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20-Hour PE OIL: Section 3 Quiz

By Scott Weghorst / September 16, 2020

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Question 1 of 40

1. Question

To exclude an appraiser from consideration for future engagement because he or she valued a consumer’s principal dwelling in a manner that does not meet or exceed a predetermined threshold is_________________.

Acceptable business practice, as long as the amount paid to the appraiser is not conditioned upon consummation of the loan
Correct Incorrect Correct answer

Acceptable business practice, as long as the appraiser’s pay is not withheld
Correct Incorrect Correct answer

Prohibited
Correct Incorrect Correct answer

Only prohibited in commercial transactions
Correct Incorrect Correct answer

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Question 2 of 40

2. Question

The GLB Act sets forth 3 important requirements. Notices must explain a financial institution’s policies and practices with respect to all but which of the following?

Disclosure of personal data to affiliates and nonaffiliated third parties
Correct Incorrect Correct answer

Disclosure of personal data of persons who have ceased to be its customers
Correct Incorrect Correct answer

Protection of personal data of consumers
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

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Question 3 of 40

3. Question

For higher-priced mortgage loans, prepayment penalties are typically not allowed unless ______________.

They will not apply after 3 years
Correct Incorrect Correct answer

The amount of the periodic payment cannot change within the first 3 years
Correct Incorrect Correct answer

The consumer’s total monthly debt payments do not exceed 35% of his or her gross monthly income at the time of closing
Correct Incorrect Correct answer

Higher priced loans cannot have a prepayment penalty
Correct Incorrect Correct answer

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Question 4 of 40

4. Question

Which of the following notices is NOT required to be provided to a consumer under the GLB Act?

Opt-out notice
Correct Incorrect Correct answer

Rescission notice
Correct Incorrect Correct answer

Revised notice to consumers, customers, and former consumers or customers any time the notice previously provided is no longer accurate
Correct Incorrect Correct answer

Annual notice to customers for the duration of the relationship with the financial institution
Correct Incorrect Correct answer

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Question 5 of 40

5. Question

In a reverse mortgage, any principal, interest or equity is due and payable ________.

When the last borrower passes
Correct Incorrect Correct answer

If the borrower becomes ill
Correct Incorrect Correct answer

When the property used to secure the debt ceases to serve as the principal residence of the borrower for a year
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

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Question 6 of 40

6. Question

A specific situation in a person calls their lender and requests an advance on a HELOC and acts as if they are the borrower when they are not is called_________________________.

False advertising
Correct Incorrect Correct answer

Information sharing
Correct Incorrect Correct answer

Pretexting
Correct Incorrect Correct answer

A violation of the MARS rule
Correct Incorrect Correct answer

Correct

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Question 7 of 40

7. Question

The primary purpose of RESPA is to _______________________.

Provide consumers with access to free credit reports
Correct Incorrect Correct answer

Make it more difficult to finance properties purchased for resale without a substantial down payment
Correct Incorrect Correct answer

Provide enough disclosure about settlement services so the consumer can effectively shop around
Correct Incorrect Correct answer

Prevent discrimination
Correct Incorrect Correct answer

Correct

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Question 8 of 40

8. Question

What description applies to a person who must be licensed under the SAFE Act?

Performs clerical tasks related to extensions of credit pertaining to timeshare plans
Correct Incorrect Correct answer

Is a loan processor or underwriter just working as a contractor
Correct Incorrect Correct answer

One who offers or negotiates terms of a residential mortgage loan with or on behalf of a member of his or her immediate family
Correct Incorrect Correct answer

One who sells timeshares or manufactured homes
Correct Incorrect Correct answer

Correct

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Question 9 of 40

9. Question

A feature that permits the lender to terminate the loan in advance of the original maturity date and to demand repayment of the entire outstanding balance is called a(n) _____________.

Due-on-demand clause
Correct Incorrect Correct answer

Amortization rate clause
Correct Incorrect Correct answer

Maturity extension clause
Correct Incorrect Correct answer

Rescission clause
Correct Incorrect Correct answer

Correct

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Question 10 of 40

10. Question

Which of the following properties would be covered by RESPA?

A commercial building on a one acre lot
Correct Incorrect Correct answer

A family farm including a house and 35 acres of land on one parcel
Correct Incorrect Correct answer

A vacant residential lot
Correct Incorrect Correct answer

A residential duplex with an apartment above the garage
Correct Incorrect Correct answer

Correct

Incorrect
Question 11 of 40

11. Question

Which of the following qualifications are necessary for licensure as a mortgage loan originator?

