Session9 E X A M I N A T I O N P R E P NMLS - Mortgage
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Session9 E X A M I N A T I O N P R E P NMLS - Mortgage

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    Session9 E X A M I N A T I O N P R E P NMLS - Mortgage Session9 E X A M I N A T I O N P R E P NMLS - Mortgage Presentation Transcript

    • MORTGAGE LOAN ORIGINATOR EXAM PREPARATION YOU MUST USE YOUR TELEPHONE TO HEAR THE PRESENTATION. DIAL INTO THE NUMBER ON THE RIGHT AND LOOK FOR YOUR PIN CODE
    • MORTGAGE LOAN ORIGINATOR EXAM PREPARATION PRESENTED BY MITCHEL MEDIGOVICH, CMC INSTITUTE OF MORTGAGE AND REAL ESTATE EDUCATION, INC.
    • OVER VIEW OF GROUP STUDY
      • Discussion of the exam process
      • Weighting of exams
      • Strategies
      • National Exam Topics
      • State Exam Topics
      • Practice Questions
    • THE EXAM PROCESS
    • THE EXAM PROCESS
      • Register on line with NMLS
        • Pay for two exams, national and Arizona
        • Total Cost $161
      • Make two appointments
        • National exam
        • Arizona exam
    • THE EXAM PROCESS
      • Do not take –
        • Purse
        • Wallet
        • Money
        • Pens
        • Keys
        • Computer or calculator
        • PDA
    • THE EXAM PROCESS
      • Take with you
        • Government issued picture ID
        • Your registration confirmation
      • Relax
    • QUESTIONS AND TIMING
      • National component
        • 150 minutes
          • 100 questions
          • 90 are used for scoring
      • Arizona
        • 90 minutes
          • 50-60 questions
          • 50 used for scoring
    • SUBJECT MATTER WEIGHTING OF EXAMS
    • THE NATIONAL EXAM
      • WEIGHTING
      • Federal Mortgage Related Laws 35%
      • General Mortgage Knowledge 25%
      • Mortgage Loan Origination Activities 25%
      • Ethics 15%
    • THE STATE EXAM WEIGHTING
      • Dept. of Financial Institutions 5%
      • State Law & Regulation Definitions 10%
      • License Law & Regulations 20%
      • Compliance 50%
      • Disciplinary Action 10%
      • Arizona Unique State Test Areas 5%
    • STRATEGIES
    • Strategies
      • For multiple choice exams
        • 1 out of 4 potential answers
        • Typically 2 answers are possible
        • Eliminate that which you know is incorrect
        • Do not “over think” the question
        • Do not “read between the lines”
    • Strategies
      • Stick with your first choice
        • Changing answers is often wrong
      • Take your time to read the entire question
      • Read every answer
    • Study Tips
      • What is the purpose of a law
      • Whom does it cover
      • What is a covered transaction
      • What is an uncovered transaction
      • What is required of a lender
    • NATIONAL EXAM TOPICS
    • Truth in Lending Act
      • The Truth In Lending Act regulates which of the following loan transactions:
      • All owner occupied properties
      • All rental properties of four or more units
      • Only those consumer related transactions above the Average Prime Offered Rate
      • Loans on any dwelling
    • Truth in Lending Act
      • The Truth In Lending Act regulates which of the following loan transactions:
      • All owner occupied properties
      • All rental properties of four or more units
      • Only those consumer related transactions above the Average Prime Offered Rate
      • Loans on any dwelling
        • Amount of payments, interest rate, and loan amount only
        • Amount of interest, late charges and recording fees only
        • Annual percentage rate, total of payments amount financed and finance charges
        • Sale price of a property, down payment, and terms of the loan
      Truth In Lending is intended to provide borrower’s what information
        • Amount of payments, interest rate, and loan amount only
        • Amount of interest, late charges and recording fees only
        • Annual percentage rate, total of payments amount financed and finance charges
        • Sale price of a property, down payment, and terms of the loan
      Truth In Lending is intended to provide borrower’s what information
      • The total interest the borrower will pay over the note rate
      • The total cost of borrowing money including pre paid finance charges the borrower will pay, expressed as a percentage rate
      • Only the pre paid finance charges the borrower will pay, expressed as an interest rate
      • Pre paid finance charges and non prepaid finance charges the borrower will pay over the life of the loan
      The term Annual Percentage Rate most nearly means:
      • The total interest the borrower will pay over the note rate
      • The total cost of borrowing money including pre paid finance charges the borrower will pay, expressed as a percentage rate
      • Only the pre paid finance charges the borrower will pay, expressed as an interest rate
      • Pre paid finance charges and non prepaid finance charges the borrower will pay over the life of the loan
      The term Annual Percentage Rate most nearly means:
      • Origination fees
      • Processing fees
      • Flood certification fees
      • Administration fees
      Prepaid finance charges are all of the following except
      • Origination fees
      • Processing fees
      • Flood certification fees
      • Administration fees
      Prepaid finance charges are all of the following except
    • Equal Credit Opportunity Act
      • Requires lenders to treat all borrowers equally
