Maryland Exam

The Finder's Fee Law sets specific limits on the amount of compensation that can be earned by which of the following in a mortgage loan transaction?

mortgage lenders

underwriters

loan processors

mortgage brokers

mortgage brokers

which agency has argued that markups made by and for the benefit of a single party are in violation of RESPA's prohibition against fee splitting?

Congress

FHA

Consumer Financial Protection Bureau

HUD

x

HUD

The Department of Housing and Urban Development has been at odds with the mortgage industry, taking the side of the consumer.

Even though Maryland is within a federal judicial district that does not find markups to be illegal, regulations promulgated by the Office of the Commissioner of Financial Regulation PROHIBITS THEM.

The regulations state the licensees may not retain a fee, or any portion of a fee, collected from a borrower if that fee is represented as a third-party charge

Mortgage brokers must provide a signed and dated copy of the agreement to a loan applicant within how many days after completion of a loan application?

three business days

three days

ten business days

five business days

x

within 10 business days

The disclosure required by the Finder's Fee Law must state the fact that the broker is acting as a broker and not as a:

dual agent

table-funder

underwriter

lender

x

lender

This occurs when one settlement service provider increases the fee charged by another settlement service provider and retains the additional fees.

transactional increase

up-charge

inflation

price increase

up-charge

The Maryland Mortgage Originator Law specifies that the Commissioner cannot use any of the following as the sole reason for finding an individual applicant unable to meet financial responsibility standards for licensure, except:

Judgements for medical debts

Involvement for Chapter 11 bankruptcy proceeding

Judgements for unpaid child support

Foreclosures on the applicants principal residence

judgements for unpaid child support

Under the Maryland Mortgage Lender Law and the Mortgage Originator Law, the Commissioner of Financial Regulation has the authority to do all but which of the following?

access, receive, and use company books in an investigation of a license

decide on jail terms for violations of the law

assess a fine up tp $5,000

conduct investigations and examinations

decide in jail terms for violations of the law

RESPA specifically prohibits persons from giving or receiving which of the following for a referral?

thank you note

reference

things of value

specialized forms

things of value

What is the maximum prepayment penalty that a creditor in the state of Maryland may impose?

Up to 5% of the unpaid principal balance

up to 2% of the unpaid principal balance

up to 1% of the unpaid principal balance

creditors are prohibited form imposing any prepayment charge or penalty in Maryland

prepayment penalties and charges in any form are prohibited under Maryland Law

Several sections of the Maryland Code addresses repayment ability. In order to determine a borrower's ability to repay a mortgage loan, all of the following are considered, except:

gross monthly income

gross monthly assets

debt-to-income ratio

tax bracket

tax bracket

Mortgage lenders who file five or more applications for licensure of multiple branch offices at the same time may obtain a blanket surety bond of $(blank) with approval form the Department of Financial Regulation.

$100,000

$250,000

$500,000

$750,000

x

$750,000

The Finder's Fee Law is used to discourage mortgage brokers from encouraging consumers to do which of the following?

obtain a second mortgage

refinance mortgage loans repeatedly within a short period of time

use a preferred lender

purchase homes with jumbo mortgages

refinance loans repeatedly within a short period of time

An individual is not eligible for licensure as a loan originator if he or she has been convicted of a felony within (blank) years preceding application for licensure.

seven years

ten years

15 years

20 years

7 years

Under Maryland Law, a mortgage loan originator is required to complete (blank) hour(s) of federal law as a part of annual continuing education.

nine

eight

three

one

three

8 hours in total (I believe)

a mortgage originator is required to wait (blank) after failing a third a attempt on a licensing exam

at least three months

at least 30 days

no more than 180 days

a minimum of 180 days

a minimum of 180 days

*A lender offering to make a loan is required to provide a fully-executed financing agreement to the borrower, which must include all of the following, except:

a statement that the lender may not collect fees other than those listed in the agreement

the term during which the agreement is in effect

an explanation of the loan type offered

the principal amount and terms of the loan

a statement that the lender may not collect fees other than those listed in the agreement

*Maryland's Mortgage Originator Law authorizes the Commissioner to deny a license application for any of the following reasons, except:

passage of the National and Uniform State Test components

a felony conviction three years prior to application

failure to satisfy the surety bond requirement

a loan originator license revocation in another state

passage of the National Uniform State Test components

Why would revocation of a license in another state prevent licensure in Maryland?

*Which of the following statements, if included in a borrower agreement under the Finder's Fee Law, would most likely be acceptable under Maryland Law?

"We will charge an origination fee ranging from $2,000 to $2,5000"

"We are acting in the capacity of a broker, not a lender, and will charge $1,800 fee due at settlement for loan origination services."

"We charge broker fees up to $2,800 for origination services"

"We are acting in the capacity of a broker, not a lender, and will charge a fee not to exceed $1,500 at settlement for our services."

x

"We are acting in the capacity of a broker, not a lender, and will charge $1,800 fee due at settlement for loan origination services."

Why, though?

