National And UST Mortgage Practice
Exam 1 Questions And Answers With
Verified Solutions 100% Correct!!!
Rental Income to Qualify for a Loan
A. $1,000
B. $800
C. $750 ✔
D. $1,250
Explanation: 75% of rental income is used to qualify a borrower, so 75% of
$1,000 = $750.
Freddie Mac's Automated Underwriting System
A. Desktop Originator
B. Underwriter Assistant
C. Loan Product Advisor ✔
D. AUS
Explanation: Freddie Mac's system is called Loan Product Advisor, while
Fannie Mae uses Desktop Underwriter.
Items for Debt-to-Income Calculation
A. Monthly rent expense on current home, credit card payment, car
insurance
B. Car payment, boat payment, child support obligations ✔
C. Property tax payment, utility payment, cable bill
D. Mortgage insurance payment, average grocery costs, electric bill
Explanation: These are all monthly debt obligations, whereas utilities and
food costs are not included.
Electronic Signature Requirements
, A. Borrowers must be given the option to receive the disclosures in
paper form
B. Borrowers must be able to withdraw their consent to receive the
disclosures electronically
C. The company must record the IP address from which the documents
were accessed ✔
D. The company must disclose hardware and software requirements to
borrowers
Explanation: This is not required by the E-SIGN Act. The law focuses on
providing paper options, the right to withdraw consent, and
hardware/software requirements.
Recordkeeping under the S.A.F.E. Act
A. Not knowingly withholding, removing, or destroying any books or
records
B. Making all of the licensee's records available to borrowers upon
demand ✔
C. Permitting interviews of principals, loan originators, and
independent contractors by state regulators
D. Making records and books available to the state regulator
Explanation: Loan originators are not required to make records available to
borrowers at their request, only to state regulators.
Prohibition of Discrimination in Credit Transactions
A. Regulation C
B. Regulation B ✔
C. Regulation Z
D. Regulation G
Explanation: Regulation B implements the Equal Credit Opportunity Act
(ECOA) to prevent discrimination in credit transactions.
Owner-Occupied Loan Occupancy Requirement
, A. Within 30 days of closing
B. Within 90 days of closing
C. Within 60 days of closing ✔
D. Within 15 days of closing
Explanation: Borrowers must occupy the property within 60 days of closing
for owner-occupied loans.
Conveying Property
A. Deed rider
B. Warranty deed ✔
C. Note
D. Deed of trust
Explanation: A warranty deed is used to transfer ownership of property and
guarantees clear title.
FHA Loan Insurance
A. Guarantees the loans, thereby protecting the lender
B. Acts as the lender
C. Issues private mortgage insurance
D. Insures the loans, thereby protecting the lender ✔
Explanation: The FHA insures loans made by approved lenders, offering
protection in case of borrower default.
Mortgage Loan Originator Responsibilities
A. Performs clerical and support duties for his/her sponsoring broker
B. Advises loan applicants on current rates and loan terms ✔
C. May take responsibility for servicing a loan after it has been
consummated
D. Negotiates the sale and purchase of residential real estate
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