NMLS flashcards #2 (Latest Update A+)
A customer asks his mortgage broker for the name of a good title company. The broker
has a list of several compani... [Show More] es with whom she has done business with in the past. At
what point according to RESPA must she give the customer an AfBA disclosure?
A. at least three days prior to closing
B. At the closing table
C. At the same time she gives the customer the list of title companies
D. She is not required to give the customer an AfBA disclosure if she has no ownership
or other interest in any of the title companies on the list. - Correct Answer-D. She is not
required to give the customer an AfBA disclosure if she has no ownership or other
interest in any of the title companies on the list.
What is the LEAST acceptable factor in evaluating a mortgage loan application?
A. amount of income
B. credit history
C. debt
D. source of income - Correct Answer-A. amount of income
What is the provision in a mortgage enabling the lender to demand full repayment if the
borrower sells the mortgaged property or partial interest in a mortgaged property
A. acceleration clause
B. alienation clause
C. partial lien release
D. prepayment penalty clause - Correct Answer-B. alienation clause
Which regulation encourages financial institutions to help meet the credit needs of
communities, including-low and moderate-income neighborhoods, consistent with safe
and sound lending practices?
A. CRA
B. HOEPA
C. RESPA
D. TILA - Correct Answer-A. CRA
According to ECOA, a borrower can request a copy of the appraisal report used in the
decision process within ___ days of a credit decision.
A. 15
B. 30
C. 60
D. 90 - Correct Answer-D. 90
The borrower knows that his credit is bad, but he really wants to buy a house. He
convinces his cousin to apply for a loan, knowing she will be able to get better terms. He
promises her that he will pay the full mortgage amount every month. She could be
considered a(n)
A. identify thief
B. investor
C. mortgage broker
D. straw borrower - Correct Answer-D. straw borrower
The relationship between the cost of borrowing and the total amount financed,
represented as a percentage, is know as
A. an ARM
B. the APR
C. a discount point
D. the note rate - Correct Answer-B. the APR
TILA requires creditors to maintain records that they complied with the disclosure
requirements for how many years?
A. one
B. two
C. three
D. four - Correct Answer-B. two
Under the FCRA, consumers do NOT have the right to
A. dispute inaccurate information in writing and demand the information be removed
from the credit report.
B. inspect information on their credit reports.
C. receive a free copy of their credit report even if they have not applied for credit.
D. require bankruptcies be removed from their credit report after five years, if credit has
been reestablished. - Correct Answer-D. require bankruptcies be removed from their
credit report after five years, if credit has been reestablished.
Which situation is NOT a red flag that illegal flipping may be taking place?
A. a group of sellers and buyers changing ownership of one property among them
B. an inflated appraisal
C. purchasing and remodeling a house and selling it for a quick profit
D. a series of sales and quick resales - Correct Answer-C. purchasing and remodeling a
house and selling it for a quick profit
A borrower closes a loan with ABC Mortgage. His name is NOT on the National Do Not
Call Registry NOR on ABC's internal do not call list. ABC Mortgage can call the
borrower to solicit new business
A. for up to 3 months from the transaction date
B. for up to 12 months from the transaction date
C. for up to 18 months from the transaction date
D. indefinitely - Correct Answer-D. indefinitely
A borrower reports income of $40,000 from rental properties. How much of that should
be considered when applying for a mortgage loan?
A. 40,000
B. 32,000
C. 30,000
D. 20,000 - Correct Answer-C. 30,000
Under Regulation Z, which advertisement would require full disclosure of credit terms?
A. "Affordable rates available"
B. "Assume loans at 8% interest"
C. "Low down payment"
D. "Zero down" - Correct Answer-B. "Assume loans at 8% interest"
The Privacy Rule of the Gramm-Leach-Bliley Act requires financial institutions to
provide the borrower with a Consumer Privacy policy
A. before disclosing information to non-affiliated third parties
B. each time the servicing is transferred
C. three business days prior to closing
D. within three business days of applying for a loan - Correct Answer-A. before
disclosing information to non-affiliated third parties
If an MLO or a real estate agent engages in the practice of soliciting homeowners in a
particular community to sell their properties because people of other races, religions, or
social status have purchased in the area, they would be guilty of
A. blockbusting
B. fraud
C. redlining
D. steering - Correct Answer-A. blockbusting
A homeowner's house appraises for $125,000. He qualifies for an 85% LTV. He owes
$63,000 on his first mortgage and $5,000 on his second mortgage. He would like to
refinance his house into one mortgage loan and receive additional cash to pay off other
debt. How much cash would be available if his closing costs are $4,200 and are
financed in the loan?
A. 34,050
B. 38,250
C. 43,250
D. 52,800 - Correct Answer-A. 34,050
Which scenario best describes a land contract?
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