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Definitions |
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What is redlining?
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Refusing to lend to a specific neighborhood
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Borrower has a right to recieve apprasial within how many days?
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30
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A GFE contains?
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estimated closing costs
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Interest only has what feature?
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They can be paid off faster than fully amortized.
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What is considered the an illegal referal?
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Lead generating company gets a percentage of loan amount on a closed deal
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Whish type of loan processing woul include only an appraisal and a crdit score?
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No documentation
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APR consists of
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the closign costs financed into the balance of the loan in an interest rate form
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The HUD-1A settlement statement is designed for use when?
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no seller is involved in the transaction
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A loan calls for payments if 2000 a month for the first 60 months and then go up to 2300 a month for the remainder of the 30 year term. What kind of loan is this?
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5 year fixed ARM
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Which law prevents a lender from making any oral or written statement, in advertising or otherwise, to applicants or prospective applicants that may discourage a reasonable person from making or pursuing an app?
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ECOA
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The 1003 included a section requesting info regarding government monitoring. Applicants must complete this section...
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only if they wish
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What does PUD stand for?
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planned unit development
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Regulation Z was issued to implement the Truth in Lending Act by?
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The Board of Governors of the Federal Reserve System
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The practice of lenders refusing to provide financing to qualified applicants on reasonable terms and conditions due tot he geographic area in which the property is located is?
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redlining
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The 3 day right to rescission provided by Truth in Lending and Regulation Z applies to a loan
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to refinance a loan from the same institution that fails to cover the unpaid balance of the prior loan plus closing costs
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What is the IO fully indexed accrural rate?
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the sum of the index + the margin
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What is COFI?
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It shows the slow moving Cost of Funds Index
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When is an ALTA policy not needed?
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When the is no lender involved
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FHA requires a borrower to maintain hazard insurance of at least the lesser of
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the loan balance or the replacement costs of the improvements
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Each loan originator is indentified in the NMLS database by...
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unique identifier
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The cost of an appraisal, paid outside of closing can be found on teh HUD-1 Settlement as?
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POC
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What percentage variance is allowed in a fannie mae appraisal report is tolerable when dealing with comps without justification.
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15
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A basis point is?
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one-one hundreth of a percent
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The Gramm-Leech-Bliley Act requires that financial institutions giuve consumers what period of time to opt out of allowing the sharing of their non-public personal information
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No specified time but a reasonable opportunity
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A consumer has the right to inspect his HUD-1 settlement statement how many business days prior to closing?
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1
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The Truth in Lending Disclosure statement shows?
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finance charges
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For an FHA loan, an acceptable source of a down payment is ....
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a gift from a non-profit organization
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What is the housing/ debt ratio for FHA loans?
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31%housing/ 43% debt
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Service release premium represents?
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the profit a bank makes when selling the servicing rights of a loan.
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A creditor failed to deliver the required TILA rescission notice and material disclosures. As a result the borrower's right to rescind was extended for how many years from the date of consumation of the transaction?
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3 years
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An appraisal that is appraised with a higher than market value appraisal results in an?
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inflated appraisal
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What is the prupose of RESPA?
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To regulate closing costs
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What is the purpose of the Market Conditions Addendum?
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provide the lender with a clear understanding of the market trends and conditions in the subject neighborhood
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When the actual charges at the settlement exceed the estimates on the GFE by more than 10% tolerances, the loan originator must what?
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has 30 days from the settlement to refund the excess to the borrower
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What can be counted as income for self-emplyed borrowers?
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Depreciation
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What is the prupose for FHA?
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To provide governement method for insuring mortgages
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PFC means
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Prepaid Finance Charges
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What is the main prupose of Fannie Mae and freddie mac?
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to provide a source of funds for the mortgage lender
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How do you get your LTV ratio?
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total of all loans/ property value
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Which of the following CANNOT be used to help pay the down payment for a buyer wanting an FHA loan?
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a gift from the seller
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A disocunt point is used for?
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Buying down the interest rate for a charge
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What is used to reduce interest rates?
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discount points
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RESPA does not require lender disclosures of closing costs and procedures for which home loans?
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construction loans
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Test nortgage transfered servicing rights of some of his mortgage loans to Answer Mortgage. Test must send a servicing transfer statement to the affected borrowers how many days before the effective date of transfer?
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15
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What charges have a 10% tolerance?
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govt recording tolerances
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When is notice of adverse action requried when the borrower applies for a loan?
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30 days
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A conventional loan is a loan that
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is nmot issued, insured, or guaranteed by a government huosing entity.
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An Alt-A loan is a class of?
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subprime loan
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A 3/1 ARM is?
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a fixed period ARM
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What is the cost of having an impound account?
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escrow waiver fee
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In the sales comparison appraisal approach, the appraiser uses what as comparable sales?
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recent sales in the area
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What is a 2/1 buydown?
