Term
A loan with a temporary buydown is classified as which of the following:
A. A fixed rate loan.
B. A conventional loan
C. A nontraditional loan
D. A conforming loan |
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Definition
| C. A nontraditional loan because it has different interest rates. |
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Term
When can the interest that a lender charges be deducted from a tax return?
A. At the inception of the loan
B. After the first complete year of the loan term
C. When the loan principal and interest are repaid
D. Interest is not deductible on a reverse mortgage. |
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Definition
C. When the loan principal and interest are repaid.
Kind of a "duh" answer. |
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Term
All of the following are true regarding actuarial life expectancy of reverse mortgages except,
A. the actuarial life expectancy of the consumer should be calculated as his or her latest birthday.
B. Two years is the assumed loan period.
C. In the case of multiple borrowers, the actuarial life expectancy is based on the life of the oldest borrower
D. Actuarial life expectancy is to be multiplied by a factor of 1.4 and rounded to the nearest full year. |
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Definition
| C. It makes sense because it would naturally be based on the youngest borrower, but D doesn't make much sense to me. |
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Term
What is FHA's definition of the maximum claim amount for a HECM?
A. Greater of the appraised value or sales price.
B. Lesser of the appraised value or sales price.
C. National minimum loan limit established by Freddie for a one family residence
D. 80% of market value according to a HUD-approved appraiser. |
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Definition
B.
I put C.
This question is lacking a little bit. |
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Term
Which of the following is the best statement regarding a straight term mortgage?
A. Payments are made to interest only
B. No principal payments are being made. |
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Definition
| B. "This is all we know for sure, interest may be paid or it may be accruing. This is based on agreement" |
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Term
| At what point in time is a bridge mortgage paid off? |
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Definition
When the second loan is taken out...
That would make sense wouldn't it? |
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Term
With an easy qualifier loan, the lender typically modifies the terms of the loan based on which of the following?
A. The economy
B. The cost of funds
C. Customer Needs
D. Lack of down payment |
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Definition
C. Customer needs.
Think about it, customer needs is what generally creates the need for such an instrument. |
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Term
Which of the following statements is FALSE regarding interest only loans.
A. The loan balance never decreases throughout the term.
B. Paying accrued interest means paying interest in advance
C. Paying interest only decreases monthly payments significantly
D. The balloon payment on an interest only loan is the original amount. |
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Definition
| B. I put C because I was thinking about the principal, not the monthly payments. |
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Term
All of the following are true statements about a Reduction Option Mortgage EXCEPT.
A. It is a fixed rate loan
B. It is an ARM with an option to convert to a fixed rate.
C. The borrower does not have to pay appraisal fees or credit checks.
D. Any of the above. |
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Definition
B.
I knew that. I'm annoyed at myself. |
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Term
Regarding a loan, the term "principal" means closest to which of the following.
C. The amount originally borrowed.
D. The amount owed on the loan at any given time, excluding interest. |
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Definition
| C. The amount originally borrowed. |
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Term
All of the following are true regarding points except.
A. A point is one percent of the loan amount.
B. A point is always a fee paid for services rendered.
C. A point may be charged for any reason.
D. A point is often a discount point to buy down the interest rate. |
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Definition
B.
It can also be a discount point, which is not considered a fee paid for service actually rendered. |
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Term
All of the following statements about regulation Z required disclosures are true EXCEPT
A. Any ad that uses the APR does not have to disclose other items.
B. Required disclosures must be made clearly and conspicuously
C. If an ad discloses only the APR, additional disclosures are not required.
D. None of the above. |
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Definition
A. I put D. This is a ridiculous question.
Note: Pay attention if you think the question is giving the same answer twice. It probably isn't. |
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Term
According to Regulation Z, and for advertising closed-end credit, if an ad for a first lien mortgage states the amount of any payment, which of the following is correct:
A. The payment must state PITI
B. The ad must state with equal prominence that the payment does not include taxes and insurance.
C. The ad must state, but not with equal prominince that the payment does not include taxes and insurance.
D. The actual payment amount may be different. |
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Definition
| C. I did not know that. Good to know. |
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Term
According to TILA on closed-end credit regarding a non-variable rate loan, all of the following are true EXCEPT
A. The payment cannot increase
B. The term "fixed" in reference to a payment must state the time period for which a payment is fixed.
C. There must be a statement in the ad that the payment will increase after a certain period of time if that's the case.
D. The rate cannot increase. |
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Definition
A. The payment cannot increase.
The payment can increase in the case of acceleration. |
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Term
According to TILA on closed-end credit, if an ad references both variable and non-variable rate loans, all of the following statements are true except.
A. It would be a violation of TILA to reference both variable and non-variable rate loans in one ad.
C. In an ad that references both variable and non-variable rate loans, the term "fixed" must refer only to transactions with fixed rates. |
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Definition
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