NMLS SAFE EXAM 2022 ALREADY PASSED, Graded A

NMLS SAFE EXAM 2022 ALREADY PASSED What does TILA stand for? ✔✔Truth-In-Lending Act, Regulation Z What is a HELOC loan? ✔✔a secured loan in that you are borrowing against the equity that has been built in your house ...

NMLS SAFE EXAM 2022 ALREADY PASSED What does TILA stand for? ✔✔Truth-In-Lending Act, Regulation Z What is a HELOC loan? ✔✔a secured loan in that you are borrowing against the equity that has been built in your house What is a REFI loan? ✔✔ LTV stands for ✔✔Loan to Value Define PMI and state what the acronym stands for. ✔✔Private mortgage insurance- on conventional loans Define one time variable funding fee and people in what situations is it waived for? ✔✔Disabled veterans and surviving spouses. USDA loans are also called what? ✔✔502 loans Define MIP ✔✔Can be paid up front or in installments. Mortgage insurance premium used by FHA to protect themselves against higher-risk borrowers who are more likely to default on loans Define APR ✔✔annual percentage rate Define APOR ✔✔average prime offer rateDefine HPML ✔✔High price mortgage loans or Section 35 loans. A mortgage with an annual percentage rate (APR) that's higher than the average prime offer rate (APOR) When is a loan considered to be a section 35 loan? (High price mortgage loan) ✔✔- When the APR exceeds APOR by 1.5% on a first lien, 2.5% on Jumbo first lien or 3.5% on subordinate lien What requirements are placed on section 35 loans? (High price mortgage loans) ✔✔APE A- ATR / ability to repay P- no PREPAYMENT penalty unless in the first 2 years E- requires ESCROW of the taxes and hazard insurance for the first 5 years Define ATR ✔✔Ability to repay 8 Factors of ATR ✔✔MICE DOES M- Monthly mortgage I- Income + assets C- Credit history E- Employment D- Debt to Income Ratio O- Other debts E- Expenses S- Simultaneous mortgage What are section 32 loans? ✔✔High cost mortgage loans. Considered to be HCML when APR exceeds APOR by 6.5% on first lien on loan $50,000 or higher, or 8.5% on first lien on a loan that's less than $50,000 or 8.5% on subordinate lien. What requirements are placed on Section 32 loans / HCML / High cost mortgage loans? ✔✔BAPS B- no BALLOON payment A- must have ATRP- no PREPAYMENT PENALTY S- must SPEAK to a HUD counselor What makes a complete application? ✔✔ALIENS A- Address L- Loan amount I- Income E- Estimated value N- Name S- Social security number What is a 1003 and a 1004 form? ✔✔URLA - Uniform Residential Loan Application and URAR - Uniform Residential Appraisal Report What is a 1005 and 1006 form? ✔✔VOE - Verification of employment and VOD - Verification of deposits (bank balance) What is a 1008 form? ✔✔Transmittal summary. Top sheet! SUMMARY What are the protected classes under ECOA AND Fair Housing Act? ✔✔- Sex - Color - National origin - Race Religion What are the protected classes that are under ECOA but NOT Fair Housing Act? ✔✔- Maritial status - Age- Public assistance What are the protected classes that are under Fair Housing Act but NOT ECOA? ✔✔- Familial status - Disability What things are NOT included in the APR? ✔✔- Title insurance - Escrow - Notary fee - Appraisal - Credit report fee - Termite inspection fee - Seller credits What makes a mortgage a qualified mortgage? (Rules of 3s) ✔✔- The point and fees of the mortgage cannot exceed 3% - The back end ratio cannot exceed 43% - The prepayment penalty is limited to the first 3 year - No terms over 30 years allowed - No toxic features: no balloon payments, no interest only terms, no negative amortization - Qualified mortgages has ATR What documents must you keep for 5 years? ✔✔Suspicious Activity Report (SAR) and Closing disclosure (CD) What documents must you keep for 3 years? ✔✔- Loan Application Register (LAR) - Loan Estimate (LE) - Line of Credit (LOC) What documents must you keep for 2 years? ✔✔everything thats not 5 or 3What documents must you keep for 25 months? ✔✔ECOA Where can you find the NMLS # ✔✔PLAMT - Promissory note - 1003 URLA (Loan application -Advertisements - Mortgages - Trust deeds What are the flood zones? ✔✔High risk: A and V Moderate risk: B and X Low risk: C and X RESPA Disclosures include the following: ✔✔KAMILAS - Know before you owe handbook - Affiliated business arrangement handbook - Mortgage servicing disclosure statements - Initial escrow - List of HUD approved counselors - Anual escrow - Servicing transfer disclosure -(GFE and HUD used for non purchases) What is the penalty for violating GLB? ✔✔Up to 5 years and a fine What is the penalty for violating RESPA? ✔✔up to $10,000 and/or 1 year What is the penalty for sending an unauthorized fax? ✔✔$500What is the penalty for violating ECOA? ✔✔Up to $10,000 What is the penalty for violating TILA? ✔✔$5K for single violation $25k for reckless violation $1M per day of knowingly committing a violation What is the penalty for violating SAFE Act? ✔✔Up to $30,058 What is the penalty for violating DNC? (Do not call list? ✔✔up to $43,280 What is the penalty for violating HMDA? ✔✔Based on the penalty matrix What is the penalty for violating FACTA? ✔✔$5K and/or 1 year What are the TILA disclosures? ✔✔A BRAWL on closed caption TV B- Balloon notice R- Right to rescind A- ARM disclosure W- When you're home is on the line disclosure L- Loan estimate C- Charm booklet C- Closing disclore T- Transfer or