According to the Maryland Mortgage Lender Law, originators must meet all of the following requirements prior to being licensed, except:

completion of education requirements

proof of employment

Letter of recommendation form previous employer

Fingerprints and background check

letter of recommendation from previous employer

The Finder's Fee Law prohibits the collection of a finder's fee by an entity simultaneously acting as a broker and a(n):

lender

attorney

underwriter

broker's agent

lender

A mortgage broker recommends a refinance transaction for a borrower. The transaction will result in a lower interest rate and a shorter amortization schedule for the borrower. The broker has:

offered a tangible net benefit

offered to act as the borrower's agent

made a fiduciary decision

made a good business decision

offered a tangible net benefit

The statute of limitations for an action under Maryland's Finder's Fee Law is:

five years

there is not statute of limitations under the Finder's Fee Law

twelve years

ten years

x

twelve years

*Which of the following would not be grounds for denial of a mortgage loan originator license application?

a previous license revocation

failure to be covered by a surety bond

a conviction of a felony five years ago

failure to maintain minimum net worth requirement

x

failure to maintain a minimum net worth.

Why?

Which if the following is responsible for making licensing decisions in the State of Maryland?

NMLS

the Commissioner of Financial Regulation

The Attorney General of the State of Maryland

the Governor

the Commissioner of Financial Regulation

Maryland law allows for a lender to charge any effective rate of simple interest on the unpaid principal balance of a loan, as long as it meets certain requirements, including all but which of the following?

the loan is secured by a fist mortgage or deed of trust on a residential property

the lender does not require more than two advance payments of interest

the loan is made and the mortgage deed of trust is executed after June 1st, 2013

The loan does not include any prepayment penalty

x

The loan does not include a prepayment penalty

A borrower submits a completed application for credit to a lender. The lender denies the application for credit. Within how many days must the applicant make a request for a statement of reasons for the denial?

45 days

60 days

15 days

30 days

60 days

The Finder's Fee Law limits the amount of the compensation or commission that a broker may charge to a borrower to which of the following?

The Finder's Fee Law does not limit the amount of compensation

10% of the loan amount

12% of the loan amount

8% of the loan amount

8% of the loan amount

If a broker violates the Finder's Fee Law, the broker may have to pay which of the following penalties?

three times the amount of the fee that the broker collected from the borrower

only $500

The fee that the broker collected, plus $500

five times the amount of the fee that the broker collected

three times the amount of the collected fee

If a lender willfully misappropriates borrower funds in an amount over $300 for its own use is guilty of:

a felony

a gross misdemeanor

nothing; the amount must be at least $500 to qualify as a criminal act

a misdemeanor

a felony

Other than recession, when may a borrower be eligible for a refund of compensation paid to a mortgage broker?

when the loan does not close

a refund is only available as a result of rescission

when the loan is paid off before the end of its amortization schedule

when the borrower makes a written request for a refund

when the loan does not close

*A mortgage broker must advise a loan applicant oh his or her right to which of the following if he or she obtains a loan but exercises the right to rescind it?

to apply for another loan

explore other brokers

request a credit report

a refund of a finder's fee

x

a refund of a finder's fee (not completely sure)

Under the Finder's Fee Law, the broker agreement provided to loan applicants must:

be provided at closing

be repeated twice if presented orally

be notarized

be in writing and separate from the other disclosures

be in writing and separate from other disclosures

If the Commissioner suspects or determines that a mortgage broker has violated the Finder's Fee Law, he or she can perform all of the following actions, except:

incarcerate the broker in federal prison

issue cease and desist orders

conduct investigations

issue penalties

incarcerate the broker in federal prison

An act of mortgage fraud committed against which of the following will increase fines/and or terms of imprisonment?

vulnerable adults

employees of a regulatory agency

immediate family

lenders

vulnerable adults

which of the following licenses types is generally offered to entities, rather than individuals?

mortgage broker

mortgage loan originator

loan processor

mortgage lender

mortgage lender

Maryland licenses that are not renewed according to provisions of the licensing law expire on:

July 1st

December 31st

June 15th

December 1st

December 31st

*Under the Maryland Mortgage Lender Law, the term "mortgage broker" is used to draw a distinction between lenders who fund loans and brokers who:

service loans

are sole proprietors

fund loans

provide table-funding for loans

x

provide table-funding for loans

Which of the following terms refer to the yield to maturity rate of interest received by a lender on the face amount of a loan?

effective rate of simple interest

interest

usury

stated rate of interest

x

effective rate of simple interest

The Finder's Fee Law applies to which of the following?

all mortgage lending transactions

commercial loans

all mortgage lending transactions except for reverse mortgages and secondary mortgage transactions

only first lien mortgage transactions

all mortgage lending transactions

Maryland's Finder's Fee Law has been included in the Maryland Code since what year?

1999

1979

1985

1965

1979

All fines and penalties that the Commissioner collects under the law are paid into the:

Mortgage Recovery Fund

Penalty Collection Fund

Nondepository Special Fund

Commissioner's Fund

Nondepository Special Fund

(blank) is the evaluation of information and materials about the loan, the applicant, and the property that will secure the loan to determine whether is loan will be made or denied.

underwriting

servicing

table-funding

brokering

underwriting

Businesses entities that function as mortgage lenders, brokers, and servicers must secure a

mortgage lender license

whether a business functions as a lender, broker, servicer, or any combination of the three, it must obtain a lender license