NMLS Vocabulary 2023/2024 Prerequisite pretest Exam training Questions with Rated A + Marking Scheme
Cost of Funds Index (COFI) - correct answer A regional average of interest expenses incurred by financial institutions, which in turn is used as a base for calculating variable rate loans
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NMLS Vocabulary 2023/2024 Prerequisite
pretest Exam training Questions with Rated A
+ Marking Scheme
Cost of Funds Index (COFI) - correct answer A regional
average of interest expenses incurred by financial institutions,
which in turn is used as a base for calculating variable rate loans
Credit - correct answer Sum of money to be received
Credit Freeze - correct answer A consumer request that
requires the credit bureaus to deny all access to a consumer's
credit information or files
Credit History - correct answer A person's record of debt
repayment, often used as a guide to whether he or she is likely to
pay accounts on time in the future
Credit Scoring - correct answer A System that assigns a
number, or score, to each consumer indicating whether this
person is a good or bad credit risk.
Customer - correct answer Consumer with a continuing,
significant relationship with a financial institution
Debit - correct answer Sum of money that is owed
,Debt - correct answer (Monthly) Any recurring monthly
monetary obligation that will not be cancelled
debt-to-income ratio - correct answer The relationship of the
borrower's total monthly debt obligations (including housing and
other long-term debts with 10 or more payments remaining) to
income, expressed as a percentage
DTI (Total Debt to Income) or Total Debt Ratio, Back-End Ratio -
correct answer Total Debt /Income=Ratio%
Deed of Trust - correct answer A security instrument
placing into the hands of a disinterested third party a specific
financial interest in the title to real property as security for the
payment of a note. Also called Trust Deed
Defeasance Clause - correct answer A clause in a legal
document that states that in the event a stated condition has
been fulfilled, the document becomes null and void
Demand Clause - correct answer Any provision in a contract
that enables a creditor to call due a loan before maturity
Demand Deposit - correct answer Money that is immediately
accessible by a customer who may elect to withdraw it from the
bank at any time
Depository Institution - correct answer Any bank or savings
association (the same meaning as in Section 3 of the Federal
, Deposit Insurance Act) where funds are deposited and includes
any credit union
Discount Points - correct answer A form of pre-paid interest
that is charged by a lender to increase the yield on a lower-than-
market interest rate loan so that a borrower may get the benefit
of a lower interest rate; one point equals one percent of the loan
amount
Disintermediation - correct answer The loss of deposits to
competing investments that offer higher returns.
Disparate Impact - correct answer A law that may be neutral
on it face, but has a discriminatory effect since it has a greater
adverse impact on one group than on others
Dodd-Frank Wall Street Reform and Consumer Protection Act -
correct answer A federal law with the purpose to promote
the financial stability of the United States by improving
accountability and transparency in the financial system. It
established the Consumer Financial Protection Bureau and new
standards concerning a wide range of mortgage lending
practices, including compensation of mortgage originators,
federal mortgage disclosures, and mortgage servicing
Dower or Curtesy Rights - correct answer Interest in the
real estate of a deceased spouse given by law to the surviving
partner.
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