Federal Mortgage-Related Laws Practice Test

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• If an individual submits false information for the purposes of obtaining a federally covered loan, what could be the potential consequence?
• What constitutes 'redlining' under the Fair Housing Act?
• What is the requirement for lenders regarding Loan Estimates under TILA for closed-end mortgages?
• What is the purpose of an annual escrow analysis?
• What is the primary purpose of the Homeowners Protection Act?
• Which act was modified to include regulations related to high-cost loans?
• Which entity is responsible for enforcing the Truth-in-Lending Act?
• When must loan applicants receive an Adverse Action Notice if they do not qualify for a loan?
• What is the purpose of Regulation B?
• Before selling high-cost mortgages, what must MaxMortgage provide to purchasers?
• What is a "wraparound mortgage"?
• What federal law requires lenders to disclose the cost of credit to consumers?
• What is the deadline for rescission if one co-owner of a property is provided with a Notice of Right to Cancel and the other is not?
• What does DTI stand for in the context of mortgage lending?
• Which of the following actions is required by the Fair Housing Act?
• Which action does TILA require regarding adjustable-rate mortgages?
• What must lenders do under ECOA if they decline a loan application?
• Which of the following payments is a violation of RESPA?
• Which of the following is a requirement of the Equal Credit Opportunity Act?
• An acceptable anti-money laundering program must include all but which of the following elements?
• What is a common characteristic of predatory loans?
• When must a lender advise loan applicants about the status of their application?
• Which key information must be included in a Closing Disclosure?
• What type of counseling must loan originators provide under certain circumstances?
• What consumer protections does the Fair Housing Act provide?
• Under TILA, what is the right of rescission?
• Which of the following documents shows the cost of a loan expressed as an annual percentage rate?
• Under what circumstance can a lender require a borrower to use particular services in an affiliated business arrangement?
• What is a primary purpose of the Truth in Lending Act (TILA)?
• What aspect of predatory lending tactics is notably harmful to borrowers?
• Under TILA guidelines, which of the following disclosures is NOT provided for an adjustable-rate loan?
• What is the "redlining" practice in lending?
• When must the APR be re-disclosed on a loan?
• What does a borrower with a credit score below 580 typically need when working with the FHA?
• If a mortgage professional advertises a loan product at "7.25% APR for the first six months," what additional disclosure does TILA require?
• Which aspect of mortgage origination does the Ability to Repay (ATR) rule address?
• What does the SAFE Act require from mortgage loan originators?
• Which of the following is included when calculating finance charges for a loan?
• If a borrower's loan application is denied due to credit score issues, what must be provided?
• Which statement is NOT true regarding RESPA's requirement to provide a list of homeownership counselors?
• An initial servicing transfer notice must be provided to a borrower at least how many days prior to the transfer of servicing on a loan?
• Which federal law placed significant focus on combating money laundering?
• Which type of loans does RESPA regulate?
• Which of the following is a provision included in the Dodd-Frank Act to aid struggling homeowners?
• What form must borrowers receive that details the specific terms of a mortgage?
• What is one effect of the Fair Housing Act?
• What is the first possible day a cash-out refinance loan could fund after a settlement if the rescission period ends at midnight on Friday?
• The five-year record retention requirement for disclosures made under RESPA is measured from:
• The Gramm-Leach-Bliley Act requires consumers to be given what before their financial information is disclosed?
• The deadline for filing a suspicious activity report is:
• What does it mean to "underwrite" a mortgage?
• RESPA does not apply to which type of loan?
• What is the main role of a mortgage broker?
• How does the CFPB help inform consumers about mortgage lending?
• According to TILA, what margin of error is permitted for the annual percentage rate in a regular fixed-rate mortgage transaction?
• What defines a residential mortgage?
• How long is the required waiting period after providing a Loan Estimate before a borrower can close on a loan?
• Under which condition is it legal for settlement service provider A to pay settlement service provider B a portion of fees charged to a borrower?
• Under which regulation must lenders provide a Closing Disclosure before closing?
