11/18/2023

Maryland Mortgage Test

 



NMLS Test  Practice for Maryland

 licensee may not allow any note, or loan contract, mortgage, or evidence of indebtedness secured by a secondary mortgage or deed of trust to:

 

Be signed or executed at any place for which the person does not have a license except at attorney or title company offices.You correctly checked this.

Be signed or executed at any place for which the originator's lender has a branch office.

Be signed or executed at any place for which the person does not have a license

Be signed or executed at the lender's principal office.

A licensee may not allow any note, or loan contract, mortgage, or evidence of indebtedness secured by a secondary mortgage or deed of trust to be signed or executed at any place for which the person does not have a license, except at the office of (1) the attorney for the borrower or for the licensee; or (2) a title insurance company, title company or an attorney for a title insurance company or a title company.


Question 2

Lenders may not require borrowers or title insurance companies to perform a title search as a settlement condition if:

 

Borrower notifies lender within seven (7) business days after loan application of name and address of borrowers choice.You shouldn't have checked this.

Borrower notifies lender within seven (7) days after loan application of name and address of borrowers choice.You should have checked this.

Borrower notifies lender within three (3) days after loan application of name and address of borrowers choice.

Borrower notifies lender within five (5) days after loan application of name and address of borrowers choice.

A lender may not require a borrower or title insurance company to perform a title search, examination of title or closing as a settlement condition if the borrower notifies the lender within 7 days after the loan application of the name and business address of the borrower's choice.


Question 3

Any lender, his officer or employee and any other person who willfully violates state and federal law is guilty of a misdemeanor and on conviction is:

 

Subject to a fine not exceeding $1,000 per violation.

Subject to a fine not exceeding $5,000 or imprisonment not exceeding one year or both.

Subject to a fine not exceeding $1,000 or imprisonment not exceeding one year or both.You correctly checked this.

Subject to criminal penalties and imprisonment up to five years.

A person who violates any State or Federal law in the state of Maryland is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding one year or a fine not exceeding $1,000 or both.

Score: 100%

Question 4

Lender inspection fees are permitted under the following circumstances:

 

To support real estate appraiser's independent estimate of value.

To establish existence of real property for documentation when using local tax base to establish value.

To verify that a house is actually located on the property.

To determine completion of new home construction and to verify completion of repairs required by lender as a condition of approval.You correctly checked this.

Lenders are not allowed to impose inspection fees except when needed to determine completion of: (1) construction of a new home; or (2) repairs, alterations or other work required by the lender.


Question 5

Loan Origination fees are permitted in Maryland subject to certain restrictions which include:

 

$1,000 or 10% of net proceeds of a commercial loan of $75,000 or less or $500 of 10% of net proceeds of any other loan made.

$500 or 10% of net proceeds of a residential mortgage loan of $75,000 or less or $250 or 10% of net proceeds of any other loan made.

$500 or 10% of net proceeds of a commercial loan of $75,000 or less or $250 or 10% of net proceeds of any other loan made plus commission, finder's fees, points.You shouldn't have checked this.

$500 or 10% of net proceeds of a commercial loan of $75,000 or less or $250 or 10% of net proceeds of any other loan made.You should have checked this.

A lender may collect a loan origination fee for making a loan subject to the following restrictions: (1) the aggregate amount of the loan origination fee imposed by a lender - when combined with any finder's fee imposed by a mortgage broker may not exceed: (a) $500 or 10% of the net proceeds of a commercial loan of $75,000 or less; or (b) $250 or 10% of the net proceeds of any other loan; (2) a lender may not collect from the borrower any other commission, finder's fee or points for obtaining, procuring or placing a loan; (3) Origination fees are not permitted on secondary market purchase loans compliant to Federal Agency investors including but not limited to GNMA, FNMA, FHLMC, the Federal Reserve Bank and the Farmers Home Administration.


When the Commissioner investigates complaints brought by parties aggrieved by the licensee, the licensee will:

 

Pay to the Commissioner a per-day fee set by the Commissioner for each of the Commissioner's employees engaged in the investigation.You should have checked this.

Pay to the Commissioner full reimbursement for State employees engaged in the investigation.

Pay to the Commissioner an upfront fee of $2500 plus a per-diem fee set by the Commissioner for each of the Commissioner's employees engaged in the investigation.You shouldn't have checked this.

Pay a flat fee of $5,000 to the Commissioner to cover costs of the state's investigation and examination.

Any person aggrieved by the conduct of a licensee in connection with a mortgage loan may file a written compliant with the Commissioner who shall investigate the compliant. A licensee shall pay to the Commissioner a per-day fee set by the Commissioner for each of the Commissioner's employees engaged in any examination or investigation conducted.


Question 2

Upon issuance of a "Cease and Desist Order" by the Commissioner, the licensee may be required to:

 

Terminate employment of the employee who committed the violation thereby eliminating the source of the violation.

To cease and desist from violation and take affirmative action to correct the violation including the restitution of money or property to any person aggrieved by the violation.You correctly checked this.

Terminate employment of the employee who committed the violation, thereby relieving the lender of liability.

To cease and desist from the violation and any further similar violations.

Upon issuance of a "Cease and Desist Order" by the Commissioner, the licensee may be required to cease and desist from the violation and any further similar violations and take affirmative action to correct the violation including the restitution of money or property to any person aggrieved by the violation.


