RMLO FOR REAL ESTATE AGENTS (CHAMPIONS) QUESTIONS
AND ANSWERS A+ GRADED. Buy Quality Materials!
Primary Mortgage Market
The market where borrowers and mortgage originators come together to negotiate
terms and effectuate mortgage transaction. Mortgage brokers, mortgage bankers, credit
unions and banks are all part of the primary mortgage market.
Secondary Mortgage Market
A market for the purchase and sale of existing mortgages designed to provide greater
liquidity for selling mortgages.
Commercial Banks
Working capital is primarily generated through deposits from its clients
Private Lenders
The least regulated category of lender, they can fulfill a space in the marketplace for
conventional loans.
Mortgage Companies
Rely on commercial banks that grant "warehouse" lines of credit to them.
Federal Housing Finance Agency (FHFA)
The Federal agency established to restore Fannie Mae & Freddie Mac to a sound &
solvent financial condition.
Government National Mortgage (GNMA) Association
Guarantee that allows mortgage lenders to obtain a better price for their loans in the
capital markets.
Pre-licensing education
Includes topics on federal law and regulations, ethics, non traditional mortgage
products, and origination.
Unique Identifier
a number that permanently identifies each mortgage loan originator, whether he is
licensed or merely registered.
S.A.F.E. Act
Designed to enhance consumer protection & reduce fraud by encouraging states to
establish minimum standards for licensing and registration of MLOs.
State-licensed mortgage loan originator
An MLO employed by a federally insured depository institution is a federally supervised
credit union.
American Association of Residential Mortgage Regulators (AARMR)
National association of executives and employees of the various states charged with the
responsibility for administration & regulation of residential mortgage lending, servicing
and brokering.
Nationwide Mortgage Licensing System & Registry (NMLSR)
All loan originators must be licensed through or registered with_____.
Federal Banking Agencies:
,1.The Board of Governors of the Federal Reserve System
2. The Comptroller of the Currency
3. The National Credit Union Administraton
(NCUA)
4. The Federal Deposit Insurance Corporation
(FDIC)
Regulation G of the SAFE Act establishes
A federal registration requirement for mortgage loan originators.
Regulation "H" authorizes:
The CFPB to implement the Secure and Fair Enforcement for Mortgage Licensing Act of
2008. It also directs the states to adopt minimum uniform standards for licensing &
registration of residential mortgage loan originators.
All loan originators must be licensed through or registered with:
NMLSR
Nov. 1st through Dec. 31st of each year...
Registered MLOs must renew their registration during
Non-traditional Mortgage Product
Any mortgage product other than a 30 year fixed rate mortgage.
Residential Mortgage Loan
Any loan primarily for personal, family, or household use that is secured by a mortgage,
deed of trust, or other equivalent consensual security interest on a dwelling or
residential real estate upon which a dwelling is constructed or intended to be
constructed.
Federally Registered Loan Originator
Is an individual who meets the definition of a loan originator and is an employee of a
depository institution that is regulated by a federal banking agency.
Mortgage Loan Originator
Person who takes a residential mortgage loan application.
Permanently Identifies Loan Originator
Unique Identifier
Stable Income
A borrower's gross monthly income from all verifiable sources that can reasonably be
expected to continue for at least 3 years.
Credit Score
An overall assessment that predicts a borrower's credit risk.
Employee Income
A borrower's base pay/regular wages.
Hard Inquiry
Appears on a consumer's credit report and can influence their credit score.
Soft Inquiry
Does not appear on credit report or impact consumer's credit score.
Exceptions to the 2 year employment history requirement
School and military
, "4 R" model used to determine the borrower's monthly income. Are the
employment & income considered:
Regular (earned on consistent basis), Recurring (weekly, bi-weekly), Received in cash
(W-2, Tax return or Bank Statement), Reasonable (is income inline or realistic for
occupation?)
Credit Scoring was first developed in
The 1950's
The "Three C's of Underwriting"
Credit Reputation, Capacity and Collateral
Collateral
Borrower's total equity or down payment.
Form 1003
Is completed twice during loan application. First time is generally referred to as "initial
1003...at time of application.
Credit worthiness
Often determined from the applicant's credit history and experience regarding
repayment of loans & use of revolving credit such as credit cards.
The most critical lending component is
Establishing suitability...matching a borrower with a loan that they are able to repay.
Lender's use qualifying ______ to determine if a borrower can qualify for a
mortgage.
Ratios
Liquid Assets
are cash and items that can be quickly converted to cash
FICO
Credit score...ranging from 350 to 850 points
How may an RLMO accept a residential loan application?
Via internet, over the phone & face to face.
Interim Interest
Principal x Payment Rate divided by 360 or 365 days x number of days until end of
month.
Simple Interest
principal x rate x time
Percentage
Means per 100 or per 100 parts. It also means rate.
Basis Point
Equal to 1/100th of 1%
Combined loan-to-value
Calculated when a borrower finances two or more mortgage loans on a property.
Loan to Value (LTV)
Is calculated by dividing the amount of the loan by the LOWER of the appraised value
or sales price.
Home Equity Line of Credit (HELOC).
Line of credit based on equity in home.