No foreclosures within the last 5 years
Correct Incorrect Correct answer

No current outstanding judgments with the exception of medical judgments
Correct Incorrect Correct answer

No pattern of seriously delinquent accounts in the past 5 years
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 12 of 40

12. Question

According to the TRID rule, the consumer must receive the Closing Disclosure a minimum of how many days prior to consummation?

2 business days
Correct Incorrect Correct answer

2 business days
Correct Incorrect Correct answer

4 business days
Correct Incorrect Correct answer

3 business days
Correct Incorrect Correct answer

Correct

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Question 13 of 40

13. Question

A(n) ___________is the submission of the borrower’s financial information in anticipation of a credit decision.

Appraisal
Correct Incorrect Correct answer

Credit Report
Correct Incorrect Correct answer

Application
Correct Incorrect Correct answer

HUD-1
Correct Incorrect Correct answer

Correct

Incorrect
Question 14 of 40

14. Question

What statement about the Home Mortgage Disclosure Act is TRUE?

HMDA was enacted to help identify discriminatory lending patterns.
Correct Incorrect Correct answer

HMDA requires borrowers to provide information concerning their race, gender, and ethnicity directly on loan applications.
Correct Incorrect Correct answer

HMDA allows for the use of information concerning race, gender and ethnicity in determining the granting or denial of credit to potential borrowers on a case by case basis, per lender discretion.
Correct Incorrect Correct answer

HMDA requires equal access to housing
Correct Incorrect Correct answer

Correct

Incorrect
Question 15 of 40

15. Question

Under the TRID rule, a lender may only charge for what item prior to disclosures being received?

Credit report
Correct Incorrect Correct answer

Appraisal
Correct Incorrect Correct answer

Application fee
Correct Incorrect Correct answer

Affiliate charges
Correct Incorrect Correct answer

Correct

Incorrect
Question 16 of 40

16. Question

1. The information contained in the Loan Estimate is considered good for _____days and must be honored.

3
Correct Incorrect Correct answer

7
Correct Incorrect Correct answer

30
Correct Incorrect Correct answer

10
Correct Incorrect Correct answer

Correct

Incorrect
Question 17 of 40

17. Question

Under the Fair Credit Reporting Act (FCRA) credit reports may be used __________________.

For licensing qualifications under the SAFE Act
Correct Incorrect Correct answer

Including medical information to determine a consumer’s eligibility for credit
Correct Incorrect Correct answer

By a loan originator in conjunction with an application, and a copy of the credit score and the report used must be furnished to the applicant
Correct Incorrect Correct answer

To share with referral partners
Correct Incorrect Correct answer

Correct

Incorrect
Question 18 of 40

18. Question

What items when received constitute a complete application?

Signed sales contract, appraisal, income information, employment information
Correct Incorrect Correct answer

Property address, estimated value, name, social security number or other identifier to pull credit, income, loan amount
Correct Incorrect Correct answer

Estimated value, name, social security number or other identifier to pull credit, income, loan amount
Correct Incorrect Correct answer

Disclosure or only required if the consumer requests them
Correct Incorrect Correct answer

Correct

Incorrect
Question 19 of 40

19. Question

The statement that “no person shall give and no person shall accept any fee or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a settlement service involving a federally-related mortgage loan shall be referred to any person” is the rule that prohibits ____________.

Fee-Splitting
Correct Incorrect Correct answer

Kickbacks
Correct Incorrect Correct answer

Affiliated business arrangements
Correct Incorrect Correct answer

Institutionalization of lending
Correct Incorrect Correct answer

Correct

Incorrect
Question 20 of 40

20. Question

If a copy of the credit report including a credit score accessed during the application process is furnished to the potential borrower, _____________________.

There is no need to provide any notice or disclosure about the credit report and its origin or use
Correct Incorrect Correct answer

A disclosure will be provided if so requested by the potential borrower
Correct Incorrect Correct answer

Providing the disclosure to the borrower is up to the originator, unless the potential borrower’s credit score is below 650, which would then require disclosure
Correct Incorrect Correct answer

A “Notice to the Home Loan Applicant” disclosure must be provided in all circumstances
Correct Incorrect Correct answer

Correct

Incorrect
Question 21 of 40

21. Question

What APR change triggers a re-disclosure and a 3-day waiting period?

