UST EXAM LATEST FINAL 2024 ACTUAL EXAM 160
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED
A+
A consumer calls to ask about a loan product. How does TILA require you to quote an
interest rate to him? - ANSWER: The APR and the interest rate
A wraparound mortgage: - ANSWER: Occurs when a new mortgage plus an existing
mortgage is structured as a single obligation
Which of the following is true of an FHA borrower? - ANSWER: Only 75% of rental
income counts as qualifying income
A mortgage on personal property is a(n): - ANSWER: Chattel Mortgage
In which way does the federal VA participate in mortgage financing? - ANSWER: It
guarantees lender against loss in the case of foreclosure
An FHA-insured loan is an example of: - ANSWER: Government financing
Amortization is best described as: - ANSWER: Amount of interest payment
decreasing and principle payment increasing
According to Fannie Mae and Freddie Mac, the ideal debt ratios for a conforming
loan are: - ANSWER: 28/36
Which federal legislation requires that, in cases where the borrower does not wish to
provide information as to race or national origin, the loan officer must use a surname
as the basis for this determination? - ANSWER: Home mortgage disclosure act
Net worth is defined as: - ANSWER: Assets minus liabilities
Title V of the Housing and Economic Recovery Act of 2008 is more commonly known
as the: - ANSWER: The SAFE act
The Fair Credit Reporting Act is enforced by: - ANSWER: The Federal Trade
Commission
Under which federal legislation does the consumer have the right to receive a copy
of the appraisal report on a dwelling that is to be used as collateral for a loan? -
ANSWER: ECOA
A limit on the amount of interest or loan fees a creditor may charge is imposed by: -
ANSWER: State Usury Laws
,A Mortgage Servicing Disclosure Statement is required by what law? - ANSWER:
RESPA
Seven years is the maximum length of time information can be reported on a credit
report according to the Fair Credit Reporting Act, EXCEPT for: - ANSWER: Criminal
convictions
All of the following may be included in calculation of the APR EXCEPT: - ANSWER:
Property insurance Premiums
What law covers Settlement services? - ANSWER: Respa Section 6
What Law covers kickbacks, splitting fees and unearned fees? - ANSWER: Respa
section 8
What covers Title insurance? - ANSWER: Respa Section 9
What law covers Escrow accounts? - ANSWER: Respa Section 10
What law says a borrower can sue for 3x the tremble damages? - ANSWER: Respa
Section 6
A mortgage servicer may not file any type of foreclosure action against a delinquent
borrower until the mortgage loan is _____ days delinquent. - ANSWER: 120 days
An MLO is required to provide _____ loan options to a consumer at the time of
inquiry for each type of transaction in which the consumer expresses an interest. -
ANSWER: 3 types
ECOA states that an MLO may inquire about a borrower's - ANSWER: Citizenship
A Suspicious Activity Report must be filed within ______ days. - ANSWER: 30
calendar days
A SAR report must be retained for ______ years from the date of filing. - ANSWER: 5
years
When a lender tells a 70-year-old borrower he cannot have a 30-year loan because
of his age but that he does qualify for a 15-year loan, this is an example of -
ANSWER: Overt disparate treatment
To comply with Regulation N, Mortgage Acts and Practices regulations, a lender must
keep proof of its advertising for - ANSWER: 2 years
Sally Thompson applied to XYZ Mortgage for an interest-only loan. Because Sally ran
her own hairstyling business out of her home, she was unable to provide income
, documentation and chose instead to utilize a stated income program offered by XYZ.
The combination of an interest-only loan with stated income is an example of -
ANSWER: Risk layering
A loan contains prepayment penalties. Which of the following documents would a
borrower review to confirm this? - ANSWER: Servicing Agreement and Promissary
more
Documents are recorded at the courthouse to prove: - ANSWER: Constructive Notice
Which of the following addresses principle and interest payments on a mortgage
loan? - ANSWER: Amortization Schedule
What types of loans are assumable? - ANSWER: Va loans
What's the report called that a loan servicer gives to the borrower that explains an
increase in hazard insurance or real estate taxes? - ANSWER: Annual Escrow
statement
What is it called when both title insurance policies are issued at the same time? -
ANSWER: Simultaneous issue
Under TILA all of the following are included in the finance charges except? -
ANSWER: Appraisal fee
What is the name of the issuer of mortgage-backed securities that is backed by the
full faith and credit of the United States Treasury? - ANSWER: Ginnie mae
According to FNMA, housing expense ratios are determined by: - ANSWER: Dividing
principle, interest, taxes and insurance by gross monthly income
Which of the following are optional on a loan application? - ANSWER: Race and sex
of a borrower
What law and regulation gives the borrower the ability to challenge the value in an
appraisal - ANSWER: ECOA
What law gives the ability to C where discrimination is coming from? - ANSWER:
HMDA
What law covers section X of the 1003? - ANSWER: HMDA
What Law deals with credit, apr and advertisement of consumer loans? - ANSWER:
TILA Reg Z
What law deals with PMI? - ANSWER: HPA Homeowners protection Act