PITI
Principal, Interest, Taxes, Insurance
AND ANSWERS A+ GRADED. Buy Quality Materials!
Primary Mortgage Market
The market where borrowers and mortgage originators come together to negotiate
terms and effectuate mortgage transaction. Mortgage brokers, mortgage bankers, credit
unions and banks are all part of the primary mortgage market.
Secondary Mortgage Market
A market for the purchase and sale of existing mortgages designed to provide greater
liquidity for selling mortgages.
Commercial Banks
Working capital is primarily generated through deposits from its clients
Private Lenders
The least regulated category of lender, they can fulfill a space in the marketplace for
conventional loans.
Mortgage Companies
Rely on commercial banks that grant "warehouse" lines of credit to them.
Federal Housing Finance Agency (FHFA)
The Federal agency established to restore Fannie Mae & Freddie Mac to a sound &
solvent financial condition.
Government National Mortgage (GNMA) Association
Guarantee that allows mortgage lenders to obtain a better price for their loans in the
capital markets.
Pre-licensing education
Includes topics on federal law and regulations, ethics, non traditional mortgage
products, and origination.
Unique Identifier
a number that permanently identifies each mortgage loan originator, whether he is
licensed or merely registered.
S.A.F.E. Act
Designed to enhance consumer protection & reduce fraud by encouraging states to
establish minimum standards for licensing and registration of MLOs.
State-licensed mortgage loan originator
An MLO employed by a federally insured depository institution is a federally supervised
credit union.
American Association of Residential Mortgage Regulators (AARMR)
National association of executives and employees of the various states charged with the
responsibility for administration & regulation of residential mortgage lending, servicing
and brokering.
Nationwide Mortgage Licensing System & Registry (NMLSR)
All loan originators must be licensed through or registered with_____.
Federal Banking Agencies:
,1.The Board of Governors of the Federal Reserve System
2. The Comptroller of the Currency
3. The National Credit Union Administraton
(NCUA)
4. The Federal Deposit Insurance Corporation
(FDIC)
Regulation G of the SAFE Act establishes
A federal registration requirement for mortgage loan originators.
Regulation "H" authorizes:
The CFPB to implement the Secure and Fair Enforcement for Mortgage Licensing Act of
2008. It also directs the states to adopt minimum uniform standards for licensing &
registration of residential mortgage loan originators.
All loan originators must be licensed through or registered with:
NMLSR
Nov. 1st through Dec. 31st of each year...
Registered MLOs must renew their registration during
Non-traditional Mortgage Product
Any mortgage product other than a 30 year fixed rate mortgage.
Residential Mortgage Loan
Any loan primarily for personal, family, or household use that is secured by a mortgage,
deed of trust, or other equivalent consensual security interest on a dwelling or
residential real estate upon which a dwelling is constructed or intended to be
constructed.
Federally Registered Loan Originator
Is an individual who meets the definition of a loan originator and is an employee of a
depository institution that is regulated by a federal banking agency.
Mortgage Loan Originator
Person who takes a residential mortgage loan application.
Permanently Identifies Loan Originator
Unique Identifier
Stable Income
A borrower's gross monthly income from all verifiable sources that can reasonably be
expected to continue for at least 3 years.
Credit Score
An overall assessment that predicts a borrower's credit risk.
Employee Income
A borrower's base pay/regular wages.
Hard Inquiry
Appears on a consumer's credit report and can influence their credit score.
Soft Inquiry
Does not appear on credit report or impact consumer's credit score.
Exceptions to the 2 year employment history requirement
School and military
, "4 R" model used to determine the borrower's monthly income. Are the
employment & income considered:
Regular (earned on consistent basis), Recurring (weekly, bi-weekly), Received in cash
(W-2, Tax return or Bank Statement), Reasonable (is income inline or realistic for
occupation?)
Credit Scoring was first developed in
The 1950's
The "Three C's of Underwriting"
Credit Reputation, Capacity and Collateral
Collateral
Borrower's total equity or down payment.
Form 1003
Is completed twice during loan application. First time is generally referred to as "initial
1003...at time of application.
Credit worthiness
Often determined from the applicant's credit history and experience regarding
repayment of loans & use of revolving credit such as credit cards.
The most critical lending component is
Establishing suitability...matching a borrower with a loan that they are able to repay.
Lender's use qualifying ______ to determine if a borrower can qualify for a
mortgage.
Ratios
Liquid Assets
are cash and items that can be quickly converted to cash
FICO
Credit score...ranging from 350 to 850 points
How may an RLMO accept a residential loan application?
Via internet, over the phone & face to face.
Interim Interest
Principal x Payment Rate divided by 360 or 365 days x number of days until end of
month.
Simple Interest
principal x rate x time
Percentage
Means per 100 or per 100 parts. It also means rate.
Basis Point
Equal to 1/100th of 1%
Combined loan-to-value
Calculated when a borrower finances two or more mortgage loans on a property.
Loan to Value (LTV)
Is calculated by dividing the amount of the loan by the LOWER of the appraised value
or sales price.
Home Equity Line of Credit (HELOC).
Line of credit based on equity in home.
PITI
Principal, Interest, Taxes, Insurance
