mortgage 125 Question Comprehensive Practice National Exam Answered & Graded
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125 Question Comprehensive Practice Nationa
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125 Question Comprehensive Practice Nationa
Which disclosure, required to be sent three days after application, indicates to the borrower whether or not the servicing of their loan may be sold or transferred? - Correct Answer The Mortgage Servicing Disclosure, required by RESPA, is specifically supposed to inform the consumer whether or not...
mortgage 125
Question Comprehensive Practice National
Exam Answered & Graded
Which disclosure, required to be sent three days after application, indicates to the borrower whether or
not the servicing of their loan may be sold or transferred? - Correct Answer The Mortgage Servicing
Disclosure, required by RESPA, is specifically supposed to inform the consumer whether or not the
servicing of their loan will remain with the originating lender or if it will be sold to another company to
be serviced
Which federal law allows borrowers to request PMI cancellation when their LTV reaches 80%? - Correct
Answer The Homeowners Protection Act is all about Private Mortgage Insurance (PMI). It specifies that a
borrower can request PMI be taken off of their loan at 80% LTV but that it must be removed when the
borrower's LTV at 78%
Reginald works a full-time job as a schoolteacher and makes $43,000 a year. He also has been working a
part-time job for the last two years working 10 hours a week at $10.50 an hour. His wife, Julia, works as a
medical assistant and makes $22.50 an hour and works 45 hours a week. What is their gross monthly
income? - Correct Answer $8,426
The legal link between a person who owns property and the property itself is the: - Correct Answer Title
is the legal link between a person who owns a property and the property itself. The deed is the
document that conveys ownership in a property between people.
Section 35 of TILA governs what type of loan? - Correct Answer Section 35 of TILA governs higher priced
loans, not to be confused with Section 32, which covers high cost loans.
How many years of employment is required to be disclosed on the 1003? - Correct Answer The 1003
requires that 2 years minimum be disclosed on the 1003. So if an individual has only been at their
current job 6 months, you'll need to account for another 1.5 years of employment.
,Genevieve wants to buy a home, but her credit score took a tank after her divorce. Her brother, Donald
has a great credit profile, though, and she asks him to apply for a loan for her. Genevieve promises
Donald that she will pay the mortgage. What would Donald be considered? - Correct Answer Donald
would be considered a straw buyer because Genevieve is using his credit profile and his identity for the
purpose of obtaining a loan
Jordan has a bankruptcy on her credit report. How long can that bankruptcy continue to stay on her
credit report? - Correct Answer Jordan's bankruptcy will continue to appear on her credit report for 10
years and then it will fall off of the credit report
What are the three types of appraisal? - Correct Answer There are three types of appraisals, the income
approach, the cost approach and the sales comparison approach.
What type of appraisal takes the cost of rebuilding the property, plus the cost of the land the property is
on and subtracts any depreciation to determine a value of the property? - Correct Answer The cost
approach appraisal is the simplest of the three types of appraisals. It is simply the cost of rebuilding the
house plus the cost of the land it sits on. If there is any depreciation, then it would need to be subtracted
from the value of the property.
Anna is looking to purchase a new home. She lives in a small town of under 20,000 people. What loan
program would be a good option for her? - Correct Answer Anna lives in a rural area, therefore, she
would likely qualify for a USDA loan, and it should be something that a mortgage loan originator should
present to her.
Which law promotes informed use of credit by requiring the disclosure of the APR to the borrower? -
Correct Answer TILA requires the disclosure of the borrower's APR and thus promotes informed use of
credit. TILA was put into place in 1968, and is also know as Regulation Z, over the course of its lifetime,
TILA has been expanded its protection of consumers and its requirements for disclosure of pertinent
information regarding a borrower's transaction.
When must the Home Loan Toolkit be provided to the borrower? - Correct Answer The Home Loan
Toolkit must be provided 3 days after application on purchase transaction per the TILA-RESPA Integrated
Disclosure Rule.
There is a lender working in a large metropolitan area, but currently, they are targeting a low-income
neighborhood and charging more for their loans because the individuals in the area are mostly African
American. This would be considered: - Correct Answer Reverse Redlining is the opposite of Redlining. It
, is drawing a red line around an area and then going into the area and taking advantage of those
individuals by charging them higher fees for their loans.
For borrowers, what would be a good fit for a reverse mortgage? - Correct Answer Being over 62 years
of age & owing a little to their home
According to FCRA, how often is a consumer entitled to a free copy of their credit score? - Correct
Answer FCRA allows for a borrower to receive a free copy of their credit report, but that does not
include the disclosure of a borrower's credit score
George has a loan that is amortizing over 30 years, but he will be required to pay the remaining principal
in 15 years. What is this called? - Correct Answer George will be paying a balloon payment at 15 years. A
balloon payment requires that the borrower pays the remaining principal balance of the loan after a
certain period, in George's case after 15 years.
Travis is disclosing an origination fee of $1200 on the initial Loan Estimate. What is the maximum that
origination fee can change between the Loan Estimate and the Closing Disclosure? - Correct Answer The
origination fee can never change from the time the Loan Estimate is disclosed to the time the Closing
Disclosure is issued. It is a 0 tolerance fee.
Which of the following would not be a prohibited practice regarding an appraisal? - Correct Answer It is
allowable to request that an appraiser looks at additional information or additional comparables with
the hope that the appraiser might raise the value of the property. What is not acceptable is threatening,
bribing or coercing an appraiser to raise a property value
A mortgage loan originator is required to keep a record of compliance with TILA for how many years? -
Correct Answer Under TILA, it is required that lenders keep documentation that they have complied
with TILA for 2 years. Other disclosures like the Closing Disclosure must be kept for 5 years.
Lucy has taken the National Test Component with the Uniform State Test two consecutive times and
failed, how long must she wait before she can take it again? - Correct Answer Lucy has failed the test
twice and therefore has one more shot 30 days from her second attempt to take the test again. If she
were to fail, the third time she would be required to wait 6 months before attempting to take the test
again.
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