrower who has already completed the loan application. Which of the following voids her exemption from registration and or licensing? Question #2894 Requests an email address from the borrower Discusses with the borrower that they need additional employment information Explains to the borrower that a tax return is needed to validate income Discusses with the borrower the benefits of locking in a rate Correct Answer Answered correctly A processor is not allowed to discuss rates and terms in anyway. Encouraging a borrower to lock a rate is discussing rates and terms and would require the processor to be registered and or licensed as a MLO UST The following would not be a purpose of the S.A.F.E. Act relating to States participation: www.ameritrain.com Question #2879 Adopt minimum uniform standards for the licensing and registration of residential and commercial mortgage loan originators Correct Answer Adopt minimum uniform standards for the licensing and registration of residential mortgage loan originators Ensure that anyone originating loans in the state is registered with the NMLSR Participate in a nationwide mortgage licensing system and registry database of residential mortgage loan originators Answered correctly 1008.1(b) The S.A.F.E. Act is designed for the residential mortgage industry Ethics Churning means: A fraudulent promise to show investors how to get rich Excessive selling/lending activity for the purpose of generating fees and commissions Correct Answer Purchasing a property without any intent to occupy it Multiple loan applications are submitted to different lenders without disclosing intent to purchase other properties Answered correctly Churning would be considered predatory lending. Federal Law The booklet entitled Consumer Handbook on Adjustable Rate Mortgages(CHARM) must be: www.ameritrain.com Question #157 Question #194 Provided at the time of application or within 3 business days of receiving the application when there is an adjustable rate loan Correct Answer Provided before consummation on residential mortgage transaction with a fixed rate Provided before consummation on all residential mortgage transactions Must be provided in lieu of the adjustable rate program disclosure on a residential mortgage transaction where the adjustable rate may increase Answered correctly This is a conditional disclosure. Only required if there is an ARM loan. Federal Law Which of the following statements is correct relating to HMDA? HMDA reports information on the applicants race, ethnicity, sex and income Correct Answer HMDA reports on the age of the applicant HMDA reports include the credit score HMDA reports on the employment history of the applicant Answered correctly MLO Mortgage Knowledge A borrower has 401k retirement of $27,941. How does a loan officer disclose the value of the assets on the 1003? ($27,941* 70%) = $19,558 ($27,941* 50%) = $13,970 ($27,941 * 25%) = $6,985 Question #289 Question #221 ($27,941* 60%) = $16,764 Correct Answer Answered correctly Only 60 percent of vested interest in a retirement account may be used as reserves for residential mortgage financing. UST The SAFE Act minimum pre-license education requirement includes the following, EXCEPT: Question #131 20 hours of education including 2 hours of ethics, 3 hours of federal law and 2 hours or training in non traditional mortgage products. Correct Answer Complete 20 hours of approved NMLS education courses by an approved NMLS education provider. Complete 3 hours of federal law and regulations, 3 hours of ethics (including fraud, consumer protection and fair lending) and 2 hours of nontraditional lending. 8 hours of core required education. Answered wrong The SAFE Act requires 20 hours of pre-license education including 3 hours of federal law, 3 hours of ethics and 2 hours of non traditional product training. MLO Mortgage Knowledge What is the item that protects the homeowner against damage claims from acts in the past? www.ameritrain.com Question #218 Owner’s title insurance policy Correct Answer Hazard insurance premium Mortgage insurance application Mortgage insurance premium Answered correctly Title insurance is different from most insurance which protects against future events. Title insurance protects against past events. General Mortgage Knowledge What is the fee a borrower pays for receiving a reduced interest rate? Underwriting fee Processing fee Yield spread premium Discount fee Correct Answer Answered correctly A discount fee allows the borrower to get a reduced interest rate Federal Law According to TILA and TRID the following change would make the previously disclosed APR inaccurate for a fixed rate loan: www.ameritrain.com Question #150 Question #410 1/8th above or below 1/8th above .250 below Correct Answer .125% above Answered correctly TRIS and TILA considers a tolerance violation when the APR increases or decreases by more than 1/8th or.125 of 1 percent of a regular loan of the previously disclosed APR Federal Law Publically adjudicated disciplinary actions Unique Identifier Number Home Address Correct Answer Employment information Answered correctly 1008.3(2)(d) Employment information, enforcement actions and the unique ID number are available to the public. Non public information like ss#, address and account numbers are not available to the public General Mortgage Knowledge After a loan closes, an entity will collect a borrower’s monthly payments and report the payment history to the credit bureaus. This process is: Question #161 Servicing