20-Hour PE OIL: Section 4 Quiz

_________ loans are also called alternative documentation loans because they are primarily used when borrowers with good credit have trouble meeting traditional documentation requirements.

Morgan wants to get a better rate by refinancing his home. He applied last year but didn’t qualify because he had to show more assets. His sister Margo suggested that she could add Morgan to all of her accounts, so long as he signs an agreement with her not to actually touch any of the money. She’ll file it away unless he crosses the line. Morgan is then able to reduce his interest rate and qualifies for a refinance. After the closing, Margo takes Morgan’s name off the accounts. This is scheme is referred to as_____________________.

Homeowners who want to access the equity in their home and be able to avoid repayment until they sell, die, or no longer live there may take advantage of a reverse mortgage if they are at least _____ years old.

Two brothers set up shop in a neighborhood and distribute flyers door-to-door about a way to get rich investing in real estate. They claim to be able to buy homes for $5,000 to $10,000, flip them and resell for ten times as much. This works a few times.  These happy investors gladly act as references for skeptical newbies. A few homes have bigger problems than expected and the brothers have taken on too many investors. Instead of buying homes for the new investors, they use the money to fix up a few good homes and use the money for their own devices. Eventually, the brother’s disappear and leave investors hanging, many who now own worthless homes which were never touched. This scam is called ____________________.

A (n) __________ mortgage is a loan type where at first the borrower makes payments of just interest and then later makes payments including both principal and interest.

Which of these is a characteristic of a qualified mortgage?

An adjustable rate mortgage is priced such that the rate is .75% above the SOFR rate, so what statement is TRUE?

  A borrower lacks down payment but otherwise qualifies for a mortgage. The seller agrees to help him out with the 5% down payment he needs. He knows that he cannot have the second mortgage in place and gets the seller to keep it between them until after the closing. This scheme is referred to as ____________________.

__________ might occur when a person’s tool shed sits partially on a neighbor’s property.

.    A borrower is approached by a lender that offers to refinance his loan again, give him $30,000 and do so for no fees at closing. After looking at the LE, the borrower notices the loan balance is increasing by $45,000. This is an example of _______________________.

Roy wants to know if his sister can move into his house and finish paying off his mortgage when he packs up to travel the world after he retires. Roy needs to look at his mortgage to determine if there is a(n) __________.

Using someone else’s name, social security number or driver’s license to obtain credit is a form of____________.

For a FHA loan,  a minimum investment is required by the borrower. The amount of the minimum investment is   ______________.

1.    A __________ buys a home with no intention of residing in the property.

In order to prevent perpetual encumbrance of the property, a mortgage must be satisfied or discharged within ____ years of the last payment date, or the mortgage may expire (unless a notice to preserve lien is filed).

    __________ is the amount of a borrower’s income remaining after taxes, housing obligations, and all outstanding debts with regular repayments are considered.

Which of the following is least likely to be a “Red Flag” indicating fraud?

Which of the following is a characteristic of conventional mortgages?

  A type of first lien loan where the APR is over the current APOR + 6.5% is a__________.   

.    If a MLO notices red flags of fraud in any transaction, he or she __________________.

   Both Fannie Mae and Freddie Mac define their underwriting guidelines by using which of the following specific goals for the underwriting process?

A borrower might benefit from a subprime loan if __________________________________.

  __________ have priority with respect to property rights.

A person commits mortgage fraud if they______________________________________.

.    For home associations, there may be __________ regarding the appearance of improvements, what can and cannot be parked in a driveway or placed on the property (such as fencing or mini-barns).

According to Fannie Mae, the four elements of mortgage fraud are _______________________.

.    A (n) __________ is a substitute for collateral and provides that title will be given to the borrower after all contract terms are met.

 Someone who is deceived into signing over the deed to their home in an attempt to avoid foreclosure has likely been the victim of a ______________.

1.    A fixed rate loan where the rate is reduced in the first years of the loan in exchange for an upfront payment is a __________.

 A borrower who owes over $120,000 on a home noticed that he is significantly underwater on his home that is now worth about $80,000. He contacts a friend and offers to give $10,000 in exchange for his buddy agreeing to make an offer to the servicer for $50,000 and tells the servicer he has less income that he really does. This is an example of  a(n)________________.

Which of the following descriptions is FALSE with regard to high-cost Jumbo loans?

Lorenzo made a presentation to a pastor about creating profits by investing in real estate in hopes of gaining additional church members to participate, unknowingly, in a scam. This is an example of __________________.

A borrower financing with a(n) __________ loan product typically has a deficiency with credit.

Bank Mortgage Inc. holds a loan that has late payments indicating  that the borrower may default. They send an inspector  to look at the condition of the property knowing they may have to foreclose on it. When he arrives at the confirmed address, the property does not exist even though the file shows a nice home. This is called a(n)___________________.