National Mortgage Loan Originator Review Crammer (ml) Ethics

Transcription

1 Course: Lesson: National Mortgage Loan Originator Review Crammer (ml) Ethics 1. In a real estate ad for mortgage financing, which statement is permissible if no other information is given? A. Interest rate only 9%! B. Liberal terms available to qualified buyer. C. Monthly payment only $400! D. Two thousand dollars down. 2. Which act was passed to address the illegal practice of redlining? A. Community Reinvestment Act B. Fair and Accurate Credit Transaction Act C. Financial Modernization Act D. Homeowners Protection Act 3. Which would NOT be considered a RESPA violation? A. You pay for all the advertising for your favorite real estate agent to keep the referrals coming in. B. Your favorite lender gives you a travel mug with their logo on it. C. Your favorite title company rents a desk to close your loans at $150 per closing. D. Your primary lender takes you on a weekend golf trip, all expenses paid, if you close 10 loans in a month with them. 4. Mortgage broker Carrie was eager to finish up with a customer so that she could make her massage appointment. She was sure that the terms of the loan were right for the customer, but still, the customer felt pressured to sign papers without feeling as though he truly understood all of the terms. This might best be described as B. constructive fraud. C. mortgage fraud. D. negligence. 5. To address the problem of property flipping, appraisers must analyze the transfer history

2 of a property for the previous A. three months. B. one year. C. eighteen months. Course: Lesson: D. three years. National Mortgage Loan Originator Review Crammer (ml) Ethics 6. Which is NOT a triggering term according to TILA, requiring additional disclosing in advertising? A. 360 easy payments B. $3,000 down C. Pay only $800 per month D. Terms to fit your budget 7. The Fair Housing Act requires lenders to display what in all branch offices? A. a business brochure B. the Equal Housing Lender Poster C. a list of rights under the Fair Housing Act D. a summary of the Fair Housing Act 8. When an appraiser gives a loan officer what s needed on the appraisal report, the consumer usually ends up A. borrowing too much on the property. B. not being able to sell the property. C. paying more discount points at closing. D. refinancing the property. 9. In a fraud for property scheme, it is likely that A. the borrower doesn t intend to repay the loan. B. the borrower seeks ownership.

3 C. a group of individuals is colluding to gain from the scheme. D. illegal property flipping occurs. 10. Ted, a mortgage broker, convinced Alice to refinance her home again, promising her a lower interest rate. Afterwards, Alice realized no benefit. In fact, her interest rate went up. This lending practice is known as A. equity flipping. B. home flipping. C. loan flipping. Course: Lesson: D. property flipping. National Mortgage Loan Originator Review Crammer (ml) Ethics 11. A lender who does not cancel PMI when the LTV reaches 78% is in violation of which federal law? A. ECOA B. Fair Housing Act C. Home Ownership and Equity Protection Act D. Homeowners Protection Act 12. Loans that take advantage of poorly informed consumers through excessively high fees, misrepresentation of loan terms, and frequent refinancing that does not benefit the borrower is A. illegal underwriting. B. ineffective lending. C. mortgage lending. D. predatory lending. 13. Under Regulation Z, which advertisement would require full disclosure of credit terms? A. Affordable rates available B. Assume loan at 8% interest C. Low down payment D. VA financing

4 14. Mortgage broker Dave knew that his customer worked at a factory that was two weeks away from closing, but in his eagerness to close the deal, he decided to ignore that fact. This might be considered an example of B. constructive fraud. C. good business. D. negligent misrepresentation. 15. Mortgage broker Dave works with his appraiser friend to get an inflated value on a house. He then recruits his cousin Bob, who has great credit, to apply for a mortgage on the property, even though Bob is moving to Belize and has no intention of paying off the loan. In this case, Bob could be considered a buyer. A. colluded B. forged C. mock D. straw Course: National Mortgage Loan Originator Review Crammer (ml) Lesson: Ethics

