NMLS SAFE MLO — Mortgage Loan Originator — All Questions

A borrower submits a complete mortgage application on Monday. Under the TRID rule, what is the latest the lender may deliver or place the Loan Estimate in the mail?

• a.No later than 3 business days after receiving the application✓
• b.By the end of the same business day
• c.Within 24 hours of application
• d.At least 7 business days before closing

TRID requires the Loan Estimate to be delivered or mailed no later than 3 business days after the lender receives a complete application. The 7-business-day figure is the waiting period between delivering the LE and consummation, not the delivery deadline. Same-day or 24-hour delivery is not required.TRID

Under the TRID rule, the borrower must receive the Closing Disclosure no later than how many business days before consummation of the loan?

• a.10 business days
• b.7 business days
• c.3 business days✓
• d.1 business day

The Closing Disclosure must be received by the borrower at least 3 business days before consummation, giving time to compare it to the Loan Estimate. The 7-business-day rule applies to delivery of the initial Loan Estimate before consummation. One and ten business days are not TRID timing requirements.TRID

Three business days before closing, the borrower's annual percentage rate (APR) increases from 6.0% to 6.3% because the interest rate was locked higher. Under TRID, what must the lender do?

• a.Provide a revised Loan Estimate only
• b.Provide a corrected Closing Disclosure and observe a new 3-business-day waiting period✓
• c.Proceed to close as scheduled with no delay
• d.Nothing; APR changes are always allowed at closing

An APR increase beyond the tolerance (more than 1/8% for fixed-rate loans) is one of three changes that trigger a new corrected Closing Disclosure and a fresh 3-business-day waiting period. A change to a prepayment penalty or a change in loan product also triggers redisclosure. Minor changes generally do not restart the clock, but this APR change does.TRID

A mortgage broker refers borrowers to a specific title company and, in exchange, receives $50 for each referral. Under RESPA, this arrangement is:

• a.Permitted because the fee is under $100
• b.Permitted because title services are exempt from RESPA
• c.A prohibited kickback for the referral of settlement service business✓
• d.Permitted if disclosed on the Closing Disclosure

Section 8 of RESPA prohibits giving or accepting any fee, kickback, or thing of value for the referral of settlement service business involving a federally related mortgage loan. There is no dollar-amount safe harbor, and disclosure does not cure an illegal kickback. Title services are settlement services covered by RESPA.RESPA / Regulation X

After a lender takes adverse action on a completed mortgage application, within how many days must the applicant receive notice under ECOA?

• a.60 days
• b.15 days
• c.30 days✓
• d.10 days

ECOA (Regulation B) requires that a notice of adverse action on a completed application be provided within 30 days of the decision. The other intervals do not match the ECOA adverse action timing standard. This notice must include the reasons for denial or a statement of the right to request them.ECOA / Regulation B

During a loan interview, a loan originator asks a female applicant whether she plans to have children, implying it could affect her income. Under ECOA, this question is:

• a.Permitted only for conventional loans
• b.Permitted if the applicant answers voluntarily
• c.Required for accurate income analysis
• d.A prohibited inquiry based on sex and potential childbearing✓

ECOA prohibits discrimination based on sex and generally bars questions about birth control or childbearing plans because they can be used to discriminate. A creditor may not assume income will be reduced due to childbearing. Voluntary answers or loan type do not make the inquiry lawful.ECOA / Regulation B

Which of the following is NOT a protected basis under the Equal Credit Opportunity Act?

• a.Educational attainment level✓
• b.Receipt of public assistance income
• c.National origin
• d.Marital status

ECOA's protected bases are race, color, religion, national origin, sex, marital status, age, and the applicant's receipt of public assistance or exercise of rights under the Consumer Credit Protection Act. Educational attainment is not a protected class under ECOA. Marital status, public assistance income, and national origin are all protected.ECOA / Regulation B

In a refinance of a primary residence with a new lender, when does the borrower's right of rescission under TILA generally expire?

