NMLS SAFE ACT MLO - Ethics and Fraud 2023/2024 Practice Study Guide Questions with Distinction level Marking scheme
The APR (annual percentage rate) is the cost of credit that consumers pay, expressed as a simple annual percentage. If the ad only states the APR, then other disclosures are not ne...
NMLS SAFE ACT MLO - Ethics and Fraud
2023/2024 Practice Study Guide Questions
with Distinction level Marking scheme
The APR (annual percentage rate) is the cost of credit that
consumers pay, expressed as a simple annual percentage. If the
ad only states the APR, then other disclosures are not necessary.
Some common types of legal transactions that require appraisals
are:
A. All of the other options require appraisals
B. Income tax casualty losses, estate or inheritance tax, and
property settlement upon divorce.
C. Damage lawsuits, loan foreclosures, and security for bail
bonds.
D. Company liquidation or merger, capital gains tax basis, and
loan foreclosures. - correct answer A. All of the other
options require appraisals
The above items all require an appraisal.
What word best describes a group of participants working
together to commit single acts of mortgage fraud?
A. representation
B. collusion
C. discernment
,D. omission - correct answer B. collusion
Collusion is when a group of participants for example,
appraisers, title companies, real estate agents, mortgage brokers
or lenders, or even lawyers all work together to commit single
acts of fraud.
What kind of mortgage would give Cathy deferred interest
payments for the first two years, anticipating that her salary
would increase?
A. Full amortization
B. Non amortization
C. Partial amortization
D. Negative amortization - correct answer D. Negative
amortization
Negative amortization is A situation in which a borrower is
paying less interest than what is actually being charged for a
mortgage loan. The unpaid interest is added to the loan's
principal.
Which of the following methods of disclosure does NOT meet the
requirements of the Equal Credit Opportunity Act (ECOA)?
A. Hand written note
B. Telephone
C. Posted Letter
,D. e-mail - correct answer B. Telephone
Enacted in 1974, the Equal Credit Opportunity Act, or ECOA,
seeks to ensure that non-credit-related factors, such as a
person's race, national origin, or sex, do not enter into a decision
to deny a person's request for credit.
The lender collects and holds taxes in what type of account?
A. Trust
B. Savings
C. Escrow
D. Checking - correct answer C. Escrow
The TILA requires full disclosure statements that outline all------
terms in simple easy-to-read language
A. credit
B. debit
C. loss
D. debt - correct answer A. credit
The sole purpose of TILA is to promote the informed use of
consumer credit, by requiring disclosures about its terms, cost to
standardize the manner in which costs associated with borrowing
are calculated and disclosed. TILA also gives consumers the right
to cancel certain credit transactions that involve a lien on a
consumer's principal dwelling, regulates certain credit card
, practices, and provides a means for fair and timely resolution of
credit billing disputes. With the exception of certain high-cost
mortgage loans, TILA does not regulate the charges that may be
imposed for consumer credit. Rather, it requires uniform or
standardized disclosure of costs and charges so that consumers
can shop. It also imposes limitations on home equity plans that
are subject to the requirements of Sec. 226.5b and certain
higher-cost mortgages that are subject to the requirements of
Sec. 226.32. The regulation prohibits certain acts or practices in
connection with credit secured by a consumer's principal
dwelling.
In selling a house, certain charges are prohibited by the real
estate settlement procedures act. As appropriate, buyer or seller
may legally be charged for all of the following except
A. Credit reports
B. Disclosure settlement statements
C. The preparation of loan documents
D. Appraisals necessary to make the loan - correct answer
B. Disclosure settlement statements
A Uniform Settlement Statement must given the borrower by the
lender at no charge to the borrower.
What law prohibits discrimination in the sale and rental of a
residential property on the basis of race, color, religion,
handicap, sex, familial status or national origin?
A. Fair Housing Act
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller KieranKent55. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
