National and UST Mortgage Practice
Exam 2 Questions and Answers Graded
A+
Stan has been in his house for 15 years and built up $100,000 in equity. He decides
to do some remodeling and pay off some bills, and he wants to use a closed-end
home equity loan to pay for it. He meets with Lending Guys and, because he has a
great credit history, gets loan approval right away. Two weeks later he signs the
documents. Which of the following is true?
A. Stan may rescind the loan at any time during the term of the loan
B. Stan's loan is not subject to provisions of the Real Estate Settlement Procedures
Act
C. Lending Guys was required to provide Stan with a copy of the Special
Information Booklet within three days after he submitted the application
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,D. Stan was required to provide Lending Guys with a Certificate of Completion
prior to signing his final documents, indicating that he has completed
homeownership counseling with a HUD-approved provider - Correct answer-C.
Lending Guys was required to provide Stan with a copy of the Special Information
Booklet within three days after he submitted the application
A borrower taking a closed-end home equity loan must be provided with a copy of
the Special Information Booklet within three days after submission of the
application. A borrower is NOT required to complete homeownership counseling
unless the loan is a high-cost home loan. Stan may rescind his loan in accordance
with TILA's right of rescission; however, this right does not extend for the entire
term of the loan.
A "straw buyer" is:
A. A buyer who is a victim of identity theft
B. A buyer who uses another individual's identity in order to obtain a mortgage for
which he or she is not eligible
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,C. A buyer who accepts a fee for the use of his or her Social Security Number and
other personal information on a mortgage application
D. A buyer who intends to purchase property but does not intend to occupy it -
Correct answer-C. A buyer who accepts a fee for the use of his or her Social
Security Number and other personal information on a mortgage application
A straw buyer is a person who purchases the property or applies for the loan in his
or her own name for the actual borrower and is typically paid for the use of his or
her personally identifying information.
Under the Fair Housing Act:
A. Lending decisions cannot be made based on residency status
B. Charging different fees based on race is prohibited
C. Lenders must provide clear, plain-language disclosures
D. Lenders are required to report demographic information to the federal
government - Correct answer-B. Charging different fees based on race is prohibited
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, The Fair Housing Act prohibits discrimination in the sale, rental, and financing of
any residential housing based on race, color, religion, national origin, sex, familial
status, or mental or physical handicap, and therefore, prohibits charging different
fees based on race. Residency status is not a protected category under the Fair
Housing Act. Disclosure requirements are not imposed by the Fair Housing Act.
Government reporting requirements are covered under the Home Mortgage
Disclosure Act (HMDA).
This term refers to the practice of adjusting certain types of non-taxable income
during underwriting.
A. Flopping
B. Inflating
C. Ballparking
D. Grossing up - Correct answer-D. Grossing up
Certain types of income may be grossed-up during underwriting. Underwriters may
gross-up Social Security income, child support, and some other forms of income,
subject to limitations based on product type and other guidelines.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
Exam 2 Questions and Answers Graded
A+
Stan has been in his house for 15 years and built up $100,000 in equity. He decides
to do some remodeling and pay off some bills, and he wants to use a closed-end
home equity loan to pay for it. He meets with Lending Guys and, because he has a
great credit history, gets loan approval right away. Two weeks later he signs the
documents. Which of the following is true?
A. Stan may rescind the loan at any time during the term of the loan
B. Stan's loan is not subject to provisions of the Real Estate Settlement Procedures
Act
C. Lending Guys was required to provide Stan with a copy of the Special
Information Booklet within three days after he submitted the application
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,D. Stan was required to provide Lending Guys with a Certificate of Completion
prior to signing his final documents, indicating that he has completed
homeownership counseling with a HUD-approved provider - Correct answer-C.
Lending Guys was required to provide Stan with a copy of the Special Information
Booklet within three days after he submitted the application
A borrower taking a closed-end home equity loan must be provided with a copy of
the Special Information Booklet within three days after submission of the
application. A borrower is NOT required to complete homeownership counseling
unless the loan is a high-cost home loan. Stan may rescind his loan in accordance
with TILA's right of rescission; however, this right does not extend for the entire
term of the loan.
A "straw buyer" is:
A. A buyer who is a victim of identity theft
B. A buyer who uses another individual's identity in order to obtain a mortgage for
which he or she is not eligible
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,C. A buyer who accepts a fee for the use of his or her Social Security Number and
other personal information on a mortgage application
D. A buyer who intends to purchase property but does not intend to occupy it -
Correct answer-C. A buyer who accepts a fee for the use of his or her Social
Security Number and other personal information on a mortgage application
A straw buyer is a person who purchases the property or applies for the loan in his
or her own name for the actual borrower and is typically paid for the use of his or
her personally identifying information.
Under the Fair Housing Act:
A. Lending decisions cannot be made based on residency status
B. Charging different fees based on race is prohibited
C. Lenders must provide clear, plain-language disclosures
D. Lenders are required to report demographic information to the federal
government - Correct answer-B. Charging different fees based on race is prohibited
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, The Fair Housing Act prohibits discrimination in the sale, rental, and financing of
any residential housing based on race, color, religion, national origin, sex, familial
status, or mental or physical handicap, and therefore, prohibits charging different
fees based on race. Residency status is not a protected category under the Fair
Housing Act. Disclosure requirements are not imposed by the Fair Housing Act.
Government reporting requirements are covered under the Home Mortgage
Disclosure Act (HMDA).
This term refers to the practice of adjusting certain types of non-taxable income
during underwriting.
A. Flopping
B. Inflating
C. Ballparking
D. Grossing up - Correct answer-D. Grossing up
Certain types of income may be grossed-up during underwriting. Underwriters may
gross-up Social Security income, child support, and some other forms of income,
subject to limitations based on product type and other guidelines.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