mortgage What things have a 0% tolerance. ✔✔TRAIL T- Transfer taxes R- Credit Report A- Appraisal I- Interest rate L- Loan originationWhat things have a 10% tolerance? ✔✔- Government reporting fee - Title insurance or any service chosen by the borrower from the lenders recommended list What things have no tolerance requirements? ✔✔TIP - Termite inspection - Insurance hazard and title - Prepaid interest Finance charges do not include.... ✔✔PANS BC - Points paid by the seller - Appraisal fee - Notary fee - Security interest charges, if itemized and disclosed - Bona fide and reasonable fees - Credit report fee Which regulation is TILA? ✔✔Regulation Z How long after a completed loan application must a LE be submitted? ✔✔3 days. If there are any changes made to the information, you have 3 days to resend updated loan estimate What is the absolute only thing a borrower can be charged for before receiving their loan estimate? ✔✔Credit report There is a ____ day waiting period between receiving the loan estimate and consummation of the loan. ✔✔7 day. (Can be waived by borrower in cases of bona fide personal financial emergency which requires the transaction to close quickly; ex. foreclosure)the following fees may not vary at all from the amount set forth in the Loan Estimate (i.e., there is zero tolerance) ✔✔- Fees paid to the creditor, mortgage broker, or an affiliate of either - Fees paid for third-party provider services for which the consumer was NOT allowed to choose the provider - Transfer taxes A Loan Estimate is good for how many days? ✔✔10 The three circumstances under which a revised Closing Disclosure must be issued and the waiting period restarted are as follows: ✔✔- The loan's disclosed APR becomes inaccurate - Changes in the terms of the loan product offered - Addition of a prepayment penalty A Closing Disclosure must be provided no less than ____ business days prior to consummation. ✔✔3 ECOA Valuations rule: ✔✔Lenders have 3 days from application to notify a borrower of their right to a copy of their appraisal and lenders must provide promptly upon completion or at least 3 days prior to close whichever is earlier. Borrowers can waive the timing requirement and accept the appraisal at closing. (If the loan does not close, and they signed a waiver you have 30 days to provide the applicant with a copy.) What HMDA mean? ✔✔The Home Mortgage Disclosure Act (Regulation C) - requires lenders to report data regarding its mortgage lending activity Dwellings subject to HMDA reporting requirements include: ✔✔VIRM - Vacation or second homes. - Individual condominiums or cooperative units - Rental properties- Manufactured homes and mobile homes Define FCRA ✔✔The Fair Credit Reporting Act (Regulation V) regulates consumer credit reporting agencies Define the MAP Rule ✔✔Mortgage Acts and Practices Advertising Rule (Regulation N) is a federal rule governing the advertising of mortgage products Define E-Sign Act ✔✔The Electronic Signatures in Global and National Commerce Act (E-Sign Act) governs the circumstances under which electronic signatures may be accepted on certain disclosures and document Define a straw buyer ✔✔a person who purchases the property or applies for the loan in his or her own name for the actual borrower Define silent seconds ✔✔arrangements in which the borrower obtains a second, undisclosed and unrecorded loan directly from the seller and uses this to help cover a down payment and closing costs on the purchase loan from a lender Fraud for housing vs Fraud for profit ✔✔fraud for property, involves a borrower lying about his or her income and/or assets in order to qualify for a mortgage loan vs may involve a number of individuals (e.g., the seller, the mortgage licensee, an appraiser) - Occupancy fraud (i.e., a representation that the buyer will reside in the property when that is not the case) - Documentation fraud - Appraisal fraud (i.e., the use of an inflated appraisal to secure a larger loan or to flip a property) Mortgage loan fraud is punishable by: ✔✔-For making a fraudulent or false statement, up to five years in jail and/or a $100,000 fine-For submission of a false mortgage loan application, conspiracy to commit fraud, or bank fraud, up to 30 years in jail and/or a $1 million fine Define The GLB Act ✔✔The Gramm-Leach-Bliley Act (Regulation P) enacted to protect the privacy of consumer personal information Define Nonpublic Personal Information (NPI) ✔✔any personally-identifiable financial information that a financial institution obtains in connection with providing a financial product or service Define Personally-identifiable financial information ✔✔Information provided to a financial institution by a consumer in connection with a credit transaction. - ex. name, address, Social Security Number, or other information on a loan application - Account numbers, payment history, loan balances, deposit balances, or credit card purchases - A credit report Flood insurance must be purchased from who? ✔✔NFIP National flood insurance program What is the minimum and maximum amount of flood insurance needed? ✔✔Min = 100,000 Max = 250,000 What are the 4 elements of a valid contract? ✔✔competent parties, mutual agreement, legal object and consideration What're are the front end and back end ratios for conventional loans? ✔✔28% front end and back end 36%