• What is the primary purpose of the Home Mortgage Disclosure Act (HMDA)?
• Which key information is included in the Loan Estimate form?
• What does the term "non-QM loan" refer to?
• What is the function of a Good Faith Estimate (GFE)?
• What is a prepayment penalty in mortgage finance?
• Which of the following is defined as the cost of credit expressed as a dollar amount?
• What is the role of the National Mortgage Licensing System (NMLS)?
• What is a common requirement for PMI cancellation as outlined in the Homeowners Protection Act?
• When calculating finance charges in compliance with TILA, which of the following is NOT included?
• An attorney and a lender entered into an agreement in which the attorney's car loan payments are paid by the lender in return for the names of potential loan applicants. Who has violated RESPA?
• Which federal law requires lenders to provide a disclosure of their mortgage lending practices?
• What is the significance of the Mortgage Acts and Practices - Advertising Rule?
• Which federal agency is responsible for enforcing the USA PATRIOT Act?
• What is one of the primary objectives of the Dodd-Frank Act regarding mortgage lending?
• When must a lender provide a Closing Disclosure to the borrower?
• What does RESPA prohibit regarding kickbacks?
• What action is required if a borrower requests specific loan documents?
• Regulations adopted under the USA PATRIOT Act apply to which group?
• What must a financial institution do if they deny a loan application?
• Which federal statute primarily serves to control the settlement costs of residential mortgage loans?
• What is a key requirement of the Truth in Lending Act regarding credit cards?
• Which federal agency has supervisory responsibilities for TILA compliance?
• How often are lenders required to report data according to HMDA?
• What must lenders provide to borrowers within three days of receiving a loan application under RESPA?
• Who must receive a Notice of Right to Cancel in a refinance transaction?
• When rescinding a loan transaction, which days are excluded from the phrase "business days"?
• How many business days prior to settlement can a borrower request a copy of the HUD-1?
• In which section of the GFE and HUD-1 are flood insurance costs included?
• How does federal law define "demographic information" in mortgage applications?
• What must lenders provide to applicants under the ECOA if a loan application is denied?
• The disclosure requirements of RESPA apply to which type of loan?
• What is a “notice of a right to cancel” in mortgage lending?
• What is the primary goal of the Fair Housing Act?
• RESPA is designed to eliminate what in settlement services?
• What is an important feature of a qualified mortgage (QM)?
• What does "adverse action" mean in the context of lending?
• Why did Congress enact the Home Mortgage Disclosure Act?
• When is the Mortgage Servicing Disclosure Statement provided to a borrower?
• Which regulatory factor is primarily aimed at protecting consumers in lending?
• Which type of mortgage is specifically mentioned as being subject to revisions under the Dodd-Frank Act?
• A real estate agent receives a $50 restaurant gift certificate from a mortgage broker. Which law was violated by this transaction?
• Which of the following terms describes the amount a borrower must pay to close a loan?
• Which of the following is NOT a requirement when applying for a loan over the phone?
• What does the Annual Percentage Rate (APR) represent?
• What typically triggers the automatic cancellation of PMI under the Homeowners Protection Act?
• What is one requirement of the Closing Disclosure?
• After taking a loan application over the phone, what must occur within three business days?
• What does the Real Estate Settlement Procedures Act (RESPA) primarily apply to?
• What is the primary purpose of the Truth in Lending Act (TILA)?
• What type of practices are considered predatory lending?
• Which federal law requires originators to use their best judgment in determining demographic information if not voluntarily provided by the borrower?
• Which of the following reasons for denying an applicant a loan violates fair lending laws such as ECOA?
• What is the defining feature of a fixed-rate mortgage?
• What does the acronym "FHA" stand for in the context of mortgage lending?
• According to federal fair lending laws, which fact cannot be considered when qualifying an applicant for a loan?
• What type of disclosure is required for adjustable-rate mortgages (ARMs)?
• How long is the recission period for a refinance transaction if disclosures are provided correctly?
