Mortgage Loan Originator Federal Mortgage-Related Laws

1.Real estate agent Marisol Vega tells originator Dean Okonkwo she will send him the buyer for 412 Cedar only if Dean pays her $400. Marisol will not take the application, quote rates, or do any other work. What may Dean do?

2.Builder Helen Cho lets originator Chris Dalton sit at her sales trailer. She does no advertising for him. She still invoices $250 each time a buyer at the trailer applies with Chris. How should Chris treat the invoice?

3.Closing attorney Greg Alvarez offers originator Priya Shah $200 of his attorney fee because Priya introduced the borrower. Priya will not draft documents, attend the closing, or check title. What should Priya do?

4.Originator Nora Blake owns part of Linden Title. Before she refers borrower Luis Ortega there, she gives him a written affiliated-business disclosure with her ownership and an estimate of Linden's charge. Luis may pick any title company. Linden does the work, and Nora is paid only her share of profits. What is the result?

5.Owen Grant gives Camille Nguyen the affiliated-business disclosure for his appraisal firm at the time of the referral. The form says the rate lock is cancelled if Camille uses any appraiser outside that firm. Camille wants a different appraiser. What is wrong?

6.Rita Solomon refers borrower Jamal Wright to her spouse's hazard-insurance agency. Jamal pays the agency the next morning. Rita gives him the affiliated-business disclosure three days after that payment. When was the disclosure due?

7.Servicer Harbor Loan writes borrower Elena Petrova on Monday that servicing of her loan will move to North Pier on Friday of that same week. Elena receives the letter Monday. No earlier notice was sent. What is the timing problem?

8.Servicing of Kenji Mori's loan moved from Apex to Brightpath on March 1. On April 10, day 40, Kenji's payment arrives at Apex, his old servicer. Brightpath charges a late fee the same week. What should happen to that fee?

9.Fatima Diallo's transfer notice names the new servicer and a phone number. It does not give the date servicing moves, and it tells her to keep mailing payments to the old address until she hears more. What should the notice have done?

10.Naomi Okada's pension and Social Security disability income cover the payment, and her credit meets the lender's written standards. The underwriter denies the loan because the income is public assistance. What kind of decision is that?

11.Walter Briggs is 68, has full capacity to sign a note, and qualifies for the 30-year loan he asked for under the lender's guidelines. Originator Lena Cho says the lender does not make 30-year loans to applicants over 65. What is the problem?

12.Aisha Rahman's ratios and credit meet every published guideline. The branch manager then cuts her loan amount, gesturing at her headscarf, and says files like hers draw extra conditions. What is that decision based on?

13.Samuel Ike's completed purchase application arrived on March 3. The lender denied it on March 18 and mailed the adverse-action notice on April 20. No other notice went out. Was the notice on time?

14.On June 1 the lender counteroffers a smaller loan to Samir Patel and sends that counteroffer the same day. Samir never accepts it. No adverse-action notice has gone out by September 15. What is overdue?

15.On May 1 Rosa Bennett's application is still missing her income figures, so it is incomplete. By June 15 the lender has sent neither a notice of incompleteness nor an adverse-action notice. What did the lender miss?

16.Yara Mendel applies in person for a loan on the home she will live in. She leaves race, ethnicity, and sex blank and says she would rather not answer. What does originator Paul Adeyemi do with those fields?

17.Sitting across the desk, Carlos Vega declines to state race, ethnicity, and sex. Originator Nina Walsh leaves the boxes empty and writes that he prefers privacy. The loan will be secured by the home Carlos will occupy. What is still required?

18.In a face-to-face meeting, Helen Brooks states her ethnicity and then declines race and sex. Originator Omar Farouk erases the ethnicity she provided and leaves every monitoring box blank. What should he have done?

19.Borrower Gwen Ibarra is reviewing which charge is part of the annual percentage rate on her home loan. The charges are a $2,100 origination fee she pays the lender, a $1,400 owner's title policy, a $475 appraisal, and $2,000 of property-tax escrow. Which charge belongs in the APR?

20.Nate Goldberg's mortgage costs include $186 of prepaid interest, $1,050 of hazard insurance from an insurer he chose, $640 of county recording fees, and a $25 credit-report fee. Which amount is included in the APR?

