SAFE MLO NATIONAL COMPONENT WITH
UNIFORM STATE TEST EXAMINATION
COMPLETE QUESTIONS AND ANSWERS
FULL SOLUTION VERIFIED
●● Who does the CFPB protect?
Answer: The Consumer Financial Protection Bureau protects consumers
in the financial marketplace.
●● What does the CFPB do?
Answer: CFPB is now in charge of implementing and enforcing most of
the provisions of federal lending laws that relate to protecting consumers
while they are shopping for, securing, and paying off mortgages.
●● What is the purpose of RESPA? (3 things)
Answer: a.Protect consumers from excessive settlement costs and
unearned fees
b.Limit the amount of funds that creditors can require consumers to
deposit into escrow accounts
c.Establish disclosures, policies, and procedures to facilitate timely
communications between loan servicers and consumers
,●● Who is responsible for the enforcement of RESPA and for issuing
implementing regulations?
Answer: The CFPB
●● What are RESPA's regulations called?
Answer: Regulation X
●● Which 2 documents replaced RESPA's Good Faith Estimate and the
Truth-in-Lending Disclosure?
Answer: 1.) Loan Estimate
2.) Closing Disclosure
●● What types of mortgages does RESPA cover?
Answer: "Federally-related mortgage loans," the requirements of RESPA
apply to virtually every home loan secured by a mortgage.
●● What type of loans does RESPA not pertain to?
Answer: a. Loans for business, commercial, or agricultural purposes
b. Temporary financing
c. Loans secured by vacant land
,d. The sale of a loan into the secondary market
e. Loan conversions (same note - new terms)
●● Is compensating someone for a referral legal?
Answer: No!!!
●● What is "borrower credit"?
Answer: Historically referred to as "yield spread premium" (YSP), the
borrower credit is a fee paid to the borrower by the lender when a loan is
originated at a higher interest rate than the lowest rate for which the
borrower qualifies. The borrower credit is used to subsidize closing
costs, such as the origination or broker fee, because it is financed so that
out-of-pocket closing costs are "borrowed" from the lender.
●● What is a markup?
Answer: A unilateral increase in the cost of a settlement service and
retention of the additional fee by the party making the markup. The
controversy over markups and their legality is discussed in a subsequent
course section. As a practice that may easily lead to litigation, it is one
that should not be used without obtaining legal advice.
●● What are the 5 disclosures required by RESPA?
, Answer: 1.) Loan Estimate
2.) Closing Disclosure
3.) Settlement Cost Information Booklet
4.) Mortgage Servicing Disclosure Statement
5.) Affiliated Business Arrangement Disclosure
●● Are creditors allowed to add their name to the cover of the Special
Information Booklet sent to borrowers?
Answer: Yes
●● Are they allowed to translate it into other languages?
Answer: Yes
●● Are they allowed to send it with other materials in a larger
document?
Answer: No
●● For a loan with a co-borrower, must each applicant receive a Special
Information Booklet?
Answer: No, only one person has to receive.
●● After a loan application is submitted, how many business days later
must a borrower receive their Special Information Booklet?
UNIFORM STATE TEST EXAMINATION
COMPLETE QUESTIONS AND ANSWERS
FULL SOLUTION VERIFIED
●● Who does the CFPB protect?
Answer: The Consumer Financial Protection Bureau protects consumers
in the financial marketplace.
●● What does the CFPB do?
Answer: CFPB is now in charge of implementing and enforcing most of
the provisions of federal lending laws that relate to protecting consumers
while they are shopping for, securing, and paying off mortgages.
●● What is the purpose of RESPA? (3 things)
Answer: a.Protect consumers from excessive settlement costs and
unearned fees
b.Limit the amount of funds that creditors can require consumers to
deposit into escrow accounts
c.Establish disclosures, policies, and procedures to facilitate timely
communications between loan servicers and consumers
,●● Who is responsible for the enforcement of RESPA and for issuing
implementing regulations?
Answer: The CFPB
●● What are RESPA's regulations called?
Answer: Regulation X
●● Which 2 documents replaced RESPA's Good Faith Estimate and the
Truth-in-Lending Disclosure?
Answer: 1.) Loan Estimate
2.) Closing Disclosure
●● What types of mortgages does RESPA cover?
Answer: "Federally-related mortgage loans," the requirements of RESPA
apply to virtually every home loan secured by a mortgage.
●● What type of loans does RESPA not pertain to?
Answer: a. Loans for business, commercial, or agricultural purposes
b. Temporary financing
c. Loans secured by vacant land
,d. The sale of a loan into the secondary market
e. Loan conversions (same note - new terms)
●● Is compensating someone for a referral legal?
Answer: No!!!
●● What is "borrower credit"?
Answer: Historically referred to as "yield spread premium" (YSP), the
borrower credit is a fee paid to the borrower by the lender when a loan is
originated at a higher interest rate than the lowest rate for which the
borrower qualifies. The borrower credit is used to subsidize closing
costs, such as the origination or broker fee, because it is financed so that
out-of-pocket closing costs are "borrowed" from the lender.
●● What is a markup?
Answer: A unilateral increase in the cost of a settlement service and
retention of the additional fee by the party making the markup. The
controversy over markups and their legality is discussed in a subsequent
course section. As a practice that may easily lead to litigation, it is one
that should not be used without obtaining legal advice.
●● What are the 5 disclosures required by RESPA?
, Answer: 1.) Loan Estimate
2.) Closing Disclosure
3.) Settlement Cost Information Booklet
4.) Mortgage Servicing Disclosure Statement
5.) Affiliated Business Arrangement Disclosure
●● Are creditors allowed to add their name to the cover of the Special
Information Booklet sent to borrowers?
Answer: Yes
●● Are they allowed to translate it into other languages?
Answer: Yes
●● Are they allowed to send it with other materials in a larger
document?
Answer: No
●● For a loan with a co-borrower, must each applicant receive a Special
Information Booklet?
Answer: No, only one person has to receive.
●● After a loan application is submitted, how many business days later
must a borrower receive their Special Information Booklet?