Question 3

Any unlicensed person who is not exempt from licensing who makes or assists a borrower in obtaining a mortgage loan in violation of Maryland mortgage law may collect:

 

The principal amount of the loan only and must reimburse the borrower all fees and charges collected by the unlicensed person plus rebate 15% of interest charges previously collected.

The principal amount of the loan and any interest, costs, finder's fees, broker fees, or other charges with respect to the loan.

Any interest, costs, broker fees, or other charges with respect to the loan.

The principal amount of the loan and may not collect any interest, costs, finder's fees, broker fees, or other charges with respect to the loan.You correctly checked this.

Any unlicensed person who is not exempt from licensing and who assists a borrower in obtaining a mortgage loan may collect only the principal amount of the loan and may not collect any interest, costs, finder's fees, brokers fees or other charges with respect to the loan.

Question 4

Exempted institutions employing Registered Mortgage Originators are:

 

Relieved of any responsibility required by federal or state rules, laws, or regulations governing mortgage lending in the State.

Compliant to federal and state mortgage rules, laws, or regulations and receive exemptions from certain penalties established by the Commissioner's Office.

Relieved of responsibility required by state rules, laws, or regulations governing mortgage lending in the State; but not relieved from Federal regulation and statutes.

Not relieved of any responsibility required by federal or state rules, laws, or regulations governing mortgage lending in the State.You correctly checked this.

The employment of a mortgage originator licensed under Subtitle 6 Mortgage Originator Law by a mortgage lender does not relieve the mortgage lender of a responsibility for ensuring that their employees follow all rules, regulations and laws governing mortgage lending in Maryland.


Question 5

Any Mortgage Loan Originator who willfully violates Maryland regulation/law is guilty of a felony and:

 

On conviction is subject to a fine not exceeding $25,000 plus full restitution to aggrieved party or imprisonment not exceeding 10 years.

On conviction is subject to a fine not exceeding $25,000 or imprisonment not exceeding 5 years or both.You correctly checked this.

On conviction is subject to a fine not exceeding $50,000 or imprisonment not exceeding 5 years or both.

On conviction is subject to a fine not exceeding $50,000 or imprisonment not exceeding 10 years or both.

Any mortgage loan originator who willfully violates any provision, rule or regulation of mortgage lending law in Maryland is guilty of a felony and, on conviction, is subject to a fine not exceeding $25,000 or imprisonment not exceeding 5 years or both.


In cases where lenders are allowed by law to collect a delinquent charge, the borrower must, among other things, have been delinquent for a least:

 

30 calendar days.

28 business days

15 business days

x  15 calendar days

If a loan contract provides for a delinquent (or late charge), this may be collected and will not constitute interest. A delinquent charge of the greater of $2 or 5 percent of the total amount of any delinquent or late periodic installment of principal and interest may be levied if 1) the delinquency has continued for at least 15 calendar days; and 2) a delinquent or late charge has not already been charged for the same delinquency.


Question 2

Under Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law, when a loan is secured by a certificate of deposit held by the borrower, a lender may charge interest in excess of the rate payable on the certificate of deposit. However, the rate set by the lender can not exceed the rate payable on the certificate by more than:

 

1.5 percentage points

1 percentage point

0.5 percentage point

2 percentage pointsYou correctly checked this.

Under Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law, when a loan is secured by the pledge of collateral which is a certificate of deposit held by the borrower, the lender may charge interest at a rate not to exceed 2 percent in excess of the rate of interest payable on the certificate of deposit.


Question 3

A lending institution which lends money secured by a first mortgage on any interest in residential real property and creates an escrow account in connection with that loan will pay interest to the borrower on the funds in the escrow account:

 

Every 6 months

Every month

Every 12 monthsYou correctly checked this.

Every week

A lending institution which lends money secured by a first mortgage or first deed of trust on any interest in residential real property and creates or is the assignee of an escrow account in connection with that loan will pay interest to the borrower on the funds in the escrow account at the greater of: (i) a rate of 3 percent per annum simple interest; or (ii) the rate of interest regularly paid by the lending institution on regular passbook savings accounts. Interest on these funds will be (i) computed on the average monthly balance in the escrow account; and (ii) paid annually to the borrower by crediting the escrow account with the amount of interest due. In addition, the lending institution will annually provide the borrower with a statement of the escrow balance.

Question 4

A lender who receives scheduled monthly periodic payments on more than five loans secured by an interest in real property must provide the borrower, at given intervals, a written statement informing the borrower of the following except for:

 

The payments received to cover insurance policiesYou should have checked this.

The payments received towards reducing the principal

The principal balance which remains to be paid

The payments received towards the interest dueYou shouldn't have checked this.

Under Title 12, Subtitle 1 (§ 12-106) of Maryland Commercial Law, at least annually and, on request of the borrower, at any other reasonable time or interval, a lender who receives scheduled monthly periodic payments on more than five loans secured by an interest in real property will furnish to the borrower a written statement informing the borrower of the amount of: 1) the payments credited to reducing the principal; 2) the payments credited to interest as defined in this subtitle; and 3) the remaining unpaid principal balance.


Question 5

In the case of a commercial loan not secured by residential real property, lenders may charge interest at any rate under Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law provided the loan is in excess of:

 

$15,000You correctly checked this.

$25,000

$75,000

$55,000

Under Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law, lenders may charge interest at any rate if a loan is: 1) a loan made to a corporation; 2) a commercial loan in excess of $15,000 not secured by residential real property; or 3) a commercial loan in excess of $75,000 secured by residential real property. Commercial loans to individuals secured by residential real property must comply with the provisions of § 12-407.1.