21.Lila Chen pays a $3,000 broker fee, and the home seller pays $2,400 of discount points on Lila's loan. She also pays a $150 application fee charged to every applicant whether or not the loan closes, plus $900 into insurance escrow. Which item is in Lila's APR?

22.The Ortiz family applies for a loan to buy the house they will live in. The same week a bakery owned by their neighbor applies for a loan to stock flour and ovens, secured by the bakery's equipment. Which loan is covered by TILA?

23.Jonah Hale wants a personal loan to pay off household credit cards. His sister wants a loan to buy a tractor used only on her working farm. Both loans are unsecured. Which loan does TILA cover?

24.Underwriter Sally Pruitt reviews three applications: one to buy a primary home, one to renovate a primary home the borrower already owns, and one to purchase inventory for a hardware store. Which statement is correct?

25.Helena Voss refinances the mortgage on the house she lives in as her primary residence. She signs and receives the cancellation notices on Tuesday. Every weekday is a business day, and no holiday is involved. When does her right to cancel end?

26.Marcus Bell is buying the house he will live in and signs a purchase mortgage on Monday. On Tuesday morning he tells the originator he wants to cancel under the three-day right. What is the result?

27.Priya Raman refinances the loan on her primary home, signs on Wednesday, and receives the cancellation notices that day. The business days that count are Thursday, Friday, and Monday. She sends a cancellation the next Wednesday. What is the status of that request?

28.Victor Lang's loan is a higher-cost mortgage. Closing is set for tomorrow, and he has not completed housing counseling with an approved counselor. The lender wants to close and have him watch a short video later. What is required?

29.Irene Salas is getting a first-lien higher-priced mortgage on her house. No escrow exemption applies. She asks to pay taxes and insurance on her own and skip the escrow account. What does the higher-priced rule require?

30.A higher-cost mortgage offered to Caleb Frost charges a penalty if he pays the loan off in the first two years. He asks whether that penalty can stay in the note. What is the answer?

31.Dana Schultz has a higher-priced mortgage. A licensed appraiser inspected the house and wrote an appraisal three weeks ago. Dana has not received a copy, and closing is in two days. What protection applies?

32.A single loan for Nora Kim would be a higher-cost mortgage. The creditor suggests splitting it into two smaller notes so each note falls below the higher-cost line, while Nora still receives the same money on the same house. What is the effect of the split?

33.Evan Brooks is past due on a $1,500 payment on his higher-cost mortgage. The servicer adds a $150 late fee. The cap on a higher-cost late fee is 4 percent of the overdue payment. Is the $150 fee allowed?

34.Originator Malik Jordan is offered 0.50 percent more pay on each loan he closes above the lender's rate sheet. On a $200,000 loan that higher rate would add $1,000 to his pay. Can the lender pay him that way?

35.A lender pays originator Sofia Marin $1,800 for a 15-year loan and $1,200 for a 30-year loan when the loan amount and every other feature are the same. Sofia asks whether the higher 15-year payment is allowed. What is the answer?

36.Originator Ben Carter earns 1 percent of the loan amount and nothing else. A $250,000 loan pays him $2,500. A $400,000 loan pays him $4,000. The percent does not change with the rate or the term. Is this plan allowed?

37.On Monday, Ruth Keller gives originator Tom Blake her name, Social Security number, monthly income, the property address, and an estimated value. She has not said how much she wants to borrow. Has Tom received a completed application?

38.By Tuesday afternoon, originator Ana Silva has Luis Romero's name, income, Social Security number, property address, estimated value, and the loan amount he wants. The office is open Wednesday, Thursday, and Friday. What is true now?

39.Hannah Brooks emails her name, income, Social Security number, an estimated home value, and the loan amount she wants. On the address line she writes TBD because she has not chosen a house. What is the status of this application?

40.All six application items for Noah Grant arrive on Monday. The office is open Tuesday, Wednesday, Thursday, and Friday. The Loan Estimate goes out on Thursday. How does that timing sit against the 3-business-day rule?

41.Diane Cho's six application items arrive on Monday. The office is open each weekday, and no holiday falls that week or the next. The Loan Estimate is sent the following Monday. Was the estimate late?