• Under TILA, what must lenders disclose about variable-rate loans?
• Which agency is primarily responsible for enforcing the Fair Credit Reporting Act?
• What does the term “wrapping” mean in mortgage financing?
• Under the Gramm-Leach-Bliley Act, which of the following is considered nonpublic information?
• Which of the following facts about the Settlement Cost Booklet is not true?
• Which of the following best describes the term "conventional loans"?
• Which document outlines the estimated settlement costs for a particular transaction?
• What type of loan is often characterized by deceptive practices targeted at vulnerable borrowers?
• Under the Homeowners Protection Act, when can borrowers request lenders to cancel PMI?
• Which act prohibits discriminatory housing practices?
• If Jack has applied for a refinance, when must the lender provide a copy of the appraisal to him?
• Under the Fair Credit Reporting Act, who is responsible for protecting a consumer's privacy when credit information is reported?
• Which of the following is classified as a protected characteristic under federal law?
• What information must be included in the Loan Estimate given to borrowers?
• What does the MARS Rule prohibit mortgage assistance relief providers from stating?
• Which of the following describes a qualified mortgage under the Dodd-Frank Act?
• Which of the following is NOT a requirement under TILA for advertising a credit product?
• What is the time frame for lenders to provide reasons for a loan denial under ECOA?
• Define "escrow account" in the context of mortgage lending.
• What must servicers include in their PMI cancellation notification?
• What is the maximum late payment fee a lender can charge under TILA?
• According to fair lending laws, which of the following may loan applicants be asked to disclose for HMDA data collection purposes?
• What determines the compliance of loan terms with federal regulations?
• Which of the following is an example of a predatory lending practice?
• Which of the following is not a prohibited misleading statement under the MARS Rule?
• What information would not be included on an Adverse Action Notice provided to Mr. Jones after his loan application was denied?
• What does RESPA stand for?
• Under ECOA, what actions are considered discriminatory?
• In mortgage lending, what does the acronym FCRA stand for?
• On what factor can a lender legally deny an applicant credit?
• In order to satisfy the requirements of the MARS Rule, the disclosures provided with general commercial communications must include a statement that:
• Which of the following provisions is NOT included in the Real Estate Settlement Procedures Act (RESPA)?
• Which scenario would violate Section 8 of RESPA regarding unearned fees?
• Which of the following is NOT included in RESPA regulations?
• What minimum standard for mortgages was established by the Dodd-Frank Act?
• A mortgage broker pays for title services on behalf of a developer. Who has violated RESPA?
• What is the significance of the "loan-to-value ratio" (LTV) in mortgage lending?
• What event did Congress respond to with the adoption of the USA PATRIOT Act?
• What must lenders provide consumers under the Truth in Lending Act (TILA)?
• Under the Dodd-Frank Act, a qualified mortgage is defined by?
• When a borrower uses a mortgage broker to originate his or her loan, who is initially responsible for providing the Good Faith Estimate?
• How long must a borrower typically reside in a property to qualify for a primary residence mortgage?
• What does the FHA require from borrowers in terms of credit history?
• Which of the following is a benefit provided by the Homeowners Protection Act?
• Which agency regulates the advertising and marketing of mortgage products?
• Under the Fair Housing Act, what is prohibited in housing practices?
• What requirement does the "Three-Day Rule" establish in TILA and RESPA?
• Which of the following is included in finance charges?
• What types of transactions did the revised HOEPA provisions extend to as a result of the Dodd-Frank Act?
• When is a borrower eligible to request the cancellation of PMI according to the Homeowners Protection Act?
• What is the aim of the Loan Originator Compensation Rule?
• According to the Homeowners Protection Act, what should happen if a borrower disagrees with the termination of PMI?
• What is the primary purpose of the FHA loan program?
• What does the term "points" refer to in mortgage lending?
• Which of the following fees is NOT included on the Good Faith Estimate?
• What must a lender provide to a borrower concerning the loan terms after they complete a loan application?