      • Prohibits asking about:
        • Child bearing plans or practices
        • Whether borrower is widowed or divorced
    • The Equal Credit Opportunity Act permits a lender to:
      • Ask the borrowers age
      • Deny credit if a borrower is on public assistance
      • Require a borrower to use their married name
      • Deny a borrower the right to know why a loan was denied
    • The Equal Credit Opportunity Act permits a lender to:
      • Ask the borrowers age
      • Deny credit if a borrower is on public assistance
      • Require a borrower to use their married name
      • Deny a borrower the right to know why a loan was denied
    • The Equal Credit Opportunity Act prohibits a lender from:
      • Allowing co-borrowers or guarantors on a loan
      • Allowing a co-borrower that is not a spouse
      • Requiring a borrower to use their married name
      • Deny a borrower the right to know why a loan was denied
    • The Equal Credit Opportunity Act prohibits a lender from:
      • Allowing co-borrowers or guarantors on a loan
      • Allowing a co-borrower that is not a spouse
      • Requiring a borrower to use their married name
      • Deny a borrower the right to know why a loan was denied
    • Real Estate Settlement Procedures Act
      • Provides uniform disclosure of costs
      • Provides uniform settlement statements
      • Prohibits Kickbacks
        • Land title record keeping
        • Disclosures for land transactions greater than 25 acres
        • Subdivision reports
        • Water rights on vacant land
      RESPA regulates disclosures for loan costs and
        • Land title record keeping
        • Disclosures for land transactions greater than 25 acres
        • Subdivision reports
        • Water rights on vacant land
      RESPA regulates disclosures for loan costs and
      • The agent
      • The mortgage broker
      • The borrower
      • The loan originator
      Effective January 1, 2010 according to RESPA if the interest rate on the loan is sufficient to create a premium who may receive the premium?
      • The agent
      • The mortgage broker
      • The borrower
      • The loan originator
      Effective January 1, 2010 according to RESPA if the interest rate on the loan is sufficient to create a premium who may receive the premium?
    • Which law regulates the amount of funds a lender may collect for the impound account?
      • RESPA
      • TILA
      • HMDA
      • MIDA
    • Which law regulates the amount of funds a lender may collect for the impound account?
      • RESPA
      • TILA
      • HMDA
      • MIDA
    • Home Ownership and Equity Protection Act
      • Known as HOEPA – Section 226.32 of TILA
      • Requires additional disclosures in covered transactions
      • Measured by “triggers”
      • 150 basis points above the trigger
      • 350 basis points above the trigger
      • 800 basis points above the trigger
      • 10% greater than the trigger
      If a Lender makes a first lien HOEPA loan, the APR is most likely more than
      • 150 basis points above the trigger
      • 350 basis points above the trigger
      • 800 basis points above the trigger
      • 10% greater than the trigger
      If a Lender makes a first lien HOEPA loan, the APR is most likely more than
        • 150
        • 250
        • 350
        • 450
      In 2008, Regulation Z created a new protected class of borrowers. The Higher Priced Mortgage Act (HPM) established a threshold for second liens of how many basis points above the index:
        • 150
        • 250
        • 350
        • 450
      In 2008, Regulation Z created a new protected class of borrowers. The Higher Priced Mortgage Act (HPM) established a threshold for second liens of how many basis points above the index:
    • Home Mortgage Disclosure Act
      • Requires lenders to disclose whom they make loans to
      • Allows the public to review lending practices of a bank, mortgage banker, savings and loan, credit union
    • HMDA requires lenders report the following information on loans made
      • Only new home purchases
      • Only new home purchases and refinances
      • New home purchases, refinances and improvement loans
      • Only refinances and improvement loans
    • HMDA requires lenders report the following information on loans made
      • Only new home purchases
      • Only new home purchases and refinances
      • New home purchases, refinances and improvement loans
      • Only refinances and improvement loans
    • HMDA requires lenders report the following information on loans made
      • Age and race of a borrower
      • Age, race, gender and income of a borrower
      • Sex, age, gender, marital status of a borrower
      • Race, gender, income, loan type, disposition
    • HMDA requires lenders report the following information on loans made
      • Age and race of a borrower
      • Age, race, gender and income of a borrower
      • Sex, age, gender, marital status of a borrower
      • Race, gender, income, loan type, disposition
    • Depository Institutions Deregulation and Monetary Control Act
      • Signed by President Carter in 1980
      • Lifted regulations for deposit rates
      • Permitted certain institutions to venture in to other loan and investment types
        • Community Banks
        • Savings and Loan Associations
        • The Federal Home Loan Bank Board
        • Credit Unions