5 You have not successfully completed the exam Score Required: 75 Exam Score: 20 Attempt: 37 of Unlimited X 1. In a real estate ad for mortgage financing, which statement is permissible if no other information is given? A. Interest rate only 9%! B. Liberal terms available to qualified buyer. The Truth in Lending Act requires that advertising with certain triggers about the loan terms include more complete information about the loan. A generic statement would not trigger the need for additional disclosure. [R445] 2. Which act was passed to address the illegal practice of redlining? Score: 1.00 A. Community Reinvestment Act A. Community Reinvestment Act Among other things, the Community Reinvestment Act was intended to eliminate the practice of redlining by requiring lenders to make loans in the neighborhoods in which they do business. [R483] X 3. Which would NOT be considered a RESPA violation? A. You pay for all the advertising for your favorite real estate agent to keep the referrals coming in. B. Your favorite lender gives you a travel mug with their logo on it. A thing of minimal value used in the course of sales such as pens, mementos, coffee cups hats, etc. is permissible, but the other three arrangements could be considered violations of RESPA. To violate RESPA, the thing of value does not have to be money. [R500] X 4. Mortgage broker Carrie was eager to finish up with a customer so that she could make her massage appointment. She was sure that the terms of the loan were right for the customer, but still, the customer felt pressured to sign papers without feeling as though he truly understood all of the terms. This might best be described as D. negligence. Negligence is breach of legal duty resulting from carelessness, recklessness, or incompetence. Carrie s actions, while not fraudulent, probably contribute to the public s distrust of the mortgage industry. [R451] X 5. To address the problem of property flipping, appraisers must analyze the transfer history of a property for the previous

6 A. three months. D. three years. Appraisers are required to analyze the purchase contract, current listing, and recent prior sales for the past three years. As well, the URAR form asks for research of the subject s transfers from three years prior to the effective date of the appraisal. [R467] X 6. Which is NOT a triggering term according to TILA, requiring additional disclosing in advertising? A. 360 easy payments D. Terms to fit your budget Generic statements that do not state specific loan information are exempt from additional disclosing of referencing specific information concerning loan terms. [R490] X 7. The Fair Housing Act requires lenders to display what in all branch offices? A. a business brochure B. the Equal Housing Lender Poster The Equal Housing Opportunity Act requires only the displaying of the Equal Housing Lender Poster, which indicates to the public that the lender is governed by the Fair Housing Act. There is no requirement that the advertising for that lender be displayed in the branch office. [R460] 8. When an appraiser gives a loan officer what s needed on the appraisal report, the consumer usually ends up Score: 1.00 A. borrowing too much on the property. A. borrowing too much on the property. X 9. In a fraud for property scheme, it is likely that The cooperation between the appraiser and the loan officer in giving what s needed on the appraisal report leads to the consumer borrowing too much, resulting in an upside-down loan. [R482] A. the borrower doesn t intend to repay the loan. B. the borrower seeks ownership. In fraud for property, it is likely that the only perpetrator is the borrower who seeks housing and/or cash from the loan. In addition, this fraud involves a single loan in which the borrower intends to repay. [R444] X 10. Ted, a mortgage broker, convinced Alice to refinance her home again, promising her a lower interest rate. Afterwards, Alice realized no benefit. In fact, her interest rate went up. This lending practice is known as

7 A. equity flipping. C. loan flipping. Loan flipping involves refinancing over and over again, usually with no benefit to the borrower in terms of lowering the interest rate or saving fees. The borrower is promised benefits that never materialize. Since the lender profits every time a loan is made, there is no incentive for the lender to recommend otherwise. Often, the refinancing actually raises the interest rate to the borrower. [R456] X 11. A lender who does not cancel PMI when the LTV reaches 78% is in violation of which federal law? A. ECOA D. Homeowners Protection Act Homeowners Protection Act forces a lender to cancel the PMI when the LTV reaches 78% during normal amortization of the loan. The borrower can request it be canceled at 80%. [R428] X 12. Loans that take advantage of poorly informed consumers through excessively high fees, misrepresentation of loan terms, and frequent refinancing that does not benefit the borrower is A. illegal underwriting. D. predatory lending. Predatory lending involves loans that take advantage of illinformed consumers through excessively high fees, misrepresented loan terms, frequent refinancing that does not benefit the borrower, and other prohibited acts. [R450] X 13. Under Regulation Z, which advertisement would require full disclosure of credit terms? A. Affordable rates available B. Assume loan at 8% interest Regulation Z requires that once you state any type of credit terms in advertising, such as 8% interest, you must disclose all finance charges and total annual percentage rate (APR). [R468] 14. Mortgage broker Dave knew that his customer worked at a factory that was two weeks away from closing, but in his eagerness to close the deal, he decided to ignore that fact. This might be considered an example of Score: 1.00 If Dave made the decision to ignore a critical fact, he could be accused of actual fraud. [R452] X 15. Mortgage broker Dave works with his appraiser friend to get an inflated value on a

8 house. He then recruits his cousin Bob, who has great credit, to apply for a mortgage on the property, even though Bob is moving to Belize and has no intention of paying off the loan. In this case, Bob could be considered a buyer. A. colluded D. straw Mortgage insiders commit mortgage fraud when they knowingly make loans to unqualified buyers, or straw buyers, who will never make a payment on the loan. [R453] Back