More than a 1% increase
Correct Incorrect Correct answer

More than a 0.5% increase
Correct Incorrect Correct answer

More than a 0.125% increase
Correct Incorrect Correct answer

Less than a .01% increase
Correct Incorrect Correct answer

Correct

Incorrect
Question 22 of 40

22. Question

If following an escrow analysis, a loan servicer determines that there is an excess of $75 in a borrower’s escrow account, the servicer should ______________________________.

Let the borrower know and adjust the payments so that no further excess will occur
Correct Incorrect Correct answer

Let the borrower know and adjust the payments so that no further excess will occur and ask whether or not the borrower would like the money returned or retained in the account
Correct Incorrect Correct answer

Let the borrower know and adjust the payments so that no further excess will occur as well as return the amount in excess within 20 business days
Correct Incorrect Correct answer

No action is required
Correct Incorrect Correct answer

Correct

Incorrect
Question 23 of 40

23. Question

Mortgage professionals who make sales calls must check the Do Not Call list every ___ days to ensure they are not calling consumers on the list.

30
Correct Incorrect Correct answer

31
Correct Incorrect Correct answer

60
Correct Incorrect Correct answer

90
Correct Incorrect Correct answer

Correct

Incorrect
Question 24 of 40

24. Question

The Loan Estimate must be provided after the application within what time frame?

Must be delivered or placed in the mail within 3 days
Correct Incorrect Correct answer

Must be delivered or placed in the mail within 3 business days
Correct Incorrect Correct answer

Must be sent by the lender within 1 day or signed within 3 days
Correct Incorrect Correct answer

Must be delivered by the lender within 7 business days
Correct Incorrect Correct answer

Correct

Incorrect
Question 25 of 40

25. Question

If an intention exists to transfer or sell the servicing of a loan, which of the following statements is TRUE with respect to servicing disclosure statements?

The servicer transferring the loan must deliver notice to the borrower at least 10 days before the transfer becomes effective.
Correct Incorrect Correct answer

A disclosure communicating this intention must be provided at the time of application or within 3 days after.
Correct Incorrect Correct answer

The servicer to whom the loan obligation is being transferred must deliver notice to the borrower no later than 10 days after the transfer becomes effective.
Correct Incorrect Correct answer

All of these are true.
Correct Incorrect Correct answer

Correct

Incorrect
Question 26 of 40

26. Question

The FTC Red Flags Rule provisions call for procedures that include ____________.

Identifying suspicious documents
Correct Incorrect Correct answer

Identifying unusual account use
Correct Incorrect Correct answer

The handling of notices from a consumer or victim of identity theft
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 27 of 40

27. Question

What is the earliest the consumer can close after receiving disclosures?

3 days
Correct Incorrect Correct answer

7 days
Correct Incorrect Correct answer

10 days
Correct Incorrect Correct answer

15 days
Correct Incorrect Correct answer

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Question 28 of 40

28. Question

With respect to the Equal Credit Opportunity Act (ECOA,) which of the following statements is FALSE?

The lender must give an applicant a copy of all appraisals and/or valuations developed in connection with the application for any loan which would have been a first lien on a residential dwelling.
Correct Incorrect Correct answer

Copies of appraisals must be provided promptly upon their completion and not later than three day prior to the closing of the loan.
Correct Incorrect Correct answer

Copies of the appraisal and valuation information must be provided even if the lender denies that applicant’s request for credit or in cases where the application remains incomplete or is withdrawn.
Correct Incorrect Correct answer

The lender may not require the applicant to pay any fee for the cost of the appraisal as this is prohibited by law.
Correct Incorrect Correct answer

Correct

Incorrect
Question 29 of 40

29. Question

Which of the following statements about the Home Mortgage Disclosure Act are TRUE?

HMDA was not enacted to help identify discriminatory lending patterns.
Correct Incorrect Correct answer

HMDA requires borrowers to provide information concerning their race, gender and ethnicity directly on loan applications.
Correct Incorrect Correct answer

HMDA allows for the use of information concerning race, gender and ethnicity in determining the granting or denial of credit to potential borrowers on a case by case basis, per lender discretion.
Correct Incorrect Correct answer

HMDA requires lenders to collect and report information including race and ethnicity.
Correct Incorrect Correct answer

Correct

Incorrect
Question 30 of 40

30. Question

Which statement is the most correct?