• a.Thirty days after the first payment is due
• b.Midnight of the third business day after the latest of consummation, delivery of the notice of the right to rescind, or delivery of material TILA disclosures✓
• c.Immediately upon signing the note
• d.Seven business days after closing

TILA gives a 3-business-day right of rescission on refinances secured by the borrower's principal dwelling; the clock runs from the latest of consummation, delivery of the rescission notice, or delivery of material disclosures. Purchase-money loans have no rescission right. Seven days and thirty days are not the rescission period.TILA / Regulation Z

The annual percentage rate (APR) disclosed under TILA is best described as:

• a.The same as the note interest rate
• b.The rate charged only if the borrower prepays the loan
• c.The interest rate plus the monthly principal payment
• d.The cost of credit expressed as a yearly rate that includes interest and certain finance charges✓

TILA's APR expresses the total cost of credit as a yearly percentage rate, reflecting the interest rate plus certain finance charges such as points and some fees. It is generally higher than the note rate because of those added costs. It is not simply the note rate, nor a prepayment or principal-based figure.TILA / Regulation Z

Under the Homeowners Protection Act, private mortgage insurance (PMI) on a residential loan must be automatically terminated when the loan balance reaches what percentage of the original property value, assuming payments are current?

• a.70% LTV
• b.78% LTV✓
• c.75% LTV
• d.80% LTV

The Homeowners Protection Act requires automatic termination of borrower-paid PMI when the loan-to-value ratio reaches 78% of the original value, provided the borrower is current on payments. At 80% LTV the borrower may request cancellation, but automatic termination is at 78%. Seventy-five and seventy percent are not the statutory thresholds.Homeowners Protection Act

A borrower with a current loan wants to cancel PMI early. Under the Homeowners Protection Act, a borrower generally may REQUEST cancellation of PMI once the loan balance reaches:

• a.80% of the original property value✓
• b.90% of the original property value
• c.50% of the original property value
• d.78% of the original property value

Under the HPA, a borrower may request PMI cancellation when the principal balance reaches 80% of the original value, subject to being current and meeting other conditions such as a good payment history. Automatic termination occurs at 78%. Ninety and fifty percent are not the request thresholds.Homeowners Protection Act

A lender denies a mortgage application partly because of information in the applicant's credit report. Under the Fair Credit Reporting Act, the lender must provide the applicant with:

• a.A refund of the application fee
• b.A risk-based pricing or adverse action notice identifying the credit reporting agency used✓
• c.A new credit report prepared by the lender
• d.A copy of the lender's underwriting guidelines

FCRA requires an adverse action notice when a credit report contributes to a denial or less favorable terms; it must identify the consumer reporting agency and inform the applicant of the right to a free report and to dispute inaccuracies. The lender need not disclose underwriting guidelines, refund fees, or generate its own report. This works alongside ECOA's adverse action requirements.FCRA

The primary purpose of the Home Mortgage Disclosure Act (HMDA) is to:

• a.Set maximum interest rates on home loans
• b.Provide public loan data to help identify discriminatory lending and redlining patterns✓
• c.Guarantee approval for low-income applicants
• d.Require lenders to offer loans in every neighborhood

HMDA requires covered institutions to collect and report data on mortgage applications and originations so regulators and the public can detect potential discrimination, redlining, and unmet housing needs. It does not cap interest rates, mandate lending in every area, or guarantee approvals. Its function is transparency and monitoring, not rate control.HMDA

Under the Gramm-Leach-Bliley Act (GLBA), a financial institution must provide consumers with a privacy notice that:

• a.Is required only for commercial loans
• b.Must be signed and notarized by the consumer
• c.Guarantees the institution will never share any information
• d.Explains its information-sharing practices and, in certain cases, offers the right to opt out✓

GLBA requires financial institutions to give consumers a privacy notice describing what nonpublic personal information is collected and shared, and to offer an opt-out for certain sharing with nonaffiliated third parties. It does not guarantee zero sharing, apply only to commercial loans, or require notarized signatures. The notice supports consumer control over personal financial data.Gramm-Leach-Bliley Act

Which of the following loans is generally EXEMPT from RESPA coverage?