      One of the effects of the Depository Institutions and Deregulation Act was to authorize which institutions to invest up to 20% of their assets in consumer loans, commercial paper and debt securities:
        • Community Banks
        • Savings and Loan Associations
        • The Federal Home Loan Bank Board
        • Credit Unions
      One of the effects of the Depository Institutions and Deregulation Act was to authorize which institutions to invest up to 20% of their assets in consumer loans, commercial paper and debt securities:
        • The same for Community Banks and Savings and Loan Association
        • Higher for Savings and Loan Associations
        • Controlled by The Federal Home Loan Bank Board
        • Higher for Credit Unions and National Banks
      Prior to passage of the Depository Institutions Deregulation Act the interest rate paid to depositor was:
        • The same for Community Banks and Savings and Loan Association
        • Higher for Savings and Loan Associations
        • Controlled by The Federal Home Loan Bank Board
        • Higher for Credit Unions and National Banks
      Prior to passage of the Depository Institutions Deregulation Act the interest rate paid to depositors was:
    • Alternative Mortgage Transaction Parity Act
      • Lifted regulation on Savings and Loan Industry and state banks
      • Permitted state banks to engage in alternate loan programs
        • ARM
        • Negative Amortized loans
    • Prior to the passage of The Alternative Mortgage Transaction Parity Act Savings and Loan Institutions were permitted to engage in only the following:
      • Home and construction loans
      • Any loans secured by real estate
      • Commercial loans in their immediate community
      • Variable rate mortgages
    • Prior to the passage of The Alternative Mortgage Transaction Parity Act Savings and Loan Institutions were permitted to engage in only the following:
      • Home and construction loans
      • Any loans secured by real estate
      • Commercial loans in their immediate community
      • Variable rate mortgages
    • Equal Opportunity Credit Act
      • Prohibits a lender from declining a loan on the basis of the borrowers:
        • Sex
        • National origin
        • Religion
        • Marital status
        • Age
    • A lender may deny a borrower a loan on the basis of all of the following except:
      • The borrower is on public assistance
      • The borrower does not have tax returns to support income
      • The borrower has obtained a loan for the down payment
      • The borrower has changed employers more than once in two years
    • A lender may deny a borrower a loan on the basis of all of the following except:
      • The borrower is on public assistance
      • The borrower does not have tax returns to support income
      • The borrower has obtained a loan for the down payment
      • The borrower has changed employers more than once in two years
    • A lender may deny a borrower a loan if :
      • The borrower is subject to the draft
      • The borrower is under 21 yeas of age
      • The borrower is working in a combat zone
      • The borrower is over 62 years of age and is expected to retire within 1 year
    • A lender may deny a borrower a loan if :
      • The borrower is under 21 yeas of age
      • The borrower is subject to the draft
      • The borrower is working in a combat zone
      • The borrower is over 62 years of age and is expected to retire within 1 year
    • The Fair Housing Act
      • Title VIII of the Civil Rights Act of 1968 which prohibits housing discrimination on the basis of
      • Race
      • Color
      • Religion
      • National origin
      • Sex
      • Handicap
      • Familial Status
    • The term Red Lining most nearly means?
      • Making loans only in the highest income areas
      • Making loans only in the lowest income areas
      • Complying with CRA (Community Reinvestment Act)
      • Refusing to make loans in economically depressed areas
    • The term Red Lining most nearly means?
      • Making loans only in the highest income areas
      • Making loans only in the lowest income areas
      • Complying with CRA (Community Reinvestment Act)
      • Refusing to make loans in economically depressed areas
    • SAFE Act
      • Requires registration of Mortgage Loan Originators
      • Each MLO will have a national identification number
      • Requires 20 hours of pre-licensing education
    • The SAFE Act requires every mortgage loan originator employed by a national bank to attend the following courses:
      • Ethics
      • Underwriting
      • Federal Law
      • None of the above
    • The SAFE Act requires every mortgage loan originator employed by a national bank to attend the following courses:
      • Ethics
      • Underwriting
      • Federal Law
      • None of the above
    • The SAFE Act requires how many hours of Federal Law
      • 2
      • 4
      • 3
      • 8
    • The SAFE Act requires how many hours of Federal Law for pre-licensing education
      • 2
      • 3
      • 6
      • 8
    • Fair Credit Reporting Act
      • The purpose of the act is to:
      • Require that consumer reporting agencies adopt procedures for meeting the needs of commerce
      • For consumer credit and insurance,
      • Which is fair and equitable to the consumer and is
      • Confidential and accurate
    • Pursuant to the Fair Credit Reporting Act a lender may obtain a credit report if the borrower provides:
      • Written permission only
      • Oral or written permission