42.Consummation of Andre Wallace's loan is set for Friday. He receives the Closing Disclosure on Thursday. Count Monday through Friday as business days, and no holiday is in between. Can Friday's consummation stay on the calendar?

43.Consummation of Maya Chen's loan is Friday. She receives the Closing Disclosure on Monday. Count Monday through Friday as business days. No holiday intervenes. May she consummate on Friday?

44.The Loan Estimate for Gloria Santos used a $310,000 value. The appraisal comes in at $270,000, and the loan amount has to drop. Gloria had qualified at the higher value, which the lender relied on. What may the lender do?

45.After the Loan Estimate, the origination desk decides its $1,295 underwriting fee is too low for the time the file took. Nothing about Peter Alm's income, property, or loan request changed, and Peter did not ask for a change. May the lender raise that fee with a revised Loan Estimate?

46.The Loan Estimate lists a $1,200 origination charge for Paula Greene. The Closing Disclosure lists $1,450. No valid changed circumstance occurred. What is required?

47.Omar Haddad's Loan Estimate shows a $2,000 origination charge. The Closing Disclosure shows the same $2,000. No changed circumstance occurred. How should that charge be judged?

48.The underwriting fee, an origination charge, is $795 on Nina Patel's Loan Estimate and $895 on the Closing Disclosure. She requested no change, and no changed circumstance occurred. What is the status of the extra $100?

49.Elena Vasquez chose a title company from the lender's written list. The Loan Estimate shows recording fees of $180 and that title service at $820. The Closing Disclosure shows recording of $200 and the title service at $880. No other charge is in this 10 percent group. Is the increase allowed?

50.Recording fees and a shopped settlement fee, both in the 10 percent group, total $2,000 on James Okafor's Loan Estimate. He used a provider from the lender's list. Those same charges total $2,350 on the Closing Disclosure. No changed circumstance occurred. What is the result?

51.The only charge in Cody Miller's 10 percent group is a $150 recording fee. At closing the county charges $160. No changed circumstance is claimed. May the extra $10 stand?

52.Felix Nguyen's processing fee, paid to the lender, is $900 on the Loan Estimate and $972 on the Closing Disclosure. That is an 8 percent increase. Nothing in the file changed. He thinks the 10 percent group covers it. Does it?

53.Bianca Moore picks a title insurer that is not on the lender's written list, after the lender allowed her to shop. The title premium rises from $1,100 on the Loan Estimate to $1,400 on the Closing Disclosure. How does tolerance apply?

54.The 10 percent group on Robert Klein's Loan Estimate totals $4,500. He used providers from the lender's list. The same group totals $4,900 at closing. No changed circumstance occurred. Is $4,900 inside the limit?

55.A covered home loan for Alicia Romero is approved. Her manager tells originator Ian Brooks to leave ethnicity, race, sex, and the property's census tract off the HMDA report because the loan funded cleanly. What must Ian do?

56.Originator Grace Kim is assembling the HMDA information on David Cho's covered application. Which set belongs in that report?

57.Nora Ellison's covered application is denied on debt ratios. A coworker says the HMDA register includes funded loans only, so Nora's denial can be left off. What is the correct treatment?

58.The lender denies Patrick Keene because of a score on a consumer report from Northline Credit Bureau. Patrick receives a phone message that says only that credit was too low. No written notice names the bureau. What is missing?

59.Hana Suzuki is denied based on her credit report. The letter tells her to send any dispute about the denial to the bureau, because the bureau made this decision. What is wrong with that instruction?

60.On March 1, Miguel Santos receives an adverse-action notice based on his credit report. The notice says he may request a free copy of that report within 60 days. He requests it on May 12. Is that request inside the 60 days?

61.A fraud alert is on Tara Nguyen's credit report, and the alert lists a phone number to call to verify her identity. Originator Eli Brooks is ready to approve the mortgage today. What should he do first?

62.An extended fraud alert has been on Rafael Ortega's report for two years. It still has 5 years left of its 7-year life. Originator Mei Chen reaches Rafael at the number in the alert and confirms he applied. What may she do next?

63.Samir Haddad's report from bureau A shows a fraud alert with instructions to call him before granting credit. A coworker says to switch to bureau B, which has no alert, and make the loan on that pull alone. What is the proper step?