• a.A purchase-money loan on a single-family home
• b.A refinance of a borrower's principal residence
• c.A loan secured by 25 acres of vacant land used primarily for business✓
• d.A home equity line of credit on an owner-occupied duplex

RESPA covers federally related mortgage loans secured by residential property (1-4 units). A loan on vacant land used primarily for a business or agricultural purpose is generally exempt. Purchase loans, refinances, and HELOCs on residential dwellings are covered transactions. The exemption turns on the property's non-residential, business nature.RESPA / Regulation X

After a borrower submits a written qualified written request (QWR) about a servicing error, RESPA requires the servicer to acknowledge receipt within how many business days?

• a.5 business days✓
• b.20 business days
• c.3 business days
• d.4 business days

Under RESPA/Regulation X, a servicer must acknowledge a qualified written request within 5 business days of receipt. The servicer then generally must respond substantively within 30 business days. Three and four days are incorrect, and twenty days is not the acknowledgment deadline.RESPA / Regulation X

Under Regulation Z, if an advertisement for a mortgage states a specific interest rate (a triggering rate) or trigger term, it must also disclose:

• a.The lender's total annual profit
• b.The borrower's credit score requirement
• c.The annual percentage rate (APR), and if the rate may increase, that fact✓
• d.The names of all loan officers

Regulation Z advertising rules require that when a trigger term (like a specific rate or payment amount) appears, the ad must also clearly state the APR and, for variable-rate loans, that the rate may increase after consummation. Profit figures, officer names, and credit score cutoffs are not required trigger-term disclosures. The rule prevents misleading rate advertising.TILA / Regulation Z

The Home Ownership and Equity Protection Act (HOEPA) primarily provides additional protections for borrowers obtaining:

• a.All conventional conforming loans
• b.Only reverse mortgages
• c.Loans on commercial office buildings
• d.High-cost mortgage loans that exceed certain APR, points-and-fees, or prepayment thresholds✓

HOEPA imposes extra disclosures and restrictions on high-cost mortgages that exceed defined thresholds for APR, points and fees, or prepayment penalties. Conforming loans that stay under those thresholds are not high-cost. HOEPA is not limited to reverse mortgages, and it applies to consumer residential loans, not commercial buildings.HOEPA

For purposes of TRID's 'application' definition that triggers the Loan Estimate, an application is considered received when the lender obtains which six pieces of information?

• a.Name, income, Social Security number, property address, estimated property value, and loan amount sought✓
• b.Name, income, monthly debts, property taxes, insurance, and loan term
• c.Name, employer, bank balance, credit score, down payment, and closing date
• d.Name, marital status, race, property address, loan amount, and appraisal

Under TRID, an application consists of six items: the consumer's name, income, Social Security number (to obtain a credit report), property address, an estimate of the property's value, and the loan amount sought. Once all six are received, the 3-business-day Loan Estimate clock starts. The other lists include items not part of the regulatory definition.TRID

Under TRID tolerance rules, which category of charges generally may NOT increase at all from the Loan Estimate to the Closing Disclosure (a zero-tolerance category)?

• a.Prepaid interest and property insurance premiums
• b.The lender's own origination charges and transfer taxes✓
• c.Recording fees
• d.Services the borrower shops for from an unaffiliated provider

Fees paid to the lender or broker, such as origination charges, and government transfer taxes are subject to zero tolerance and generally cannot increase without a valid change of circumstance. Prepaids and certain third-party services the borrower shops for fall in other tolerance categories. Recording fees fall under a 10% aggregate tolerance, not zero tolerance.TRID

A loan originator wants to make telemarketing calls to generate mortgage leads. Under the federal Telemarketing/Do-Not-Call rules, a number registered on the National Do-Not-Call Registry generally may still be called if:

• a.The call is made before 9:00 p.m. local time
• b.The consumer has an established business relationship with the company or gave prior express written consent✓
• c.The call lasts less than two minutes
• d.The originator blocks caller ID

Calls to numbers on the Do-Not-Call Registry are generally prohibited unless an exception applies, such as an established business relationship or the consumer's prior express written consent. Calling before 9 p.m., blocking caller ID, or keeping calls short does not create an exception, and blocking caller ID is itself prohibited. The relationship or consent is what permits the call.Do-Not-Call / TSR