      • A lender does not need permission if the borrower completes an application
      • Oral, written or other electronic delivery of permission
    • Pursuant to the Fair Credit Reporting Act a lender may obtain a credit report if the borrower provides:
      • Written permission only
      • Oral or written permission
      • A lender does not need permission if the borrower completes an application
      • Oral, written or other electronic delivery of permission
    • A credit report may be used for the following purposes
      • For employment purposes
      • For a loan request
      • By an insurance company
      • All of the above
    • A credit report may be used for the following purposes
      • For employment purposes
      • For a loan request
      • By an insurance company
      • All of the above
    • If a consumer is denied a loan or employment based on information contained in a credit report
      • The consumer does not have a right to the report held by the lender/employer
      • The consumer may request a free copy from the credit reporting agency within 3 business days
      • The lender must pay for a credit report
      • All of the above
    • If a consumer is denied a loan or employment based on information contained in a credit report
      • The consumer does not have a right to the report held by the lender/employer
      • The consumer may request a free copy from the credit reporting agency within 3 business days
      • The lender must pay for a credit report
      • All of the above
    • A credit reporting agency must exclude the following information from a consumers report
      • Bankruptcy information greater than 10 years old
      • Civil suits and judgments greater than 10 years old
      • Collections and paid tax liens greater than 7 years old
      • All of the above
    • A credit reporting agency must exclude the following information from a consumers report
      • Bankruptcy information greater than 10 years old
      • Civil suits and judgments greater than 10 years old
      • Collections and paid tax liens greater than 7 years old
      • All of the above
    • Privacy Act (Do Not Call)
      • Regulated by the Federal Trade Commission
      • Established a registry for consumers who do not wish to have sales calls
      • The Privacy Act requires agencies to send a written acknowledgment not later than 10 days after an individual submits a request to …delete a record from the system.  See  5 U.S.C. 552a(d)(2)(A)
    • Fair and Accurate Credit Transaction Act
      • Establishes three sets of requirements
        • For users of credit reports
        • For all financial institutions that arrange credit
        • For credit card issuers
      • Requires financial institutions and creditors to develop and implement written identity theft prevention programs
    • FHA Loans
      • Developed after the depression
      • Created a mortgage insurance program
      • Protects lenders (and depositors) in the event of mortgage loan default
      • Establishes loan limits by area
    • FHA Mortgage Insurance
      • Up Front Mortgage Insurance (UFMIP) – 1.75%
      • Monthly mortgage insurance is .55% when loan term is greater then 15 years
    • FHA Mortgage Insurance
      • Monthly mortgage insurance is .25% when loan term is 15 years or less
      • Monthly MI will be paid until the loan reaches 78% with a minimum of 5 years
    • FHA LOANS - OCCUPANCY
      • Borrower is required to occupy property as primary residence within 60 days from COE & intend to continuously occupy property for 12 months
      • Exceptions:
        • Streamline refinances without appraisal
        • 203K (Rehab Loans)
        • HUD Repossessed Homes
    • Mortgage Insurance for FHA loans requires the borrower to pay how much down payment from their own funds?
      • 1.5% plus closing costs
      • 2.5% and no closing costs
      • 3.5% with or without closing costs
      • 5% with seller contribution
    • Mortgage Insurance for FHA loans requires the borrower to pay how much down payment from their own funds?
      • 1.5% plus closing costs
      • 2.5% and no closing costs
      • 3.5% with or without closing costs
      • 5% with seller contribution
    • What is the maximum financing concession for an FHA loan?
      • 6% of the Loan Amount
      • 5% of the Base Loan Amount
      • 6% of the Sales Price
      • Depends on the LTV
    • What is the maximum financing concession for an FHA loan?
      • 6% of the Loan Amount
      • 5% of the Base Loan Amount
      • 6% of the Sales Price
      • Depends on the LTV
    • Appraisals
      • Appraisers licensed in each state
      • Uniform Standards of Appraisal Practice (USPAP) required after 1989 when FIRREA was passed
      • Discussion of the three methods of valuation
        • To protect the public from bad lenders
        • To require that appraisers be competent
        • To establish uniform standards of appraisals
        • To protect federal financial and public interests in real estate transactions
      FIRREA – The Financial Institutions Reform, Recovery and Enforcement Act was passed in 1989 for what purpose?
        • To protect the public from bad lenders
        • To require that appraisers be competent
        • To establish uniform standards of appraisals
        • To protect federal financial and public interests in real estate transactions
      FIRREA – The Financial Institutions Reform, Recovery and Enforcement Act was passed in 1989 for what purpose?