Correct Answer Originating Underwriting Processing Answered correctly Servicing includes the process of collecting loan payments, making escrow payment disbursement to the taxing authorities and insurance entities and reporting to the credit bureaus. Lenders that transfer their servicing to another entity receive a premium to do so called Service Release Premium (SRP) MLO Mortgage Knowledge Which of the following documents itemizes the actual charges a buyer and seller pays at settlement? www.ameritrain.com Question #112 Escrow statement Truth-in-lending Good faith estimate Closing Disclosure Correct Answer Answered wrong The Closing Disclosure contains actual fees and the Loan Estiamte contains estimated fees Federal Law The TILA/RESPA rule mandates that borrowers receive a copy of the Closing Disclosure: Question #241 4 hours prior to settlement 24 hours prior to settlement 48 hours prior to settlement 3 business days prior to consummation Correct Answer Answered correctly The closing disclosure must be provided to the borrower at least 3 business days before consummation. The revised loan estimate must be delivered at least 4 business days before consummation because the loan estimate may not be delivered after the closing disclosure is delivered and the closing disclosure and the loan estimate may not be delivered on the same day. General Mortgage Knowledge The national representative credit score range is: 300-850 Correct Answer 400–750 350-800 Question #172 375–775 Answered correctly Different bureaus have different credit scoring ranges. The generally accepted national range is 300-850. Federal Law The loan application under TRID is considered to have been received when the pieces of information have been received: www.ameritrain.com Question #272 8 7 5 6 Correct Answer Answered correctly MLO Mortgage Knowledge Which document establishes property measurements and boundaries of real property? Property inspection Survey Correct Answer Appraisal Property scanner Answered correctly UST A state recovery fund is an option that a state can choose instead of having a surety bond or minimum net worth requirement. Which statement is correct relating to a state recovery fund program: Question #245 Question #2892 A state fund relieves MLOs from any liability for their actions A state fund provides the same protections as a surety bond Correct Answer State fund is managed by a surety company State fund is based on a public vote Answered correctly There are three options for protecting consumers against harm caused by the mortgage industry. Surety bond, net worth and state recovery fund. They all provide protections to the consumer. Federal Law The Home Mortgage Disclosure Act (HMDA) is implemented by: www.ameritrain.com Question #287 The Consumer Financial Protection Bureau Correct Answer The Civil Rights Commission The Department of Housing and Urban Development The Department of Justice Answered correctly HMDA is regulation C Federal Law Under Section 8 RESPA, a payment is considered: Only Cash or check Question #198 Equal to receiving or giving any thing of value Correct Answer Money given or received by the referring party to a transaction under a federally related mortgage loan A bona fide fee which is comprised of cash or a liquid cash equivalent Answered correctly Does nor require the transfer of money to be considered anything of value Federal Law Which of the following transactions is NOT covered by HMDA? A home improvement loan A single family home purchase A refinance transaction A pre-qualification on a primary residence purchase Correct Answer Answered correctly Only completed applications and pre-approvals where income and assets have been verified are reported to HMDA MLO Mortgage Knowledge What is the process when a third-party originator closes a loan in their own name with funds from others and shortly after assigns the loan? Question #288 Question #236 Table funding Correct Answer Wet settlement Dual processing Dry settlement Answered correctly Table funding means using the funding lenders funds to close a loan in another entity name and then that entity transfers the loan to the funding lender. This is done by either a mortgage broker and a lender or a correspondent lender and the funding lender. It is administrative and not a secondary transaction MLO Mortgage Knowledge A borrower is applying for a loan on a single family residence. His income is $21.50 per hour, he works 40 hours a week and he is paid on a semi- monthly basis. The loan originator has calculated the principal and interest housing payment at $755 per month and the monthly escrow payment is $135. The current monthly debts are: a car payment for $289, a credit card for $49, a cell phone bill for $63 and utilities of $102. What is his total debt- to-income (DTI) ratio? www.ameritrain.com Question #251 23.87% 37.38% 34.6% 32.95% Correct Answer Answered correctly To calculate gross monthly income, multiply the hourly rate times the hours worked within a week, times 52 weeks, divided by 12. = $3726.67. The housing payment is the principal and interest plus the monthly escrow. = $890. For the other monthly debts, exclude the cell phone and utilities. The total debts are the housing payment plus the credit card and auto payment = 1228. The debt-to-income ratio equals the total debts,$1,228 divided by the gross monthly income, $3,726.67 = 32.95% MLO Mortgage Knowledge What term describes the process of protecting an applicant's locked interest rate before it