Under the Mortgage Assistance Relief Services (MARS) rule (Regulation N), a company offering loan modification services to distressed homeowners is generally prohibited from:

• a.Collecting any fee before the consumer receives and accepts a written offer from the lender or servicer✓
• b.Charging any fee at any time
• c.Contacting the homeowner's lender
• d.Advertising its services online

The MARS rule (Regulation N) bars mortgage assistance relief providers from collecting advance fees; a fee may be charged only after the consumer receives and agrees to a written mortgage-relief offer from the lender or servicer. Advertising and contacting the lender are not themselves prohibited, and fees are not banned entirely, only advance fees. The rule targets upfront-fee foreclosure-rescue scams.MARS / Regulation N

A creditworthy married applicant applies individually for a mortgage in her own name and qualifies on her own income. Under ECOA, may the lender require her husband to co-sign?

• a.Only if the property is in a community property state
• b.No; a lender may not require a spouse to co-sign if the applicant independently qualifies✓
• c.Yes; spouses must always be included on mortgage applications
• d.Yes, but only for FHA loans

ECOA prohibits requiring a spouse's signature when the individual applicant qualifies on her own for the amount and terms requested. Marital status is a protected basis, and a lender cannot mandate spousal co-signing simply because the applicant is married. Loan type and community property status do not override this protection when she independently qualifies.ECOA / Regulation B

Regulation Z's ability-to-repay (ATR) rule generally requires a lender making a covered mortgage loan to:

• a.Approve any borrower with a 620 credit score
• b.Rely solely on the borrower's stated income
• c.Make a reasonable, good-faith determination that the borrower can repay based on verified income, assets, and obligations✓
• d.Ignore the borrower's other monthly debts

The ATR rule requires lenders to make a reasonable, good-faith determination of a borrower's ability to repay using verified information such as income, assets, employment, credit history, and monthly obligations. A fixed credit score does not satisfy ATR, and stated-income-only underwriting is not permitted. Ignoring existing debts would violate the rule.TILA / Regulation Z

Under Regulation Z's loan originator compensation rule, a loan originator's compensation generally may NOT be based on:

• a.Whether the loan is a purchase or a refinance, if applied without steering
• b.The total dollar volume of loans originated over a year
• c.The terms of the transaction, such as the interest rate✓
• d.A fixed percentage of the loan amount consistently applied

Regulation Z prohibits basing loan originator compensation on the terms of a transaction, such as the interest rate, to prevent steering borrowers into costlier loans. Compensation may be based on the loan amount or overall volume, and certain permissible factors are allowed. Rate-based or term-based pay is the prohibited practice this rule targets.TILA / Regulation Z

At or before settlement on a purchase loan requiring an escrow account, RESPA requires the servicer to provide the borrower with:

• a.An initial escrow account statement itemizing expected taxes, insurance, and other charges✓
• b.A promissory note guarantee
• c.The lender's internal loan file
• d.A copy of the appraisal only

RESPA requires an initial escrow account statement, provided at settlement or within 45 days of establishing the escrow account, itemizing the anticipated disbursements such as property taxes and insurance and the escrow payment amounts. It is not the appraisal, the internal file, or a note guarantee. This helps borrowers understand their escrow obligations.RESPA / Regulation X

Under ECOA/Regulation B, for how long must a creditor generally retain records related to a mortgage application after notifying the applicant of action taken?

• a.36 months
• b.12 months
• c.6 months
• d.25 months✓

Regulation B generally requires creditors to retain mortgage application records for 25 months after notifying the applicant of the action taken (12 months for business credit in some cases). Six, twelve, and thirty-six months are not the standard consumer-credit retention period under Regulation B. This supports fair-lending examination and enforcement.ECOA / Regulation B

Under the Fair Credit Reporting Act, most negative information (such as late payments) may generally remain on a consumer's credit report for up to:

• a.3 years
• b.Indefinitely
• c.7 years✓
• d.10 years

FCRA generally allows most negative information to remain on a credit report for up to 7 years; Chapter 7 bankruptcies may remain up to 10 years. Three years is too short, ten years applies only to certain bankruptcies, and information cannot remain indefinitely. Time limits protect consumers from stale derogatory data.FCRA

A loan is classified as a 'higher-priced mortgage loan' (HPML) under Regulation Z. Which additional requirement generally applies?