    • Loan Underwriting
      • Quantification of borrowers’ ability to repay a debt
      • Application of risk mitigation measures
      • Analysis of data collected in the application process
    • If a borrower has a gross monthly income of $4,755 and $2,960 in revolving debts, what would the debt to income ratio be
      • 62%
      • 52%
      • 42%
      • 64%
    • If a borrower has a gross monthly income of $4,755 and $2,960 in revolving debts, what would the debt to income ratio be
      • 62%
      • 52%
      • 42%
      • 64%
    • If a borrower has a gross monthly income of $4,755 and a house payment of $1600 per month, what could their maximum revolving debt be to keep the DIT at 36%
      • $1,180.00
      • $111.80
      • $1,711.80
      • $3,155.00
    • If a borrower has a gross monthly income of $4,755 and a house payment of $1600 per month, what could their maximum revolving debt be to keep the DIT at 36%
      • $1,180.00
      • $111.80
      • $1,711.80
      • $3,155.00
    • Gramm-Leach-Bliley Act
      • Requires protection of consumer information
      • Requires lenders to allow a borrower to opt-out of sale or transfer of their information
      • Protect consumers privacy
      • Require all financial institutions to provide consumers an op-out before disclosing consumer information to third parties
      • Provide a disclosure about the a borrowers personal information financial institutions collect and what they do with that information
      • All of the above
      The Gramm-Leach-Bliley Act (GLB), passed in 2000 is best described as an act to:
      • Protect consumers privacy
      • Require all financial institutions to provide consumers an op-out before disclosing consumer information to third parties
      • Provide a disclosure about the a borrowers personal information financial institutions collect and what they do with that information
      • All of the above
      The Gramm-Leach-Bliley Act (GLB), passed in 2000 is best described as an act to:
      • Sales of money orders
      • Credit counselors
      • Relocation services that assist individuals with financing for moving
      • All of the above
      Which of the following are examples of businesses that engage in financial activities under GLB?
      • Sales of money orders
      • Credit counselors
      • Relocation services that assist individuals with financing for moving
      • All of the above
      Which of the following are examples of businesses that engage in financial activities under GLB?
    • Consumer Credit Protection Act
      • Meaningful disclosure of credit terms so that consumers will be able to compare the various credit terms available 
      • To assure a meaningful disclosure of the terms of leases of personal property for personal, family, or household purposes
    • Consumer Credit Protection Act
      • Does not apply to the following:
      • Credit transactions involving extensions of credit primarily for business, commercial, or agricultural
      • (2)  Transactions in securities or commodities accounts
      • (3)  Credit transactions, other than those in which a security interest is or will be acquired in real property, or in personal property to be used as the principal dwelling of the consumer in which the total amount financed exceeds $25,000
    • Consumer Credit Protection Act disclosures may be waived if the consumer:
      • Has an annual income of more than $200,000
      • Has net assets in excess of $1,000,000
      • Gives a handwritten waiver, signed, and dated before the loan is made
      • All of the above
    • Consumer Credit Protection Act disclosures may be waived if the consumer:
      • Has an annual income of more than $200,000
      • Has net assets in excess of $1,000,000
      • Gives a handwritten waiver, signed, and dated before the loan is made
      • All of the above
    • Red Flag Rules
      • A Red Flag is a pattern, practice or activity indicating possible existence of identity theft including:
      • Alerts, notifications, or other warnings from consumer reporting agencies or service providers such as fraud detection services;
      • Suspicious documents
    • What’s a Red Flag?
      • Suspicious personal identifying information, such as a suspicious address change;
      • Unusual use of, or other suspicious activity of a covered account
    • What’s a Red Flag?
      • 5. Notice from customers and/or victims of id theft, law enforcement, or others regarding possible identity theft in connection with covered accounts
    • A lender should take all of the following actions if it suspects identity theft, except:
      • Ask the client for their mothers maiden name
      • Ask for additional identification
      • Do not open a new account
      • Call the Arizona Department of Financial Institutions
    • A lender should all of the following actions if it suspects identity theft, except:
      • Ask the client for their mothers maiden name
      • Ask for additional identification
      • Do not open a new account
      • Call the Arizona Department of Financial Institutions
    • Federal Truth In Advertising
    • Advertising
      • Advertising “fixed” if the payment or rate will change at any time.
      • Advertising a product that is not available
      • Advertising “government loans” or “government supported” loans that are not
    • Advertising
      • 4. Mail advertising that uses the current lenders name prohibited unless:
        • the letter states the advertisers name and
        • discloses that advertiser is not the same as current lender.
    • In Arizona a Mortgage Loan Originator may advertise independently of their company if the MLO:
      • Uses their personal NMLS number
      • Uses their personal and company NMLS numbers
      • Has written permission from the company
      • None of the above
    • In Arizona a Mortgage Loan Originator may advertise independently of their company if the MLO:
      • Uses their personal NMLS number
      • Uses their personal and company NMLS numbers
      • Has written permission from the company
      • None of the above
    • Advertising
      • “ Equal prominence and close proximity” required for advertizing loan terms such as
      • Balloon Payments
        • Must state amount that will be due
        • Must state when balloon will be due
    • The Patriot Act
      • USA PATRIOT Act of 2001, requires financial institutions to implement a customer identification program to verify the identities of customers opening new accounts.
