National Exam 125 Question
Comprehensive Practice National
Exam COMPLETE 300 QUESTIONS
AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY
GRADED A+
more than one company at a time. Which of the following would describe a
non-conforming loan? - ANSWER//A conforming loan is any loan that follows
Fannie Mae and Freddie Mac guidelines; if a loan does not follow Fannie or
Freddie Mac guidelines then it is considered non-conforming Andrew's
borrower wants to refinance his home and Andrew has put together some
great options. Of those options, Andrew wants his borrower to chose the ARM
option because his company is giving bonuses to everyone who sells an ARM.
Andrew pressures his borrower into choosing that options. Andrew is guilty of
what? - ANSWER//Andrew is steering this particular borrower into a program
specifically because it benefits Andrew more. This is considered steering and
is an illegal practice. The Loan Originator Compensation Rule specifically
prohibits what is occurring in this situation because Andrew is receiving
compensation based upon a term of the loan, in this case, the fact that the
loan is an adjustable rate mortgage. Which of the following situations would
be considered a prohibited act or practice? - ANSWER//Riley is not a licensed
mortgage loan originator and yet he is acting as a mortgage loan originator by
discussing specific options for interest rates with the borrower. Riley is guilty
of unlicensed activity and can face repercussions for his actions. All of the
following are true about the FTC Red Flags Rule except: - ANSWER//The
FTC Red Flags Rule is enforced by the Federal Trade Commission. The FTC
Red Flags Rule was specifically put into place to help with the prevention and
detection of identity theft and falls under FACTA. It requires lenders to
implement a written plan to detect and prevent identity theft, and if a lender
fails to comply with this, they can be penalized $3,500 . Which disclosure,
required to be sent three days after application, indicates to the borrower
whether or not the servicing of their loan may be sold or transferred? -
ANSWER//The Mortgage Servicing Disclosure, required by RESPA, is
specifically supposed to inform the consumer whether or not the servicing of
their loan will remain with the originating lender or if it will be sold to another
company to be serviced Which federal law allows borrowers to request PMI
cancellation when their LTV reaches 80%? - ANSWER//The Homeowners
Protection Act is all about Private Mortgage Insurance (PMI). It specifies that
a borrower can request PMI be taken off of their loan at 80% LTV but that it
must be removed when the borrower's LTV at 78% Reginald works a full-time
job as a schoolteacher and makes $43,000 a year. He also has been working
, a part-time job for the last two years working 10 hours a week at $10.50 an
hour. His wife, Julia, works as a medical assistant and makes $22.50 an hour
and works 45 hours a week. What is their gross monthly income? -
ANSWER//$8,426 The legal link between a person who owns property and
the property itself is the: - ANSWER//Title is the legal link between a person
who owns a property and the property itself. The deed is the document that
conveys ownership in a property between people. Section 35 of TILA governs
what type of loan? - ANSWER//Section 35 of TILA governs higher priced
loans, not to be confused with Section 32, which covers high cost loans. How
many years of employment is required to be disclosed on the 1003? -
ANSWER//The 1003 requires that 2 years minimum be disclosed on the 1003.
So if an individual has only been at their current job 6 months, you'll need to
account for another 1.5 years of employment. Genevieve wants to buy a
home, but her credit score took a tank after her divorce. Her brother, Donald
has a great credit profile, though, and she asks him to apply for a loan for her.
Genevieve promises Donald that she will pay the mortgage. What would
Donald be considered? - ANSWER//Donald would be considered a straw
buyer because Genevieve is using his credit profile and his identity for the
purpose of obtaining a loan Jordan has a bankruptcy on her credit report. How
long can that bankruptcy continue to stay on her credit report? -
ANSWER//Jordan's bankruptcy will continue to appear on her credit report for
10 years and then it will fall off of the credit report What are the three types of
appraisal? - ANSWER//There are three types of appraisals, the income
approach, the cost approach and the sales comparison approach. What type
of appraisal takes the cost of rebuilding the property, plus the cost of the land
the property is on and subtracts any depreciation to determine a value of the
property? - ANSWER//The cost approach appraisal is the simplest of the
three types of appraisals. It is simply the cost of rebuilding the house plus the
cost of the land it sits on. If there is any depreciation, then it would need to be
subtracted from the value of the property. Anna is looking to purchase a new
home. She lives in a small town of under 20,000 people. What loan program
would be a good option for her? - ANSWER//Anna lives in a rural area,
therefore, she would likely qualify for a USDA loan, and it should be
something that a mortgage loan originator should present to her. Which law
promotes informed use of credit by requiring the disclosure of the APR to the
borrower? - ANSWER//TILA requires the disclosure of the borrower's APR
and thus promotes informed use of credit. TILA was put into place in 1968,
and is also know as Regulation Z, over the course of its lifetime, TILA has
been expanded its protection of consumers and its requirements for
disclosure of pertinent information regarding a borrower's transaction. When
must the Home Loan Toolkit be provided to the borrower? - ANSWER//The
Home Loan Toolkit must be provided 3 days after application on purchase
transaction per the TILA-RESPA Integrated Disclosure Rule. There is a lender
working in a large metropolitan area, but currently, they are targeting a low-
income neighborhood and charging more for their loans because the
individuals in the area are mostly African American. This would be considered:
- ANSWER//Reverse Redlining is the opposite of Redlining. It is drawing a red
line around an area and then going into the area and taking advantage of
those individuals by charging them higher fees for their loans. For borrowers,
what would be a good fit for a reverse mortgage? - ANSWER//Being over 62
Comprehensive Practice National
Exam COMPLETE 300 QUESTIONS
AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY
GRADED A+
more than one company at a time. Which of the following would describe a
non-conforming loan? - ANSWER//A conforming loan is any loan that follows
Fannie Mae and Freddie Mac guidelines; if a loan does not follow Fannie or
Freddie Mac guidelines then it is considered non-conforming Andrew's
borrower wants to refinance his home and Andrew has put together some
great options. Of those options, Andrew wants his borrower to chose the ARM
option because his company is giving bonuses to everyone who sells an ARM.