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED
A+
A consumer calls to ask about a loan product. How does TILA require you to quote an
interest rate to him? - ANSWER: The APR and the interest rate
A wraparound mortgage: - ANSWER: Occurs when a new mortgage plus an existing
mortgage is structured as a single obligation
Which of the following is true of an FHA borrower? - ANSWER: Only 75% of rental
income counts as qualifying income
A mortgage on personal property is a(n): - ANSWER: Chattel Mortgage
In which way does the federal VA participate in mortgage financing? - ANSWER: It
guarantees lender against loss in the case of foreclosure
An FHA-insured loan is an example of: - ANSWER: Government financing
Amortization is best described as: - ANSWER: Amount of interest payment
decreasing and principle payment increasing
According to Fannie Mae and Freddie Mac, the ideal debt ratios for a conforming
loan are: - ANSWER: 28/36
Which federal legislation requires that, in cases where the borrower does not wish to
provide information as to race or national origin, the loan officer must use a surname
as the basis for this determination? - ANSWER: Home mortgage disclosure act
Net worth is defined as: - ANSWER: Assets minus liabilities
Title V of the Housing and Economic Recovery Act of 2008 is more commonly known
as the: - ANSWER: The SAFE act
The Fair Credit Reporting Act is enforced by: - ANSWER: The Federal Trade
Commission
Under which federal legislation does the consumer have the right to receive a copy
of the appraisal report on a dwelling that is to be used as collateral for a loan? -
ANSWER: ECOA
A limit on the amount of interest or loan fees a creditor may charge is imposed by: -
ANSWER: State Usury Laws
,A Mortgage Servicing Disclosure Statement is required by what law? - ANSWER:
RESPA
Seven years is the maximum length of time information can be reported on a credit
report according to the Fair Credit Reporting Act, EXCEPT for: - ANSWER: Criminal
convictions
All of the following may be included in calculation of the APR EXCEPT: - ANSWER:
Property insurance Premiums
What law covers Settlement services? - ANSWER: Respa Section 6
What Law covers kickbacks, splitting fees and unearned fees? - ANSWER: Respa
section 8
What covers Title insurance? - ANSWER: Respa Section 9
What law covers Escrow accounts? - ANSWER: Respa Section 10
What law says a borrower can sue for 3x the tremble damages? - ANSWER: Respa
Section 6
A mortgage servicer may not file any type of foreclosure action against a delinquent
borrower until the mortgage loan is _____ days delinquent. - ANSWER: 120 days
An MLO is required to provide _____ loan options to a consumer at the time of
inquiry for each type of transaction in which the consumer expresses an interest. -
ANSWER: 3 types
ECOA states that an MLO may inquire about a borrower's - ANSWER: Citizenship
A Suspicious Activity Report must be filed within ______ days. - ANSWER: 30
calendar days
A SAR report must be retained for ______ years from the date of filing. - ANSWER: 5
years
When a lender tells a 70-year-old borrower he cannot have a 30-year loan because
of his age but that he does qualify for a 15-year loan, this is an example of -
ANSWER: Overt disparate treatment
To comply with Regulation N, Mortgage Acts and Practices regulations, a lender must
keep proof of its advertising for - ANSWER: 2 years
Sally Thompson applied to XYZ Mortgage for an interest-only loan. Because Sally ran
her own hairstyling business out of her home, she was unable to provide income
, documentation and chose instead to utilize a stated income program offered by XYZ.
The combination of an interest-only loan with stated income is an example of -
ANSWER: Risk layering
A loan contains prepayment penalties. Which of the following documents would a
borrower review to confirm this? - ANSWER: Servicing Agreement and Promissary
more
Documents are recorded at the courthouse to prove: - ANSWER: Constructive Notice
Which of the following addresses principle and interest payments on a mortgage
loan? - ANSWER: Amortization Schedule
What types of loans are assumable? - ANSWER: Va loans
What's the report called that a loan servicer gives to the borrower that explains an
increase in hazard insurance or real estate taxes? - ANSWER: Annual Escrow
statement
What is it called when both title insurance policies are issued at the same time? -
ANSWER: Simultaneous issue
Under TILA all of the following are included in the finance charges except? -
ANSWER: Appraisal fee
What is the name of the issuer of mortgage-backed securities that is backed by the
full faith and credit of the United States Treasury? - ANSWER: Ginnie mae
According to FNMA, housing expense ratios are determined by: - ANSWER: Dividing
principle, interest, taxes and insurance by gross monthly income
Which of the following are optional on a loan application? - ANSWER: Race and sex
of a borrower
What law and regulation gives the borrower the ability to challenge the value in an
appraisal - ANSWER: ECOA
What law gives the ability to C where discrimination is coming from? - ANSWER:
HMDA
What law covers section X of the 1003? - ANSWER: HMDA
What Law deals with credit, apr and advertisement of consumer loans? - ANSWER:
TILA Reg Z
What law deals with PMI? - ANSWER: HPA Homeowners protection Act