    • The Patriot Act
      • Bank Secrecy Act regulations requires that financial institutions:
        • implement a written risk-based customer identification program;
        • maintain records, including customer information and methods, used to verify customers' identities; and
        • compare the names of new customers against government lists of known or suspected terrorists or terrorist organizations when such lists are provided by their federal regulator.
    • One of the objectives of the Patriot Act is
      • To prevent the acquisition of US assets by foreign persons
      • To prevent money laundering
      • To promote Buy American Policies
      • All of the above
    • One of the objectives of the Patriot Act is
      • To prevent the acquisition of US assets by foreign persons
      • To prevent money laundering
      • To promote Buy American Policies
      • All of the above
    • Flood Disaster Protection Act
      • Requires lenders that make loans on federally related transactions to have flood insurance
      • Establishes minimum requirements for flood insurance
        • Less than the replacement value of the property and personal property
        • Expired in less than 5 years after the life of the loan
        • Less than the replacement cost of the structures less the estimated land cost
        • Less than the appraised land value
      Where flood insurance is a requirement of a mortgage loan, the amount of insurance must not be
        • Less than the replacement value of the property and personal property
        • Expired in less than 5 years after the life of the loan
        • Less than the replacement cost of the structures less the estimated land cost
        • Less than the appraised land value
      Where flood insurance is a requirement of a mortgage loan, the amount of insurance must not be
    • Fraud
      • Misleading or false statements
      • Deception
      • Diversion of money or other assets
      • Conspiracy to deceive
    • In Arizona, a person may be complicit in fraud if a person:
      • Knowingly records any document in connection with a fraudulent loan
      • Is aware that information used when obtaining a loan was false or misleading
      • Accepted money from a fraudulent loan
      • All of the above
    • In Arizona, a person may be complicit in fraud if a person:
      • Knowingly records any document in connection with a fraudulent loan
      • Is aware that information used when obtaining a loan was false or misleading
      • Accepted money from a fraudulent loan
      • All of the above
    • Predatory Lending
      • Identification of abusive lending practices
      • Identify federal and state laws that address predatory lending
    • In response to increased consumer complaints about predatory practices the following Acts were passed:
      • Home Ownership Equity Protection Act
      • Higher Priced Mortgage Act
      • Mortgage Disclosure Improvement Act
      • All of the above
    • In response to increased consumer complaints about predatory practices the following Acts were passed:
      • Home Ownership Equity Protection Act
      • Higher Priced Mortgage Act
      • Mortgage Disclosure Improvement Act
      • All of the above
    • Ethical Behavior
      • Subjective scenarios where participants must decided which are right or wrong
    • A mortgage loan originator charges two points on every loan. However if a borrower fails to provide timely information the MLO will increase the processing fee by $250.00. Is this ethical?
      • Yes, a lender may be compensated for additional work
      • No, this action is a violation of the Equal Opportunity Credit Act and demonstrates inconsistent practices
    • A mortgage loan originator charges two points on every loan. However if a borrower fails to provide timely information the MLO will increase the processing fee by $250.00. Is this ethical?
      • Yes, a lender may be compensated for additional work
      • No, this action is a violation of the Equal Opportunity Credit Act and demonstrates inconsistent practices
    • VETERANS ADMINISTRATION LOANS
      • Serviceman’s Readjustment Act of 1944
      • Helped stimulate growth after WWII
        • VA is authorized to guarantee loans to purchase or construct homes for eligible veterans.
    • The following are considered benefits of VA loans except :
      • 100% Financing
      • Low monthly mortgage insurance premiums
      • Assumable mortgage
      • Right to prepay without penalty
    • The following are considered benefits of VA loans except :
      • 100% Financing
      • Low monthly mortgage insurance premiums
      • Assumable mortgage
      • Right to prepay without penalty
    • To be eligible for a VA loan the applicant may be one of the following except:
      • Active duty veterans
      • Widows of veterans who have not remarried
      • MIAs or POWs
      • Reserve National Guard personnel
    • To be eligible for a VA loan the applicant may be one of the following except:
      • Active duty veterans
      • Widows of veterans who have not remarried
      • MIAs or POWs
      • Reserve National Guard personnel
    • The maximum DTI for a VA loan is
        • An overall debt ratio of 41%
        • An overall debt ratio of 45%
        • A housing debt ratio of 36%
        • A housing debt ratio of 28%
    • The maximum DTI for a VA loan is
        • An overall debt ratio of 41%
        • An overall debt ratio of 45%
        • A housing debt ratio of 36%
        • A housing debt ratio of 28%
    • Adjustable Rate Mortgages
      • Typically identified by period that rate is fixed and term adjustable there after
      • Tied to an index
      • Usually has a margin
      • Sometimes ARM loans have Caps
    • At close of escrow the interest rate on a 3/1 ARM is 5.75%. The loan has a life cap of 5 and an semi- annual cap of 1. In year 2 of the loan, if the index was 4.5% and the margin is 2.75% what is the interest rate for this loan?
