CMPS - Certified Mortgage Planning Specialist Financial and Housing Markets Questions and Answers

Question 1

A Certified Mortgage Planning Specialist (CMPS) is advising a client who is concerned about rising interest rates. Which of the following is the MOST direct influencer of 30-year fixed mortgage rates?

Accepted Answer

The 10-Year Treasury yield.

Answer

The Federal Reserve's federal funds rate.

Answer

The national unemployment rate.

Answer

The Consumer Price Index (CPI).

Question 2

What is the primary function of the secondary mortgage market?

Accepted Answer

To replenish lender capital by purchasing originated mortgages, thereby promoting liquidity.

Answer

To provide a government-backed insurance program for mortgage lenders.

Answer

To allow borrowers to directly negotiate loan terms with investors.

Answer

To offer refinancing options exclusively for government-sponsored enterprises.

Question 3

A client notices on their statement that their mortgage, originally from a local bank, has been sold to Fannie Mae. As a CMPS, how would you BEST explain this common practice?

Accepted Answer

This is part of the secondary market process where lenders sell loans to replenish their funds for future lending; the loan's terms for the client remain unchanged.

Answer

The local bank was likely facing financial trouble and was forced to sell the asset.

Answer

Fannie Mae offers better customer service, so this is a positive change for the client.

Answer

The client's loan was identified as high-risk, and Fannie Mae is a specialized servicer for such loans.

Question 4

When investor demand for Mortgage-Backed Securities (MBS) increases, what is the likely impact on mortgage interest rates?

Accepted Answer

Interest rates will decrease.

Answer

Interest rates will increase.

Answer

Interest rates will become more volatile.

Answer

There is no direct relationship between MBS demand and interest rates.

Question 5

Which of the following economic indicators would likely signal a potential slowdown in the housing market?

Accepted Answer

A sustained increase in the Consumer Price Index (CPI), suggesting higher inflation.

Answer

A decreasing unemployment rate.

Answer

An increasing Gross Domestic Product (GDP).

Answer

A rising housing affordability index.

Question 6

A client is considering an Adjustable-Rate Mortgage (ARM). The CMPS should advise them that the interest rate on their ARM is most directly tied to which of the following benchmarks?

Accepted Answer

The Federal Reserve's federal funds rate.

Answer

The 10-Year Treasury yield.

Answer

The performance of the S&P 500.

Answer

The national average 30-year fixed mortgage rate.

A Certified Mortgage Planning Specialist (CMPS) is advising a client who is concerned about rising interest rates.Which of the following is the MOST direct influencer of 30-year fixed mortgage rates?

A Certified Mortgage Planning Specialist (CMPS) is advising a client who is concerned about rising interest rates.
Which of the following is the MOST direct influencer of 30-year fixed mortgage rates?