1
Which of the following scenarios would MOST
LIKELY indicate income misrepresentation may be occurring and require
additional investigation/verification?
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The borrower's
paystubs reflect accurate withholding amounts |
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The borrower's prior year's earnings and withholding
are all even dollar amounts |
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The borrower is
self-employed |
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The borrower has a
history of working two jobs |
2
If an event occurs in the 30-day period after consummation
that causes the Closing Disclosure to become inaccurate with a change to costs
incurred by the consumer, the creditor must re-issue a corrected Closing
Disclosure within:
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30 days of learning of the change |
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10 days of
learning of the change |
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15 days of
learning of the change |
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45 days of
learning of the change |
3
What is the maximum allowable late charge that can be assessed to a borrower on an FHA loan when the borrower's payment is received
more than 15 days after the due date?
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5% of the overdue
principal and interest payment |
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4% of the overdue principal and interest payment |
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Late fees are not
allowed on FHA loans |
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2% of the overdue
principal and interest payment |
4
Which of the following
statements is TRUE regarding the valuation provisions of the HPA when the
borrower requests cancellation of PMI?
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The borrower must receive a copy of any valuation
ordered by the creditor |
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The borrower must
order an appraisal from an appraiser of his or her choosing |
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The creditor is
not permitted to require a valuation of the property |
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The creditor must
pay for any valuation it wishes to use |
5
A consumer
is purchasing a home where the seller has been on title for less than 90 days.
The purchase will be financed with a higher-priced mortgage loan that is not a
Qualified Mortgage. A second appraisal will be required if the new sales price
exceeds the seller's acquisition cost by more than:
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10% |
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50% |
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30% |
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20% |
6
A Qualified Mortgage is:
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All of the above |
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A loan with
characteristics that make it more likely borrowers will be able to make their
payments |
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A loan that avoids
negative amortization |
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A category of
loans that have certain, more stable features |
7
What is the proper
course of action if you discover that your borrower has provided you with a
paystub containing misrepresentation?
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Tell the applicant
you've uncovered the misrepresentation and demand money to not report the
incident |
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See if the loan
can close without using the income from that applicant and, if so, discard
the paystub and proceed |
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Gather all documentation and bring it to the person
in your company responsible for suspicious activity reporting |
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Immediately accuse
your borrower of fraud and call the FBI |
8
Under the automatic
termination provisions, as long as the borrower is current on their loan the
servicer must cancel PMI when the loan reaches _______ of the original value
based on the amortization schedule.
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75% |
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50% |
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80% |
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78% |
9
Under the
provisions of the HPA, when must the INITIAL PMI disclosure be provided to the
borrower?
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Before the first
payment is due on the loan |
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Within three
business days of application |
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Before the PMI
payment plan is selected by the applicant |
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At closing/consummation of the loan |
10
Which of the
following statements is TRUE regarding a borrower whose tax returns show rental
income on a property listed as a second home?
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Second homes are
treated identically to investment properties and therefore rental income
should generally be present |
|
This is always
fraudulent because second homes can never be rented out |
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The borrower is
not permitted to own more than two properties if there is any rental income
listed for a second home |
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Rental income on a second home is not an indicator of
misrepresentation as long as the borrower occupies the property for some
portion of the year |
11
If a borrower
sells their home within 9 years of purchase and realizes a gain from the sale
of the home, a portion of the Mortgage Credit Certificate benefit may be
subject to:
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Luxury tax |
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Transfer tax |
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Recapture tax |
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Property tax |
12
Which of the following fees may a creditor charge to
a loan applicant prior to delivery of a Good Faith Estimate or a Loan Estimate
(whichever form applies to a given transaction) and receiving the borrower's
intent to proceed?