      • 7.25
      • 8.5
      • 6.275
      • 5.75
    • At close of escrow the interest rate on a 3/1 ARM is 5.75%. The loan has a life cap of 5 and an semi- annual cap of 1. In year 2 of the loan, if the index was 4.5% and the margin is 2.75% what is the interest rate for this loan?
      • 7.25
      • 8.5
      • 6.275
      • 5.75
        • ARM loans
        • VRM loans
        • Negative amortization loans
        • Pay option loans
      Alternative mortgages under the Garn-St. Germain Act were consider to be all of the following except:
        • ARM loans
        • VRM loans
        • Negative amortization loans
        • Pay option loans
      Alternative mortgages under the Garn-St. Germain Act were consider to be all of the following except:
    • Title Insurance and Escrow
      • Types of title insurance
        • Standard
        • Alta
        • Mortgagee’s insurance
        • Mortgagor’s insurance
      • Deeds and conveyance documents
      • Notarized
      • Recorded
      • Delivered
      • Whichever occurs first
      Title to property passes when the deed is:
      • Notarized
      • Recorded
      • Delivered
      • Whichever occurs first
      Title to property passes when the deed is:
      • An easement by prescription
      • Adverse possession
      • Assemblage
      • Eminent domain
      If you watch your neighbor cross a corner of your property every day and you do not give permission for the neighbor to cross, you may be at risk of
      • An easement by prescription
      • Adverse possession
      • Assemblage
      • Eminent domain
      If you watch your neighbor cross a corner of your property every day and you do not give permission for the neighbor to cross, you may be at risk of
    • Real Estate Sales Contracts
      • Participants must
      • Have command of real estate terminology
      • Understand Arizona real estate and subdivision law
      • Know the difference with alternate types of financing agreements
        • A grantee
        • A grantor
        • Words of conveyance
        • Consideration
      The ceremonial passing of a clod of earth in early English land transfers has been replaced by
        • A grantee
        • A grantor
        • Words of conveyance
        • Consideration
      The ceremonial passing of a clod of earth in early English land transfers has been replaced by
    • Which of the following requires a public sale if the borrower defaults
      • Breaking strict performance
      • Forcible entry and possession
      • Deed in lieu of foreclosure
      • Exercising power of sale
    • Which of the following requires a public sale if the borrower defaults
      • Breaking strict performance
      • Forcible entry and possession
      • Deed in lieu of foreclosure
      • Exercising power of sale
    • Mortgage Disclosure Improvement Act
      • Effective July 30, 2009
      • No collection of fees, except credit report, prior to disclosures
      • Early Disclosures – 3 business days from application
    • Pursuant to MDIA, the tolerance of the Annual Percentage Rate may be greater than
      • .5%
      • .0125%
      • 1.25%
      • .125%
    • Pursuant to MDIA, the tolerance of the Annual Percentage Rate may be greater than
      • .5%
      • .0125%
      • 1.25%
      • .125%
      • Reaffirming the requirement of providing disclosures three days after application for a loan
      • Requiring a minimum of seven (7) days waiting time after acceptance of an application before loan closing
      • Requiring adherence to tolerance of the APR of .125%
      • Elimination of payment of loan discount fees to mortgage brokers
      In 2009 Congress passed the Mortgage Disclosure Improvement Act for all of the following purposes except:
      • Reaffirming the requirement of providing disclosures three days after application for a loan
      • Requiring a minimum of seven (7) days waiting time after acceptance of an application before loan closing
      • Requiring adherence to tolerance of the APR of .125%
      • Elimination of payment of loan discount fees to mortgage brokers
      In 2009 Congress passed the Mortgage Disclosure Improvement Act for all of the following purposes except:
    • If a TIL disclosure is out of tolerance the loan originator must
      • Provide a new written disclosure and give the borrower a new 3 day cooling off period
      • Redisclose at close of escrow
      • Give the borrower a 7 day right of rescission
      • Give the borrower a new disclosure 60 days after close of escrow
    • If a TIL disclosure is out of tolerance the loan originator must
      • Provide a new written disclosure and give the borrower a new 3 day cooling off period
      • Redisclose at close of escrow
      • Give the borrower a 7 day right of rescission
      • Give the borrower a new disclosure 60 days after close of escrow
    • STATE EXAM TOPICS
    • How DFI Regulates
      • Empowerment of the Superintendant
      • What statutes govern
        • Mortgage bankers
        • Mortgage brokers
      • Record keeping
      • Accounting
      • Prohibited Acts
    • Superintendent’s Powers
      • Require appropriate records, documents, information and reports from any financial institution or enterprise
      • Examine or cause to be examined the business and affairs of any enterprise … at the superintendent's discretion … least once in a five year period
    • The license for a mortgage broker, mortgage banker or mortgage loan originator is valid:  
