SAFE - Certified Secure and Fair Enforcement Mortgage Loan Originator Federal Mortgage-Related Laws Questions and Answers

Question 1

A mortgage loan originator provides a real estate agent with a $50 gift card for each loan application the agent refers.
The MLO does not tie the gift card to whether the loan closes.
Which federal law is being violated?

Accepted Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Truth in Lending Act (TILA)

Answer

Equal Credit Opportunity Act (ECOA)

Answer

Home Mortgage Disclosure Act (HMDA)

Question 2

Under the Equal Credit Opportunity Act (ECOA), which of the following is a permissible reason for a lender to deny a mortgage application?

Accepted Answer

The applicant's credit history shows multiple recent late payments.

Answer

The applicant's primary income is from a public assistance program.

Answer

The applicant is 65 years old and nearing retirement.

Answer

The applicant recently changed their marital status from married to single.

Question 3

A borrower applies for a mortgage. After reviewing their credit report, the lender decides to offer them a higher interest rate than the rate advertised for well-qualified applicants. Under the Fair and Accurate Credit Transactions Act (FACTA), what is the lender required to provide to the borrower?

Accepted Answer

A Risk-Based Pricing Notice.

Answer

A copy of the property appraisal.

Answer

A Loan Estimate within three business days.

Answer

An Adverse Action Notice.

Question 4

Which of the following pieces of information is a mortgage loan originator required to collect for government monitoring purposes under the Home Mortgage Disclosure Act (HMDA)?

Accepted Answer

Applicant's race, ethnicity, and sex

Answer

Applicant's educational background

Answer

Applicant's preferred language

Answer

Applicant's religious affiliation

Question 5

A consumer is applying for a home equity line of credit (HELOC) on their primary residence. They sign the loan documents at closing. According to the Truth in Lending Act (TILA), how long does the consumer have to rescind the transaction?

Accepted Answer

3 business days after closing.

Answer

There is no right of rescission for HELOCs.

Answer

24 hours after closing.

Answer

7 business days after closing.

Question 6

The primary purpose of the SAFE Act is to:

Accepted Answer

Increase uniformity and require the licensing and registration of mortgage loan originators.

Answer

Set maximum interest rates for high-cost mortgages.

Answer

Standardize the disclosure of settlement service costs.

Answer

Prevent discrimination in the granting of credit.

A mortgage loan originator provides a real estate agent with a $50 gift card for each loan application the agent refers.The MLO does not tie the gift card to whether the loan closes.Which federal law is being violated?

A mortgage loan originator provides a real estate agent with a $50 gift card for each loan application the agent refers.
The MLO does not tie the gift card to whether the loan closes.
Which federal law is being violated?