NMLS EXAM

What law deals with credit, APR & advertising of consumer loans?

TILA/REGULATION Z

Which regulation prohibits kickbacks?

RESPA

Which regulations requires the lender to cancel PMI when the loan reaches 78% LTV?

HPA - Homeowners Protection Act

Which regulation prohibits fee splitting?

RESPA

Regulation X is the letter used to describe which Law?

RESPA

RESPA is the acronym used to describe which law?

Real Estate Settlement Procedures Act

What type of mortgage requires a non-refundable funding fee?

VA Loan

What is the provision in a mortgage enabling a lender to demand full repayment if the borrower DEFAULTS on the loan?

Acceleration Clause

What is the provision in a mortgage enabling a lender to demand full repayment if the borrower TRANSFERS the loan?

Alienation Clause

What does CFPB stand for?

Consumer Financial Protection Bureau

What two laws created the CFBP?

Dodd Frank Act and Consumer Finance Protection Act

Which regulations is designed to help meet the Credit Needs of the Communities in which it operates?

CRA - Community Reinvestment Act

Under ECOA rules and regulations, how many days does the borrower have to request a copy of an appraisal report?

90

Under ECOA rules and regulations, how many days does the lender have to provide a copy of an appraisal report, once requested by the borrower?

30

If a loan application is APPROVED, Under ECOA rules and regulations, when MUST a copy of the appraisal be provided to the borrower?

3 business days

Conforming Loans follow the guidelines of which regulators?

Fannie Mae and Freddie Mac

Which regulation requires the lenders to "BE EQUAL" when extending credit to borrowers?

ECOA - Regulation B

How old must a borrower be to qualify for a Reverse Mortgage?

62 years old

Which regulation has the primary function of preventing Identity Theft?

FACT Act

Which regulation has SECTION 114 Rules?

FACT Act

Which regulation requires the creditor to verify the VALIDITY of any change of address received?

SECTION 114 of the FACT Act

What is the payment method used in a reverse mortgage that allows the homeowners to receive a monthly check while living in the property?

TENURE Method

What is the fraud scheme where a borrower uses someone else's name to purchase the property, but that person WILL NOT be living at the property?

Straw Borrower

What government lender "insures" mortgages"?

FHA

What government lender "guarantees" mortgages?

VA Loans

What government lender loans money to fund purchases in rural areas?

USDA/Dept. of Argriculture

What is the value remaining in property after all liens and debts have been paid?

Equity

A borrower is refinancing his home. How much time does Reg Z give him to change his mind?

3 days

Which Regulation established the 3-day right of recession rule?

TILA/REG Z

Redlining is part of which regulation/Law?

Fair Housing Act

Blockbusting is part of which regulation/Law?

Fair Housing Act

Steering is part of which regulation/Law?

Fair Housing Act

Trying to convince a homeowner to SELL his home by implying that another race/ethnicity is moving in the neighborhood is called?

Blockbusting/panic selling

Trying to convince a homeowner to PURCHASE in a particular neighborhood based on his race, religion or ethnicity is called?

STEERING

Refusing to make loans on a property in a certain neighborhood for discriminatory reasons is called?

Redlining

What does HOEPA stand for?

Home Ownership and Equity Protection Act

HOEPA Loans are part of which larger regulation?

Reg Z/Tila

High Cost Loans are part of which larger regulation?

Reg Z/Tila

High Priced Loans are part of which larger regulation?

Reg Z/Tila

Section 32 Loans are part of which larger regulation?

Reg Z/Tila

Section 35 Loans are part of which larger regulation?

Reg Z/Tila

MDIA ACT is part of which larger regulation?

Reg Z/Tila

Mortgage Disclosure Improvement Act is part of which larger regulation?

Reg Z/Tila

What is another name for Annual Percentage Rate?

Effective Rate

What is another name for Interest Rate?

Note Rate or Nominal Rate

PITI divided by Gross Monthly income is referred to as what?

Housing Ratio or Front-End DTI

PITI + monthly debt divided by Gross Monthly income is referred to as what?

Total Obligation Ration - Back-end Ratio

How long must TILA Disclosures be kept?

2 years for general TILA disclosure 3

3 years for the Loan Estimate

5 years for the Closing disclosure

What is the maximum amount of time that NEGATIVE info can remain on a credit report?

7 years

What is the maximum amount of time that a bankruptcy can remain on a credit report?

10 years

Which law/regulations states that a Bankruptcy can only remain on your credit for a MAX of 10 years?