      • For a one year period
      • If each completes the required continuing education units during the preceding year
      • If not suspended for any reason
      • All of the above
    • The license for a mortgage broker, mortgage banker or mortgage loan originator is valid:  
      • For a one year period
      • If each completes the required continuing education units during the preceding year
      • If not suspended for any reason
      • All of the above
    • Mortgage Bankers and broker must keep corporate records for
      • 2 years
      • 5 years
      • 2 years from origination
      • Indefinitely
    • Mortgage Bankers and broker must keep corporate records for
      • 2 years
      • 5 years
      • 2 years from origination
      • Indefinitely
    • The license number of a mortgage broker or banker must be on all of the following except:
      • Promotional items
      • Use of the company name at charity events
      • Business cards
      • None of the above
    • The license number of a mortgage broker or banker must be on all of the following except:
      • Promotional items
      • Use of the company name at charity events
      • Business cards
      • None of the above
    • If properly licensed the following may be paid a fee related to a loan except:
      • Other mortgage lenders
      • Lead generators
      • Processing companies
      • Legal entities as front for loan officers
    • If properly licensed the following may be paid a fee related to a loan except:
      • Other mortgage lenders
      • Lead generators
      • Processing companies
      • Legal entities as front for loan officers
    • Every mortgage loan file must contain the following except
      • The borrowers tax returns
      • A written agreement for fees and documents
      • Documents relative to the disposition of the loan
      • All correspondence with the borrower
    • Every mortgage loan file must contain the following except
      • The borrowers tax returns
      • A written agreement for fees and documents
      • Documents relative to the disposition of the loan
      • All correspondence with the borrower
    • PROHIBITED ACTS
      • Mortgage Bankers may not make a loan of $10,000 or less that is not secured by a mortgage lien
      • Mortgage Brokers may not make a loan of $5,000 or less that is not secured by a mortgage lien
    • PROHIBITED ACTS 6-947 N-O
      • Licensees m ay not record a Deed of Trust if the money is not available to disburse unless
        • Mortgage banker/broker informs borrower in writing
        • Provides a definite date that the funds will be available
        • Obtains written permission from borrower for delay
        • An estoppel certificate.
        • An affidavit of value so the taxes can be equitably billed to the property
        • A Release of Lien and Reconveyance of title
        • A Defeasance lien
      In Arizona, when a deed of trust is satisfied, an instrument is recorded. This instrument is:
        • An estoppel certificate.
        • An affidavit of value so the taxes can be equitably billed to the property
        • A Release of Lien and Reconveyance of title
        • A Defeasance lien
      In Arizona, when a deed of trust is satisfied, an instrument is recorded. This instrument is:
        • Usury
        • High rate financing
        • Violation of Section 8
        • Predatory lending
      If a lender is accused of charging more than the legal rate of interest, the lender is accused of?
        • Usury
        • High rate financing
        • Violation of Section 8
        • Predatory lending
      If a lender is accused of charging more than the legal rate of interest, the lender is accused of?
    • When a mortgage is used, the lender is known as the:
      • Mortgagee
      • Mortgagor
      • Trustor
      • Trustee
    • When a mortgage is used, the lender is known as the:
      • Mortgagee
      • Mortgagor
      • Trustor
      • Trustee
    • In Arizona, mortgage bankers and brokers are permitted to make unsecured loans
      • True
      • False
    • In Arizona, mortgage bankers and brokers are permitted to make unsecured loans
      • True
      • False
    • A responsible party for a mortgage banker or brokers license must be;
      • a natural person
      • a U.S. Citizen
      • experienced in real estate
      • an officer of the corporation
    • A responsible party for a mortgage banker and brokers license must be;
      • a natural person
      • a U.S. Citizen
      • experienced in real estate
      • an officer of the corporation
    • In Arizona, an exclusive agreement to arrange a loan is permitted when the loan is:
      • Above $200,000
      • Below $200,000
      • Net proceeds are above $150,000
      • Net proceeds are below $150,000
    • In Arizona, an exclusive agreement to arrange a loan is permitted when the loan is:
      • Above $200,000
      • Below $200,000
      • Net proceeds are above $150,000
      • Net proceeds are below $150,000
    • Identify the financing agreement that conveys equitable title but not legal title
      • Deed of Trust
      • Deed of Conveyance
      • Contract for Deed
      • Deed of Release
    • Identify the financing agreement that conveys equitable title but not legal title
      • Deed of Trust
      • Deed of Conveyance
      • Contract for Deed
      • Deed of Release
    • QUESTIONS AND ANSWERS Please raise your virtual hand if there are others talking. If no one is talking, you may ask any question.