Assessment Flashcards
7 cards from real Mortgage Loan Originator practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Assessment flashcards as text
Under the Homeowners Protection Act (HPA), when must a lender automatically cancel PMI on a conventional loan?
Answer: When LTV reaches 78% based on original amortization schedule
The HPA requires automatic PMI cancellation when the loan balance reaches 78% of the original value based on the scheduled amortization, regardless of borrower request.
A lender requires a borrower to use a specific title insurance company as a condition of the loan. Under RESPA, this is:
Answer: Prohibited as an illegal tied arrangement
RESPA Section 9 prohibits sellers and lenders from requiring buyers to use a specific title insurance company as a condition of the sale or loan.
What minimum credit score does FHA typically require for a borrower to qualify for the maximum 96.5% LTV (3.5% down payment)?
Answer: 580
FHA guidelines allow a 3.5% down payment for borrowers with a minimum credit score of 580; scores between 500-579 require 10% down.
A borrower refinances their primary residence. Under the Right of Rescission, how many business days do they have to cancel?
Answer: 3 business days
Regulation Z grants borrowers a three-business-day right of rescission on refinances of their primary residence with a new lender.
Which type of income is generally NOT acceptable for qualifying purposes without a two-year history?
Answer: Overtime and bonus income
Variable income such as overtime, bonuses, and commissions generally requires a two-year history to be used for qualifying purposes under agency guidelines.
A VA loan's funding fee can be financed into the loan. Which borrower group is exempt from paying the VA funding fee?
Answer: Veterans receiving VA compensation for a service-connected disability
Veterans who receive VA disability compensation for a service-connected disability are exempt from the VA funding fee.
Under HMDA, which of the following financial institutions is generally required to report mortgage data?
Answer: Depository institutions meeting asset and loan volume thresholds in metropolitan areas
HMDA reporting applies to depository and non-depository institutions that meet specific asset size, loan volume, and geographic (metropolitan area) thresholds.