64.Borrower Kyle Jensen brings $12,000 in cash and asks originator Amy Vogel to write the receipt as two deposits of $6,000 so the cash stays under the form. What should Amy do?

65.Originator Noah Brooks sees pay stubs for Rita Lang that name two different employers on the same dates, and a person who will not sign the note is wiring the entire down payment. Noah suspects fraud. What is the right next step?

66.After trying to hand over $14,000 in cash, Kwame Diallo comes back with $9,400 and says he kept it under $10,000 so the firm would not tell the government. What does that statement mean for originator Sara Quin?

67.Lena Ortiz has just applied, and this is the start of her customer relationship with the lender. The lender collects her income, account numbers, and Social Security number. What privacy step is due?

68.After reading the privacy notice, Miguel Torres opts out of sharing his nonpublic personal information with nonaffiliated third parties for their marketing. A manager wants to sell Miguel's name, income, and loan balance to a kitchen remodeler. What is allowed?

69.The privacy notice lets the lender give a settlement agent the figures needed to close Harriet Boone's loan. A loan officer also wants to send Harriet's income and account numbers to a car dealer to generate leads. What is the difference?

70.On March 1, borrower Ellen Park tells originator Joe Ramirez, Do not call me again. On March 15 Joe calls her with a lower rate he thinks she would want. No emergency is involved. Was the March 15 call allowed?

71.Originator Camille Wright wants to cold-call a homeowner whose number is on the national do-not-call list. The homeowner has never inquired, never applied, and never done business with Camille's firm. May Camille make that sales call?

72.Victor Hale closed his mortgage with the firm 8 months ago, which would otherwise leave an established business relationship. Yesterday he said to take him off the call list and not call again. A new loan program fits him. May the originator call about it?

73.Ad manager Colin Briggs posts a banner that says mortgage rates as low as 2.75 percent, in large type. It does not show an annual percentage rate or any other term. What must the advertisement add?

74.A print ad for originator Holly Grant says $1,150 a month on a $300,000 mortgage, and stops there. It gives no down payment, no number of payments, and no annual percentage rate. What is the problem?

75.Branch manager Iris Boone approves an ad that says only that the bank makes home loans in Greene County. It states no rate, no payment, no down payment, and no term. Which numbers have to be added?

76.Designer Mara Quinn's poster shows 3.25 percent in huge type and, in type that is hard to read along the bottom, 3.91 percent APR. The 3.25 percent is the note rate. Does the APR presentation comply?

77.On-air host Phil Eberle reads an ad that says to ask about a fixed-rate mortgage at 6.125 percent APR. It states no payment, no down payment, no term, and no finance charge. What else must this sentence include?

78.The lender wants to email Paula Erdman's Closing Disclosure. Paula has not consented to electronic records, and she has not shown that she can open the lender's PDF format. What must happen before that email can satisfy the written disclosure?

79.Greg Malloy replies from his phone that he agrees to electronic delivery. The sample PDF will not open on that phone, and he says he has no way to view it. Has he completed E-Sign consent?

80.Last year, Nina Shah consented to electronic delivery and opened the lender's sample. Yesterday she withdrew that consent in writing. A new Loan Estimate is ready today. How can it be delivered?

81.Before any electronic disclosures go out, Jorge Pena reads the consent, opens the lender's sample PDF on his laptop, and sends the confirmation the lender requested. He has not withdrawn consent. The lender then emails his Loan Estimate in that same PDF format. Is the email effective?

82.Before opening the mortgage, the firm has Sonia Reyes's legal name, date of birth, street address, and Social Security number. Her unexpired driver's license matches those facts, and the firm verifies it. What is the customer-identification result?

83.Applicant Benito Cruz gives the name Benito Cruz, a post office box, and a Social Security number. He does not give a date of birth or a street address. He offers no identification document. Can the firm treat identification as complete?

84.The application is in the name Buzz Harmon. The driver's license he hands over says Arthur James Harmon, and he agrees Buzz is a nickname. No other name document is offered. What should the originator require?

85.Mei Lin provides her legal name, a residential street address, and a Social Security number, and each matches her identification document. The date-of-birth line is blank, and she would rather not share it. What is the identification status?