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An application fee |
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A credit report fee |
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An appraisal fee |
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No fees may be
charged prior to delivery |
13
Money given to someone
by a government or a non-profit organization to be used for a specific purpose,
such as purchasing a house is referred to as a:
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Grant |
|
Loan |
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None of these |
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Donation |
14
The maximum penalty for
mortgage fraud under Federal statute is up to ______________ in fines and
_____________ years in prison.
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$500,000 / 25 |
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$150,000 / 10 |
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$1,000,000 / 30 |
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$25,000 / 3 |
15
In mortgage fraud, a
"material fact" is one that is:
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All of these |
|
Relevant |
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Essential |
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Important |
16
Which of the following scenarios regarding asset statements is a
potential red flag for misrepresentation?
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An applicant with
a bank balance that seems to be too large for their salary level |
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Bank balances end
in even dollar amounts for consecutive months |
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All of these |
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Dates of bank
statements are out-of-sequence |
17
Which of the following restricts access to an individual's
credit report and will not allow a potential creditor to access it unless and
until the individual contacts the credit bureau to provide authorization?
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A deed-in-lieu |
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A fraud alert |
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A credit freeze |
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A 1003 |
18
Once a creditor has obtained all the information it
normally considers in making a credit decision, the application is considered
complete and the creditor has 30 days in which to:
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Provide an underwriter with the file. |
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Originate a loan. |
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Run a credit report. |
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Notify the applicant of a
credit decision. |
19
When reviewing an
appraisal, an underwriter would generally expect the subject property's
indicated value to be _________ the sale prices for all of the comparable
sales. If it is not, this is a red flag for potential fraud or
misrepresentation that should be addressed.
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lower than |
|
bracketed by |
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equal to |
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higher than |
20
If a loan is a Qualified Mortgage, it is assumed that the
lender followed:
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RESPA |
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The Ability-to-Repay rule |
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The HMDA
requirements for small creditors |
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All of the
requirements in TILA |
21
Since January 1, 2014, lenders are required to make a
good-faith effort to:
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Determine that
borrowers have sufficient rental references |
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Send all
application documents electronically |
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Send the borrower
a Loan Estimate within three days of application |
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Determine that borrowers have the ability to repay a
mortgage loan before credit is extended |
22
Which of the
following borrowers may benefit from non-QM loans?
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Real estate
investors |
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All of these |
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Foreign nationals |
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Self-employed
borrowers |
23
If neither the automatic termination nor the
borrower-requested termination provisions of the HPA are met, when is the
latest that PMI would be required to terminate on a loan subject to the Act?
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At the midpoint of the amortization schedule |
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The servicer may elect to keep PMI coverage in force for the life of the loan. |
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When the loan has
been paid down to 67% LTV |
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When the loan
enters its 17th year |
24
With the most recent amendments to the Qualified Mortgage rule,
the 43% debt-to-income ratio limit was replaced by a:
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Price-based threshold using the APOR |
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Loan amount
restriction |
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Requirement that
all applicants go to HUD counseling |
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Prohibition on all
ARM loans |
25
In order to rise to the level of mortgage fraud, any misstatement
or omission must be ____________ to
the transaction.
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Material |
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Irrelevant |
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None of these |
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Extraneous |
26
The two categories of mortgage fraud are called:
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Manipulative fraud
and coercive fraud |
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Fraud for housing and fraud for profit |
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Constructive fraud
and ex post facto fraud |
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Serial fraud and
opportunity fraud |
27
Which of the following loans on a one-unit primary residence
would NOT be subject to the provisions of the
Homeowners Protection
Act?
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A jumbo ARM loan |
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An FHA loan |
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A loan with
negative amortization |
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A loan sold to
Fannie Mae or Freddie Mac |
28
If all of the requirements for borrower-requested cancellation
under the HPA have been met,
the servicer cannot require further PMI payments from the borrower after:
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15 days |
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30 days |
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3 business days |
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60 days |
29
Housing is
considered to be affordable when a family's housing expense does not exceed
what percentage of its gross monthly income?
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50 |
|
30 |
|
12 |
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43 |
30
Which of the following is NOT an example of an adverse
action?
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The lender offers
a loan with a different payment duration than requested. |
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The lender agrees to fund the loan as requested. |
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The lender offers
a loan with a different interest rate than requested. |
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The application is
denied. |