expires? Lock Extension Correct Answer Buy down Float Question #228 3 yrs Correct Answer 2 yrs 5 yrs Answered correctly An FHA borrower may receive a refund of the upfront mortgage insurance premium(MIP)when refinancing to a new FHA loan or selling the property within the 3 year period. There is no refund of the VA funding fee. MLO Mortgage Knowledge Which document legally conveys real property in written form from a seller to a buyer? www.ameritrain.com Question #117 Quitclaim deed Trust deed Mortgage note Warranty deed Correct Answer Answered correctly MLO Mortgage Knowledge This fee is charged to protect the lender and the purchaser from claims that predate the closing of the loan: Mortgage broker fee Recording fee Title insurance Correct Answer Processing fee Answered correctly Title insurance is mandatory for the lender, paid by the borrower. It is optional for the borrower. General Mortgage Knowledge Finance charges include all of the following except: Question #213 Question #158 Application fees charged to all applicants Correct Answer Loan origination fee Underwriting fee Mortgage insurance premiums Answered correctly A finance charge is a charge that exist only for the extension of credit. A charge that all applicants pay even if credit is not extended is not a finance charge UST The primary purposes of the S.A.F.E. Act is to: Track the origination activities of mortgage loan originators Secure the financing appropriate for a qualified consumer Create a registry for the commercial mortgage industry Enhance consumer protections and reduce fraud Correct Answer Answered wrong 1008.1(a) MLO Mortgage Knowledge A property is valued at $250,000. There is a first mortgage and a second mortgage with a 80% CLTV. The second mortgage is 10% of the property value. What is the amount of the FIRST mortgage? Question #2885 Question #191 $175,000 Correct Answer $20,000 $225,000 $200,000 Answered correctly CLTV = Value X 80% = 200,000 second mortgage = value X 10% = $25,000 First mortgage = 200,000 - $25,000 = $175,000 Federal Law A servicer that transfers a loan must notify the borrower: Within 15 days after the transfer Within 15 days prior to the transfer Correct Answer Within 60 days after the transfer Within 30 days after the transfer Answered correctly MLO Mortgage Knowledge Which document gives an individual the right to represent the physical, legal and financial interest on behalf of a buyer for a real estate settlement transaction? www.ameritrain.com Question #192 Question #238 Limited power of attorney Specific power of attorney Correct Answer General power of attorney Transactional power of attorney Answered correctly Specific power of attorney for the transaction is required in a real estate settlement transaction. In most other representations a general power of attorney is adequate General Mortgage Knowledge Identify the entity that insures loans: www.ameritrain.com Question #168 Secondary Market Fannie Mae Freddie Mac Federal Housing Administration Correct Answer Answered correctly FHA insures loans against a borrowers default. The lenders will receive 100% of their loss. FHA collects an up front mortgage insurance premium UFMIP and an annual mortgage insurance premium UST Title V of HERA and Regulation H are known as all of the following Except Secure and Fair Enforcement for Mortgage Licensing Act S.A.F.E. Act The Act Safe and Fair Enforcement for Mortgage Licensing Act Correct Answer Answered correctly Question #2896 Ethics Illegal property flipping is: A property is refinanced or resold immediately after purchase for an artificially inflated price Correct Answer Purchasing a property in need or repair or upgrades completing the work and in a very short time selling the property for a profit. Buying a property and selling the same property within the same year Moving a mobile home from one slab to another without the owners knowledge Answered correctly Flipping is not illegal when the increase in pricing is based on repairs, upgrades and a legitimate appraisal Federal Law FCRA was created to provide consumer protections, the following is not correct: Question #145 Question #195 FCRA provides regulations for consumer reporting agencies FCRA requires an adverse summary for a credit denial FCRA was extended permanently in 2003 Collections remain on the credit report for 10 yrs Correct Answer Answered correctly Answer: Collections remain on the credit report for 10 yrs. Actually, collections remain on the credit report for 7 years and bankruptcies remain on the report for 10 years UST The S.A.F.E. Act is a part of what Federal Law? The Housing and Economic Recovery Act Correct Answer The Federal Housing Act Federal Housing Administration The Fair Housing Act Answered correctly The Housing and Economic Recovery Act,HERA and became also Regulation H under Banks and banking under CFPB. UST A MLO has just submitted his application for MLO, which of the following would result in the state denying the license under the terms of the S.A.F.E. Act? Received a felony conviction in Mississippi in 2008 for a DUI crime that is a misdemeanor in his current state Oregon Correct Answer Received a felony conviction in California 2007 which was struck down by an appeals court in 2011 Paid a speeding ticket on January 10, 2013 Received a felony conviction in 2007 which was expunged from the records in 2010 after a successful probation period Answered correctly 1008.105(b)(2)(ii) Ethics What federal agency is charged with the responsibility of protecting