Disclosed lender credits can change by any amount
Correct Incorrect Correct answer

Disclosed lender credits can only be reduced
Correct Incorrect Correct answer

Disclosed lender credits cannot be reduced
Correct Incorrect Correct answer

Lender credits aren't regulated
Correct Incorrect Correct answer

Correct

Incorrect
Question 31 of 40

31. Question

The statement that “no person shall give and no person shall accept any fee or other thing of value pursuant to any agreement or understanding, oral or otherwise, that a business incident to or part of a settlement service involving a federally related mortgage loan shall be referred to any person” is the rule that does not prohibit _________.

fee-splitting
Correct Incorrect Correct answer

kickbacks
Correct Incorrect Correct answer

affiliated business arrangements
Correct Incorrect Correct answer

institutionalization of lending
Correct Incorrect Correct answer

Correct

Incorrect
Question 32 of 40

32. Question

According to the Mortgage Reform and Anti-predatory Lending Act of Dodd Frank, if a mortgage is qualified, prepayment penalties are still limited to __________ of the balance the first year.

5%
Correct Incorrect Correct answer

3%
Correct Incorrect Correct answer

2%
Correct Incorrect Correct answer

1%
Correct Incorrect Correct answer

Correct

Incorrect
Question 33 of 40

33. Question

Generally, the Truth in Lending Act (TILA) provides ________.

Consumers with the right to cancel (rescind) certain credit transactions involving a mortgage on a principal residence in some circumstances
Correct Incorrect Correct answer

The means for timely resolution of all credit disputes
Correct Incorrect Correct answer

Set limitations on all charges in a mortgage loan transaction
Correct Incorrect Correct answer

Prohibitions against referral fees
Correct Incorrect Correct answer

Correct

Incorrect
Question 34 of 40

34. Question

The Mortgage Assistance relief services act (MARS) passed in 2009 outlaws __________ fees and false claims and requires clear disclosures in mortgage lending.

Appraisal
Correct Incorrect Correct answer

Advertising
Correct Incorrect Correct answer

Loan origination
Correct Incorrect Correct answer

Advance
Correct Incorrect Correct answer

Correct

Incorrect
Question 35 of 40

35. Question

TILA applies to extension of credit when __________________________.

Credit is offered to a consumer
Correct Incorrect Correct answer

The business, person, or entity extends credit to consumers on a regular basis (more than five times for a transaction secured by a dwelling)
Correct Incorrect Correct answer

Credit is primarily for personal, family, or household purposes (not business purposes)
Correct Incorrect Correct answer

All of the above
Correct Incorrect Correct answer

Correct

Incorrect
Question 36 of 40

36. Question

The FTC Safeguard Rules are designed to __________.

Protect lenders from high-risk borrowers
Correct Incorrect Correct answer

Provide protocols for advertising for loan originators
Correct Incorrect Correct answer

Ensure security and confidentiality of customer records and information
Correct Incorrect Correct answer

Set forth stricter requirements for property insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 37 of 40

37. Question

It is NOT considered discrimination (and therefore not a violation of ECOA) for a creditor to refuse to extend credit for which of the following reasons?

Disqualification due to national origin
Correct Incorrect Correct answer

Disqualification for any credit assistance program authorized by law for an economically disadvantaged class of people
Correct Incorrect Correct answer

Disqualification due to gender
Correct Incorrect Correct answer

Credit scores
Correct Incorrect Correct answer

Correct

Incorrect
Question 38 of 40

38. Question

The FTC Safeguard Rules are designed to __________.

Protect lenders from high-risk borrowers
Correct Incorrect Correct answer

Provide protocols for advertising for loan originators
Correct Incorrect Correct answer

Ensure security and confidentiality of customer records and information
Correct Incorrect Correct answer

Set forth stricter requirements for property insurance
Correct Incorrect Correct answer

Correct

Incorrect
Question 39 of 40

39. Question

Generally, the annual percentage rate (APR) on a fixed rate loan is considered to be accurate if __________.

It is not more than ½ of 1% above or below the APR disclosed
Correct Incorrect Correct answer

It is not more than 1/8th of 1% above the APR disclosed
Correct Incorrect Correct answer

It goes up 0.5% one month, but returns to its original value the next month
Correct Incorrect Correct answer

Not more $100 over the original estimate
Correct Incorrect Correct answer

Correct

Incorrect
Question 40 of 40

40. Question

The Patriot Act, which enhanced and solidified existing provisions of the Crime Control Act and Bank Secrecy Acts, does which of the following?

Requires treble penalties for violations involving misleading advertisements by mortgage relief companies
Correct Incorrect Correct answer

Requires verification of consumer identity in transactions
Correct Incorrect Correct answer

Enhances due diligence programs
Correct Incorrect Correct answer

Both b and c, but not a
Correct Incorrect Correct answer

Correct

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