FCRA - Fair Credit Reporting Act - Reg V

Which law/regulations states that negative information can only remain on your credit for a MAX of 7 years?

FCRA - Fair Credit Reporting Act - Reg V

Which law allows a consumer who has had her credit card used by an identity thief to place a credit freeze on her credit report?

FACT ACT

Which law requires creditors to TRUNCATE debit and credit card info on receipts?

FACT ACT

Which regulation states that loan officers secure and dispose of borrower's sensitive credit information?

FACT ACT

Which regulation states that if a borrower is denied credit, he can receive a FREE copy of his credit report?

FCRA - Fair Credit Reporting Act REG V

Which regulation states that if a borrower is unemployed, he can receive a FREE copy of his credit report?

FCRA - Fair Credit Reporting Act - Reg V

Which regulation states that if a borrower is on SSI or Disability, he can receive a FREE copy of his credit report?

FCRA - Fair Credit Reporting Act - Reg V

Which regulation states that if a borrower has been the victim of fraud, he can receive a FREE copy of his credit report?

FCRA - Fair Credit Reporting Act - Reg V

Which regulation states that a borrower can receive a FREE copy of his credit report once a year?

FACT Act

During the loan process, if you ask a a borrower "Are you single . . . ." What law are you violating?

ECOA - Regulation B

Which regulation states that the only correct way to ask about a borrower's marital status is: are you married, unmarried or separated?

ECOA - Regulation B

Who is responsible for providing the closing disclosure to the borrower?

The Creditor/Lender

Who is responsible for providing the closing disclosure to the seller?

Settlement Agent/Title Agent

Which regulation requires the borrower to receive the Loan Estimate?

TILA - Reg Z

Which regulation requires the homeowner to receive the Closing Disclosure?

TILA - Reg Z

Which regulation requires the borrower to receive the Loan Estimate within 3 business days?

RESPA - Regulation X

Which regulation requires the borrower to receive the Closing Disclosure within 3 business days?

RESPA - Regulation X

As it relates to the initial loan estimate - what is the definition of a Business day?

Any day that the Creditor's office is open for business

According to TILA/REG Z - what is the definition of a Business day?

Any calendar day except for Sunday and Legal Holiday

(Remember - if referring to the LOAN ESTIMATE - any day the Creditor's office is open for business)

During the loan process, where do you find HMDA government monitoring information?

Section X of the 1003 application

What does HDMA stand for?

Home Mortgage Disclosure Act

What appraisal approach is used when appraising property that has been destroyed by a natural disaster?

Cost Approach or replacement cost approach

In the sales comparison approach, how many comps are required?

3

What is another name for the Financial Services Modernization Act of 1999?

Graham Leach Bliley Act

How many days does a CREDITOR have to notify a consumer of the status of a credit application?

30 days

Which regulation states that a creditor has 30 days to notify a consumer of an application approval or denial?

ECOA - REG B

How many hours of Ethics is required to be taught in the 20hr Pre-licensing course?

3

How many hours of Ethics is required to be taught in the 8hr Continuing Education course?

2

How many hours of Federal Law is required to be taught in the 20hr Pre-licensing course?

3

How many hours of Federal Law is required to be taught in the 8hr Continuing Education course?

3

A mortgage that includes more than one parcel of land is called what?

Wraparound morgtage

A mortgage that includes appliances such as a stove or refrigerator is called what?

Package Mortgage

Which closing document itemizes the final closing cost and items paid in connection with the loan for the borrower?

Closing Disclosure

Which law deals with APR and Advertising of credit terms?

TILA - REG Z

What is the official name for the 3/7/3 rule?

Mortgage Disclosure Improvement Act or MDIA ACT

What regulations require the lender to perform an escrow analysis?

RESPA Section 10

Which law states that it is a violation to discriminate against a potential borrower on public assistance?

ECOA - REG B

What two classes are protected under Fair Housing Act- but NOT under ECOA?

Disability/Handicap & Familial Status

What three classes are protected under ECOA but NOT under Fair Housing?

Age; Marital Status, and Public Assistance

What is another name for a non-confirming loan?

Jumbo Loan

What is another name for a Jumbo Loan?

Non Conforming Loan

The front Ratio for an FHA loans is 31%... what is the back ratio?

43%

The front Ratio for a Convention loans is 28%.. what is the back ratio?

36%

The Ratio for a VA loan is?

41%

What is another name for the Bank Secrecy Act?

The anti-money laundering act

What is another name for the Anti-Money Laundering Act?

Bank Secrecy Act