• What is one requirement of the Homeowners Protection Act regarding private mortgage insurance (PMI)?
• What is the primary purpose of the Loan Originator Compensation Rule?
• When a borrower asks about the difference between the APR and interest rate in a TIL disclosure, what should the loan originator explain?
• What does LTV stand for in the context of mortgage lending?
• When must the TIL Disclosure be provided to the borrower?
• What does "predatory lending" entail?
• When does ECOA require that you advise the borrower about the status of his/her application?
• Which document discloses the annual percentage rate for a loan to a borrower?
• Which of the following is a reason why the Federal Trade Commission issued the MARS Rule?
• In the context of FHA loans, who is the typical target demographic?
• Under ECOA, when is a notice concerning the right to obtain a copy of the appraisal due to a consumer?
• If a borrower fails to receive notification of PMI cancellation, what action can they take?
• What is the primary purpose of the Truth-in-Lending Act?
• What does "subprime lending" refer to?
• How do predatory loans typically differ from conventional loans?
• Who is responsible for monitoring LTV ratios for PMI cancellation under the Homeowners Protection Act?
• If a loan applicant chooses not to disclose his or her race on a loan application, what recourse does a mortgage professional have?
• How must settlement fees and charges related to a loan transaction be recorded on the HUD-1 Settlement Statement?
• What is a capital improvement in real estate?
• When is private mortgage insurance (PMI) automatically terminated according to the Homeowners Protection Act (HPA)?
• The Fraud Enforcement and Recovery Act was adopted by Congress in 2009 to:
• If a creditor violates ECOA, how many years does a consumer have in which to take civil action?
• How is money laundering best defined?
• What impact does the Credit CARD Act have on mortgage lending?
• Which statement is true regarding Private Mortgage Insurance (PMI)?
• What type of loan transaction requires the disclosure of the Settlement Cost Booklet?
• What is the significance of the Homeowners Protection Act (HPA)?
• Which of the following concepts refers to the unfair rejection of loan applications?
• What is one goal of the Mortgage Disclosure Improvement Act (MDIA)?
• Which federal entity regulates MARS providers?
• A lender is gathering information on loans for the purposes of HMDA reporting. Loans made on which of the following property types may be left out of the lender's reports?
• Which of the following is true about PMI as stated in the Homeowners Protection Act?
• If a mortgage broker decides to use telemarketing to establish leads for loan origination, what must be done?
• What does the Home Mortgage Disclosure Act (HMDA) regulate?
• What are points in mortgage lending?
• Under what condition must the TIL Disclosure Statement be re-disclosed to a borrower?
• Under provisions of the Truth-in-Lending Act, what is the maximum tolerance for an understated finance charge?
• What is the purpose of the Equal Credit Opportunity Act (ECOA)?
• What should a lender do if a loan application is incomplete?
• Which action is NOT required by servicers under the Homeowners Protection Act?
• Which of the following describes an adverse action?
• Which organization conducts investigations related to financial crimes under the USA PATRIOT Act?
• What is the difference between a first and a second mortgage?
• What is the Consumer Financial Protection Bureau (CFPB)?
• What does the term "servicing" refer to in mortgage finance?
• Which law requires lenders to report detailed information about loan transactions and borrower demographics?
• What is a key requirement of the Home Mortgage Disclosure Act (HMDA)?
• What does the wrap-around loan structure involve?
• What obligations do lenders have under the Fair Credit Reporting Act (FCRA)?
• How does the CFPB ensure compliance with federal mortgage laws?
• If a refinance transaction affecting a property is subject to rescission, how many siblings must submit a rescission notice to void the loan?
• What does the MARS Rule say about mortgage assistance providers' right to collect a fee?
• Which of the following actions is strictly prohibited by RESPA?
• Under the Homeowners Protection Act, what happens to PMI when the borrower's loan-to-value (LTV) ratio reaches 78%?
• How often must servicers notify borrowers of their PMI status under the Homeowners Protection Act?
• What information is generally included in a loan estimate provided to borrowers?