NMLS S.A.F.E Exam Practice Questions Flashcards

NMLS S.A.F.E Exam Practice Questions Flashcards

The Loan Estimate is required for:a. All commercial and

residential mortgage loansb. All closed-end federally related mortgage loansc. All nontraditional mortgage loansd. All open-end mortgage loans

• All closed-end federally related mortgage loans

RESPA requires _____ to be provided within 45 days of closing. It provides information regarding an estimate of related payments (for expenses such as taxes and insurance) that will be required in the first 12 months of the loan.a. The HUD-1b. The Initial Escrow Statementc. The Loan Estimate formd. The Initial Rate Change Disclosure

• The Initial Escrow Statement

Bob Bachman is applying for a mortgage with MZ Mortgage. He is referred by MZ Mortgage to a title company in which MZ Mortgage has a 10% ownership interest. At what point must Bob be made aware of the relationship between the two companies?a. At the time of the referralb. It is not necessary, because MZ Mortgage owns less than 25% of the title companyc. Within three business days of applicationd. Within three business days after the referral

• At the time of the referral

Under the S.A.F.E. Act, states and their regulatory agencies have the duty and the authority to enact licensing standards that meet the requirements of the Act, while overall responsibility for interpretation, implementation, and

compliance currently lies with:a. The NMLSb. The Federal

Reservec. HUDd. The CFPB

• The CFPB

Which of the following is a trigger term for advertisements for both open-end and closed-end mortgage loans?a.Finance chargeb. Amount of down paymentc. Period of repaymentd. Number of payments

• Finance charge

The reporting form used to communicate HMDA data is called what?a. 1073 due annually by March 1stb.Loan/Registration Application due annually by March 1stc.1004 due annually by March 1std. Loan/Application Register due annually by March 1st

• Loan/Application Register due annually by March 1st

The CHARM Booklet is an educational disclosure required by which piece of federal legislation?a. RESPAb.Regulation Bc. TILAd. FACTA

• TILA

Which of the following is least likely to be held in an escrow or reserve account?a. HOA feesb. Mortgage insurance premiumc. Hazard insurance reserved. Property tax reserve

• HOA fees

Which of the following would not be considered a settlement service?a. Servicing feesb. Escrow servicesc.Origination servicesd. Appraisal services

• Servicing fees

Which of the following in an ad for residential mortgage financing would trigger additional disclosures?a. "VA financing available"b. "Affordable payments"c. "5.75% APR"d. "5% down payment"

• "5% down payment"

Which of the following loans requires the collection of HMDA data?a. Refinance of a second homeb. Financing of a recreational vehiclec. Student loand. SBA loan

• Refinance of a second home

The Dodd-Frank Act listed the creation of financial

education programs as one of the primary functions of:a.

NMLSb. CFPBc. FHAd. HUD

• CFPB

Unilateral increases in the cost of settlement services made by another provider with the intention of retaining the

additional fees are referred to as:a. YSPb. Markupsc.

SRPd. Unearned fees

• Markups

Based on a valid change in circumstance, a creditor must

re-issue a Loan Estimate:a. Immediately upon learning of

the changeb. Within three business days of learning of the changec. Within four business day of learning of the changed. Within five business days of learning of the change

• Within three business days of learning of the change

Which of the following would most likely not be considered a federally-regulated mortgage loan as defined by RESPA?a. Construction Loansb. Subprime loanc. FHA loand. Conventional loan

• Construction Loans

Which of the following fees is not included in the calculation of the finance charge for a mortgage?a. Origination fees charged by the creditorb. Charges for title work by an affiliate of the creditorc. Use of a closing attorney required by the creditord. Fees charged by an unaffiliated appraiser

• Fees charged by an unaffiliated appraiser

What is the primary intent of RESPA?a. Protect borrowers from misleading advertisingb. Eliminate unearned fees, such as referral fees, kickbacks, and fee splittingc. Protect the privacy of a borrower's personal financial informationd.Provide the borrower an opportunity to rescind certain types of loans

• Eliminate unearned fees, such as referral fees,

kickbacks, and fee splitting Slim Tipton, a recent widower, has just refinanced his home, which he has been renting to his son ever since he moved into a beachfront condo two years prior. The purpose of this cash-out refinance is to help his son, Tiny, start a printing business. In this scenario, who receives copies of the Notice of the Right to Cancel?a. Only Slim, since his wife is no longer aliveb. Neither Slim nor Tiny

receives a Notice of the Right to Cancelc. Slim and his son Tiny, since Tiny is living in the home securing the refinanced. Slim is the only one to receive a Notice of the Right to Cancel

• Neither Slim nor Tiny receives a Notice of the Right to

Cancel Which of the following is used as a method of identifying and holding licensees accountable, according to the S.A.F.E. Act?a. NMLS IDb. Records of annual loan originator volumec. Unique identifierd. CSBS number

• Unique identifier

Under the Red Flags Rule, each affected business must:a.

Develop a written plan to reduce identity theftb. Pull two credit reports on all borrowersc. Request three forms of identification from all borrowersd. Compare all customers to the fraud hotline list

• Develop a written plan to reduce identity theft

According to ECOA, a residential mortgage lender may ask a borrower about which of the following for compliance monitoring purposes?a. Child support incomeb. Ethnicityc.Alimony incomed. Separate maintenance payments

• Ethnicity

Homeownership counseling is required in transactions for

all of the following, except:a. Higher-priced mortgage loanb.

High-cost mortgagec. Reverse mortgaged. Negative amortization loan if the loan applicant is a first-time borrower

• Higher-priced mortgage loan

According to TILA, a variation of up to what amount is permitted for the annual percentage rate in a regular fixed-rate mortgage transaction?a. 0.25%b. 0.5%c.

0.125%d. 0.75%

• 0.125%

When may a homeowner request that PMI be cancelled?a.When the lender informs him/her that it is terminating PMIb.As soon as the five-year required minimum is metc. As soon as his/her equity position reaches at least 22%d. As soon as his/her equity position is 20% or greater

• As soon as his/her equity position is 20% or greater

Five siblings have ownership rights to a property. If a refinance transaction affecting the property is subject to rescission, how many of these individuals must submit a rescission notice in order to void the loan?a. All fiveb. A majority of the fivec. At least two of the fived. Any one of the five

• Any one of the five

Assuming that a borrower is allowed for title insurance and the opt to pick a policy not referred to by the lender, which of the following best describes the applicable tolerance?a.Zero toleranceb. No tolerance requirementc. Tolerance depends on certain factorsd. 10% tolerance

• No tolerance requirement

Mortgage loan originator Trevor Tibbs has accepted a loan application for a dwelling that is a mobile home not permanently affixed to the land. Does this mobile home meet the requirements necessary for it to be considered security for a residential mortgage loan?a. Yes, a dwelling includes a structure whether or not that structure is attached to real propertyb. No, dwellings must be permanently attached to real propertyc. No, mobile homes are classified as personal property, not real propertyd. Yes, as long as the real property upon which the mobile home will be located is in the borrower's name, the loan may be a