Andrew pressures his borrower into choosing that options. Andrew is guilty of
what? - ANSWER//Andrew is steering this particular borrower into a program
specifically because it benefits Andrew more. This is considered steering and
is an illegal practice. The Loan Originator Compensation Rule specifically
prohibits what is occurring in this situation because Andrew is receiving
compensation based upon a term of the loan, in this case, the fact that the
loan is an adjustable rate mortgage. Which of the following situations would
be considered a prohibited act or practice? - ANSWER//Riley is not a licensed
mortgage loan originator and yet he is acting as a mortgage loan originator by
discussing specific options for interest rates with the borrower. Riley is guilty
of unlicensed activity and can face repercussions for his actions. All of the
following are true about the FTC Red Flags Rule except: - ANSWER//The
FTC Red Flags Rule is enforced by the Federal Trade Commission. The FTC
Red Flags Rule was specifically put into place to help with the prevention and
detection of identity theft and falls under FACTA. It requires lenders to
implement a written plan to detect and prevent identity theft, and if a lender
fails to comply with this, they can be penalized $3,500 . Which disclosure,
required to be sent three days after application, indicates to the borrower
whether or not the servicing of their loan may be sold or transferred? -
ANSWER//The Mortgage Servicing Disclosure, required by RESPA, is
specifically supposed to inform the consumer whether or not the servicing of
their loan will remain with the originating lender or if it will be sold to another
company to be serviced Which federal law allows borrowers to request PMI
cancellation when their LTV reaches 80%? - ANSWER//The Homeowners
Protection Act is all about Private Mortgage Insurance (PMI). It specifies that
a borrower can request PMI be taken off of their loan at 80% LTV but that it
must be removed when the borrower's LTV at 78% Reginald works a full-time
job as a schoolteacher and makes $43,000 a year. He also has been working
, a part-time job for the last two years working 10 hours a week at $10.50 an
hour. His wife, Julia, works as a medical assistant and makes $22.50 an hour
and works 45 hours a week. What is their gross monthly income? -
ANSWER//$8,426 The legal link between a person who owns property and
the property itself is the: - ANSWER//Title is the legal link between a person
who owns a property and the property itself. The deed is the document that
conveys ownership in a property between people. Section 35 of TILA governs
what type of loan? - ANSWER//Section 35 of TILA governs higher priced
loans, not to be confused with Section 32, which covers high cost loans. How
many years of employment is required to be disclosed on the 1003? -
ANSWER//The 1003 requires that 2 years minimum be disclosed on the 1003.
So if an individual has only been at their current job 6 months, you'll need to
account for another 1.5 years of employment. Genevieve wants to buy a
home, but her credit score took a tank after her divorce. Her brother, Donald
has a great credit profile, though, and she asks him to apply for a loan for her.
Genevieve promises Donald that she will pay the mortgage. What would
Donald be considered? - ANSWER//Donald would be considered a straw
buyer because Genevieve is using his credit profile and his identity for the
purpose of obtaining a loan Jordan has a bankruptcy on her credit report. How
long can that bankruptcy continue to stay on her credit report? -
ANSWER//Jordan's bankruptcy will continue to appear on her credit report for
10 years and then it will fall off of the credit report What are the three types of
appraisal? - ANSWER//There are three types of appraisals, the income
approach, the cost approach and the sales comparison approach. What type
of appraisal takes the cost of rebuilding the property, plus the cost of the land
the property is on and subtracts any depreciation to determine a value of the
property? - ANSWER//The cost approach appraisal is the simplest of the
three types of appraisals. It is simply the cost of rebuilding the house plus the
cost of the land it sits on. If there is any depreciation, then it would need to be
subtracted from the value of the property. Anna is looking to purchase a new
home. She lives in a small town of under 20,000 people. What loan program
would be a good option for her? - ANSWER//Anna lives in a rural area,
therefore, she would likely qualify for a USDA loan, and it should be
something that a mortgage loan originator should present to her. Which law
promotes informed use of credit by requiring the disclosure of the APR to the
borrower? - ANSWER//TILA requires the disclosure of the borrower's APR
and thus promotes informed use of credit. TILA was put into place in 1968,
and is also know as Regulation Z, over the course of its lifetime, TILA has
been expanded its protection of consumers and its requirements for
disclosure of pertinent information regarding a borrower's transaction. When
must the Home Loan Toolkit be provided to the borrower? - ANSWER//The
Home Loan Toolkit must be provided 3 days after application on purchase
transaction per the TILA-RESPA Integrated Disclosure Rule. There is a lender
working in a large metropolitan area, but currently, they are targeting a low-
income neighborhood and charging more for their loans because the
individuals in the area are mostly African American. This would be considered:
- ANSWER//Reverse Redlining is the opposite of Redlining. It is drawing a red
line around an area and then going into the area and taking advantage of
those individuals by charging them higher fees for their loans. For borrowers,
what would be a good fit for a reverse mortgage? - ANSWER//Being over 62