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reduces the interest rate by 2% the first year and 1% the second year
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A real estate agent believes that his Asian client may prefer to live in a more diverse area and so only shows him the homes where there is a high concentratuion of Chinese. What is this agent guilty of?
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Steering
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A loan applicant's employment is verified by?
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completion of a VOE by the employer
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When a telemarketer calls someone on the do not call list they ar4e subject to how much in fines?
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$16000
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The risk that an agent may not have his client's best interest at heart is called?
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principal agent risk
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Which federal agency administers regulation B implementing ECOA, regulation C implementing HMDA, and regulation Z implementing TILA?
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FRB
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What is the type of loan an investor cannot come after the borrower?
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Non-resourse
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The federal regulation that implements the REal Estate Settlement Procedures Act is...
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Regulation X
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Regulation X requires that the estimate of the charges and terms be available for what period of time after the GFE is provided?
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10 business days
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What is the minimum equity required to automatically eliminate MI?
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22%
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The cost of a loan is shown in the annual percentage rate in the?
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TIL Disclosure Statement
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RESPA requires that the borrower be given which document at closing?
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HUD-1 Settlement Statement
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When a self-employed person is 25% owner of a business, which of the following documents needs to be reviwed to determine his loan qualifications?
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TAX RETURNS
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Lien priority based on the respective dates of recording of the mortgages can be changed by a ?
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subordination clause
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If a refinance is closing on 10/15 and the borrowers is not waiving their escrows, how many months of insurance can they collect?
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depends upon the expiration date of the insurance company
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What should not be given to a consumer who applies for an ARM loan?
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the interest rate upon the first adjustment
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After the loan is sold to the secondary market, the originating lender may be required to purhase the loan back due to....
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a buyback agreement
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What is the variance allowed on adjustments for apprasisals according to Fannie Mae and Freddie Mac?
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20%
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Inclusion of the permium for single-premium creduit life insurance in the principal loan amount without the borrower's informed consent is one example of?
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packing
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A portion of each payment made on an uninsured loan without an escrow account is applied to?
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interest and principal
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What law regulates and sets limits on the origination fee?
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RESPA
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What is a convertible ARM? What does it allow borrowers to do?
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change from an adjustable rate to a fixed rate mortgage
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At closing a borrower may deposit funds to establish reserves for what?
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taxes and insurance
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Borrowers buying a 100K house, sellers agree to credit up to 3% of the closing costs. The closing costs are $3500, how much can be credited?
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3000
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Under the Graham-Leech-Bliley Act, a person is considered a consumer of a financial institution when the person....
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obtains credit from the financial institution for personal purposes
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What is the Fannie Mae housing insurance minimum?
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100% of the replacement cost of loan balance
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In the loan app process which of the documents refers to the shopping cart?
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Good Faith Estimate
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What prevents the title from being transferred?
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encumbance/ lien
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Who is the entity that administers RESPA?
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Dept of Housing
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The pricing model used for subprime loans has been?
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risk based
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WHich charges have a no tolerance restriction?
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transfer taxes
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What disclosure would show if a loan is a balloon payment or not?
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Truth in Lending
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The rules relating to the Federal Trade Commission's "no call" registry allow calls to persons on a no call list are:
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for up to 18 months after a business transaction has been completed with them
for up to 3 months after they have made an inquiry
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The TIL is not required on any business/commercial credit lines used for any?
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business transaction
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How can one calculate the nummber of years it will take to recover the costs of refinancing a loan?
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total costs/ monthly savings due to refinancing/ 12
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Who is the entity that administers RESPA?
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Dept. of Housing
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Which law is the Truth in Lending Act most closely related to?
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RESPA
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What document provides information about the penalty for providing fraudulant answers on the 1003?
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The Uniform Residential Loan App
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What does Investors with non-recourse loans mean?
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Borrower does not have any recourse on default
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What is the defeasance clause?
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states the lender will remove the lien when the debt is repaid
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Without a waiver, an applicant for a conforming loan must be given a copy of the appraisal when?
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At least 3 business days prior to closing
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What is the lowest payment option for an ARM?
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the minimum payment
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An AR< rate adjustment will take into account what?
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Index rate, margin, and cap
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The interest rate for an ARM will change periodically based on?
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its index and margin
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Which law requires distribution of teh CHARM booklet to certain loan applicants?
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truth in lending act
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Which of the following provide a guarantee against losses to a lender in the event of default on a residential mortgage loan?
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USDA(RHS)
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What part of the app process is the GFE required?
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within 3 days of the complete app
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What is the margin?
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teh amount the lender adds to a selected index rate
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A copy of the appraisal is provided when?
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At close of escrow
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In qualifying the income ofa sole proprietor borrowerm the orginator should consider what?
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Schedule C net income, plus on-cash expenses and depreciation
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When is the appraisal disclosure required to be delivered?
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when a complete app is taken
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