86.Antoine Dubois, who is not a U.S. person, gives his legal name, date of birth, and a residential street address. He has no Social Security number. He provides a passport number and the country that issued the passport, and the firm verifies the passport. What is the result?

87.The original value of Rosa Delgado's home is $250,000. She may request PMI cancellation at 80 percent of original value, and PMI ends automatically at 78 percent. Her balance is $202,000, and she is current. Which threshold has she reached?

88.The original value of Tom Bradley's home is $300,000. He may request PMI cancellation at 80 percent of that value, and PMI ends automatically at 78 percent. He is current. His balance is $237,000. What can he do?

89.The original value of Lila Hoffman's home is $180,000. PMI cancellation may be requested at 80 percent of original value and happens automatically at 78 percent. She is current. The balance is $140,000. What happens?

90.The original value of Amir Nasr's home is $500,000. He may request PMI cancellation at 80 percent of original value, and it ends automatically at 78 percent. He is current and has the payment history the request requires. The balance is exactly $400,000. Which result fits?

91.Denise Carter pays two discount points on a $200,000 loan. One discount point is 1 percent of the loan amount. How much does she pay for the two points?

92.Marcus Webb buys 1.25 discount points on a $350,000 loan. One point equals 1 percent of the loan amount. What is the dollar cost of his 1.25 points?

93.A builder offers to pay half a discount point for Olivia Tran. The loan amount is $180,000. One point is 1 percent of that loan amount. What is half a point in dollars?

94.Hector Salas pays one discount point on a $240,000 loan and tells his brother the point costs $240, one dollar per thousand. One discount point is 1 percent of the loan amount. What does Hector actually pay?

95.Natalie Cho pays 2.5 discount points to lower the rate on a $425,000 loan. One point is 1 percent of the loan amount. What is the cost of the 2.5 points?

96.Each year, Owen Blake's property taxes are $2,400 and his hazard insurance is $1,200. The servicer collects one-twelfth of that yearly total in the escrow account with each mortgage payment. How much is the monthly escrow deposit?

97.Annual property taxes on Gina Flores's home are $6,000 and the annual hazard premium is $1,800. Her monthly escrow deposit is one-twelfth of those yearly bills. Which figure is that deposit?

98.At closing, the servicer sets up an escrow account for Rajiv Shah and says the monthly deposits will pay the county property-tax bill and the hazard-insurance renewal. Rajiv asks whether those deposits are extra interest the lender keeps. What are they?

99.The annual escrow charges for taxes and insurance on Nadine Cole's home are $3,600, so the monthly deposit is $300. The servicer may hold a cushion of up to two monthly deposits. What is the most that cushion can be?

100.Borrower Claire Hudnall asks who writes the rules for the Loan Estimate and Closing Disclosure her originator must use. Those forms carry out RESPA and TILA disclosure requirements. Which agency should the originator name?

101.Consumer Derek Fontana wants to know which agency's rulemaking requires the lender to report HMDA data such as the action taken, the census tract, income, ethnicity, race, and sex. Who is that agency?

102.During a TILA discussion, borrower Angela Weiss points at the annual percentage rate on her mortgage disclosure and asks which agency's rulemaking defines that APR. What is the answer?

103.Tester Leila Nasser asks to see an apartment and is told, after the manager notices her religious head covering, that nothing is available. A later caller with no religious clothing is shown three units. The complaint is housing discrimination. Which agency fits that fair-housing complaint?

104.Carla Diaz is comparing FHA program rules for the mortgage insurance on a loan she may use to buy a home, including what that insurance program requires. She is not asking who wrote the Loan Estimate. Which agency fits?

105.Borrower Scott Emery, whose loan servicing is being transferred, asks which agency's rulemaking requires the servicing-transfer notice that RESPA makes servicers send. Which agency is that?

106.A rental ad says no children, adults only, for a two-bedroom house. Parent June Pelletier, who has a child, wants the agency that handles that fair-housing advertising complaint. Who should she contact?

107.Researcher Tanya Feldman asks which agency writes the rules that say a lender must submit its HMDA data so outsiders can see patterns in home-loan applications and denials. What is the agency?

108.First-time buyer Hugo Lambert asks which agency sets FHA single-family program policy, including the FHA mortgage-insurance program he would use. He is not asking who designs the TILA disclosure forms. Which agency answers?