consumers from deceptive and unfair practices? Consumer Financial Protection Bureau Correct Answer The Federal Communications Commission The Federal Reserve Bank The Federal Consumer Protecting Agency Answered correctly Previously Federal Trade Commission which still has some enforcement authority Question #2874 Question #2895 Question #199 If the NMLS computer system failed Answered correctly 1008.1(b) The Bureau/CFPB is responsible for the implementation of the S.A.F.E Act Federal Law Which of following statements is true about a shortage in a borrower’s escrow account greater than one month in escrow? www.ameritrain.com Question #206 The servicer is required by statute to collect the shortage and balance the account The servicer may allow the borrower to pay the shortage in equal payments over the next 12 months Correct Answer The servicer can require the borrower to pay the amount within 30 days The shortage must be paid within the next payment cycle after notification Answered correctly Ethics are a framework of practices commonly accepted in society. Ethics Correct Answer Values Morals Principles Answered correctly Federal Law The FCRA was extended in 2003 by the following: The Fair and Accurate Credit Transaction Act Correct Answer The Equal Credit Opportunity Act The Federal Reserve The Federal Trade Commission Answered wrong The Fair and Accurate Credit Transaction Act (FACTA) also introduced identity theft prevention and detection requirements. Federal Law Which of the following is not covered under TRID? www.ameritrain.com Question #193 Question #205 Question #449 Construction loan Raw land HELOC Correct Answer 30 Acres of land Answered correctly UST Gary lives in Georgia and is instructing a class on UST. He is asked the question does the UST offered in a Georgia testing center include details specific to Georgia. Which answer is correct? Yes No Correct Answer Only the portions that are different from the S.A.F.E. Act Question #2881 Answered correctly The UST is based on the Model State Law which is a template for states to follow to modify their legislative code/laws to meet the requirements of the S.A.F.E. Act General Mortgage Knowledge Private mortgage insurance is designed to: Question #208 Protect the borrower in the event of default Protect the lender financing a conventional mortgage Correct Answer Protect the settlement agent from a private law suit Protect the lender financing a FHA loan Answered correctly Private mortgage insurance is designed to protect the conventional mortgage lender. It requires that the borrower provide mortgage insurance in the event that the LTV is more than 80 percent Federal Law The Alternative Mortgage Transaction Parity Act (AMPTA) preempted state laws by allowing all of the following EXCEPT: Adjustable rate products Limiting loans to fixed rate products only Correct Answer No limit on prepayment penalties Balloon payments Answered correctly General Mortgage Knowledge Which of the following fees do not protect the homeowner against loss from property damage? Question #290 Question #151 Property insurance Hazard insurance Fire insurance Mortgage insurance Correct Answer Answered correctly Mortgage insurance protects the lender against a borrowers default. Fire, hazard and property insurance all protect the homeowner against loss from property damage Federal Law According to ECOA codes,an “A” means: An individual is contractually obligated to pay all debts An individual is an authorized user of an account Correct Answer An individual is deceased An individual is a cosigner on an account Answered correctly An authorized user has no liability for the debts Ethics Which of the following is not a disclosure requirement for companies advertising and communication with customers relating to MARS? www.ameritrain.com Tell consumers to stop paying their mortgage Correct Answer The lender may not agree to change the consumer’s loan Question #280 Question #652 Name* Company Phone* Email* Zip* Subject* Message* Tell consumers failure to maintain their mortgage could cause them to lose their home and damage their credit rating. They are not associated with the government, and their services have not been approved by the government or the consumer’s lender; Answered correctly UST An individual is considered engaged in origination under the S.A.F.E. Act in the following situation: Question #2888 Acts as a loan originator in providing financing for the sale of that individual's own residence, which happens very infrequently An employee of a government entity who acts as a loan originator only pursuant to his or her official duties as an employee of that government entity Receives a residental loan application Correct Answer A parent who acts as a loan originator in providing loan financing to his or her child Answered correctly 1008 Appendix B Federal Law The TRID rule became effective on: www.ameritrain.com Question #527 January 1, 2015 October 3, 2015 Correct Answer October 1, 2015 August 1, 2015 Answered correctly UST The SAFE ACT is an acronym for: Question #160 Safe and Factual Enforcement for Mortgage Licensing Act Secure and Fair Enforcement for Mortgage Licensing Act Correct Answer Safe and Fair Enforcement for Mortgage Licensing Act Secure and Factual Enforcement for Mortgage Licensing Act Answered correctly The SAFE Act is title V of the Housing and Economic Recovery Act (HERA). It is the Secure and Fair Enforcement, not Safe and Fair Enforcement. CALL US: 1-877-406-0333 Have us contact you: