Exam (elaborations)
Massachusetts State Exam|160 Questions and Answers
Massachusetts State Exam|160 Questions and Answers
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Massachusetts State Exam|160Questions and Answers
Who regulates and enforces regulations for mortgage brokers, lenders and
originators. - -The Division
- Who is the head of the Division - -The Commissioner
- What is the Divisions main goal? - -To Protect Consumers
- The Division of banks is comprised of five sections: - -1. Depository
Institution Supervision
2. Non-Depository Institution Supervision
3. Legal Affairs and Bank Structure
4. Enforcement and Investigation
5. Consumer Assistance and Public Information
- Main goal is to protect consumers by bringing action against mortgage
professionals in mortgage lending transactions, and even addressing issues
relating to foreclosure. - -The Attorney General.
- The attorney General is ... - -The ultimate enforcement tool representing
the Commonwealth of Massachusetts.
- The following are responsibilities of the Commissioner: (7) - -1. Approve,
deny, suspend, or revoke a license
2. Issue orders of restitution, or cease and desist
3. Issue temporary cease and desist orders (license granted in error)
4. Investigate and examine licensees
5. Issue rules and regulations
6. Conduct backround checks
7. Impose penalties and fines
- The Division Can NOT : (3) - -1. Make the mortgage law
2. Criminally prosecute a licensee
3. Exercise the same powers as a judge in a court of law. such as:
1. Sentence to jail time
2. Hold someone in contempt of court.
3. Issue an injunction
- What are the two types of licenses available in MA: - -1. Mortgage lender
and broker license
2. Mortgage Originator License
, - An oral or written agreement to loan or advance funds for mortgage loan
that specifies a loan amount, repayment terms, interest rate, and conditions
necessary to close the loan. - -Commitment
- An offer to assist a borrower in obtaining a mortgage on terms which the
mortgage professional does not intend to provide. - -Bait Advertising
- This is a tactic used to lure borrowers in so that the mortgage professional
can benefit - -Bait advertising
- Mortgage professionals and other entities required to obtain a license:(4) -
-1. Mortgage lenders
2. Mortgage brokers
3. Mortgage loan originators
4. Loan processors or underwriters acting as an independent contractor
- Out of state licensees? do they need to be licensed? - -out of state
licensees must be licensed in Massachusetts to make or arrange loans, and
designate a registered agent or attorney in MA to handle legal issues.
- Following entities that are EXEMPT from the licensing requirement:(11) - -
1. Lenders or brokers making FEWER THAN 5 LOANS within a 12 month time
span.
2. Depository institutions
3. Insurance Company
4. U.S government or subsidary
5. Non-profit organization
6. Real estate broker making only real estate compensation.
7. Individual acting on behalf of an immediate family member.
8. An attorney acting on behalf of a clients case in an ancillary matter.
9. Individual working as a loan processor or underwriter unless he/she is an
independent contractor.
10. An individual extending credit for time shares.
11. An individual negotiating a loan secured by a dwelling that served as that
individuals primary dwelling.
- Application fees: Mortgage Lender - - -$ 1500 (includes investigation fee)
- Application fees: Mortgage broker - - -$ 1000 (includes investigation fee)
- Application fees: Branch license - - -$ 50
- Application fees: Mortgage loan originator - - -$ 645 (includes investigation
fee)
, - The commissioner will approve or deny on every application for licensure
within how many days of filing? - -90 days of filing
- However any failure of the commissioner to act within that period is ? - -
Not considered approval
- What financial statements must be submitted for the current year and the
past 2 years? (4) - -1. A balance sheet
2. Income Statement
3. Statement of cash flow
4. Other relevant information.
- For renewal applications, a financial statement within ( ) of the close of the
fiscal (economic) year must be submitted. - -90 days of the close of the
fiscal (economic) year
- All financial statements are required to be...? - -Audited
- What is the minimum net worth for a LENDER ? - -$200,000
- What is the minimum net worth for a BROKER ? - -$25,000
- The purpose of ( ) is to make funds available if a borrower is harmed by a
mortgage professionals actions. - -Surety Bond
- A Surety Bond can be purchased through ? - -an Insurance company
- Surety bond standards for a lender? min and max ? how is this
determined? - -$100,000 min and $500,000 max (determined by the annual
report of the preceding year)
- Surety bond standards for a broker? - -$75,000
- A mortgage loan originator is allowed to use the surety bond of ? - -Their
employing entity.
- All licensees are required to submit ? - -a Credit Report
- What are the standards that show financial irresponsibility for an originator
( 3) : - -1. Current outstanding judgments or liens
*2. Foreclosures in the past 3 years
*3. A pattern of seriously delinquent accounts in the past 3 years.
- You need to disclose the following criminal, civil, and regulatory
disclosures: (5) - -1. Have been convicted or plead no contest to a felony at
ANY TIME.
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