• a.An escrow account for taxes and insurance is generally required for a minimum period, and a written appraisal with interior inspection is required✓
• b.No appraisal is ever required
• c.The loan must be interest-only
• d.The APR must be disclosed only orally

HPMLs trigger extra protections: lenders generally must establish an escrow account for property taxes and insurance for at least the first five years and obtain a written appraisal based on a physical interior inspection. HPMLs are not required to be interior-only or interest-only, and appraisals are required rather than waived. Oral APR disclosure is never sufficient.TILA / Regulation Z

A lender owns a partial interest in the title company it refers borrowers to. Under RESPA, this affiliated business arrangement is permitted only if:

• a.The lender pays the borrower a bonus
• b.The borrower is required to use the affiliated company
• c.The referral is kept secret from the borrower
• d.The relationship is disclosed, the borrower is not required to use the affiliate, and the only thing of value received is a return on ownership interest✓

RESPA permits affiliated business arrangements only when the arrangement is disclosed in writing, the consumer is not required to use the affiliated provider (except in limited cases), and no thing of value passes other than a return on the ownership interest. Secret referrals, mandatory use, or bonus payments would violate Section 8. Disclosure plus voluntariness is essential.RESPA / Regulation X

Which single disclosure form under TRID replaced both the old Truth-in-Lending disclosure and the HUD-1 Settlement Statement at closing?

• a.The Good Faith Estimate
• b.The Notice of Right to Cancel
• c.The Loan Estimate
• d.The Closing Disclosure✓

The Closing Disclosure combined the final Truth-in-Lending disclosure and the HUD-1 Settlement Statement into one form given before closing. The Loan Estimate replaced the early TIL disclosure and the Good Faith Estimate at application. The Notice of Right to Cancel is a separate rescission document and was not consolidated.TRID

Under RESPA, a lender may require a borrower to maintain an escrow cushion of no more than how much of the estimated annual escrow disbursements?

• a.Six months
• b.Two months (one-sixth of annual disbursements)✓
• c.One month
• d.Three months

RESPA/Regulation X limits the escrow cushion to no more than one-sixth of the estimated annual disbursements, which equals about two months of escrow payments. One month is below the allowed maximum, and three or six months exceeds the RESPA limit. This prevents servicers from over-collecting escrow funds.RESPA / Regulation X

Under Regulation Z, a 'finance charge' includes which of the following?

• a.Title insurance chosen by the borrower
• b.Property taxes paid to the county
• c.The seller's real estate commission
• d.Loan origination fees and points paid to obtain the loan✓

The finance charge under TILA is the cost of credit as a dollar amount and includes items like origination fees, points, and certain mortgage insurance and interest. Real estate commissions, borrower-selected title insurance, and property taxes are generally excluded from the finance charge. Correctly identifying finance charges is essential to computing the APR.TILA / Regulation Z

Data collected and reported under HMDA is compiled into a public dataset commonly known as:

• a.The National Credit File
• b.The Loan/Application Register (LAR)✓
• c.The RESPA Register
• d.The Fair Lending Index

Covered institutions record HMDA data on a Loan/Application Register (LAR), which is submitted to regulators and made available to the public. There is no 'Fair Lending Index,' 'National Credit File,' or 'RESPA Register' used for HMDA reporting. The LAR is the mechanism that supports transparency in mortgage lending patterns.HMDA

The Safeguards Rule under the Gramm-Leach-Bliley Act requires a mortgage company to:

• a.Provide free credit monitoring to every applicant
• b.Develop, implement, and maintain a written information security program to protect customer data✓
• c.Report all loans to the IRS monthly
• d.Store all files as paper copies only

The GLBA Safeguards Rule requires financial institutions to develop and maintain a written information security program with administrative, technical, and physical safeguards to protect customer information. It does not require monthly IRS reporting, free credit monitoring, or paper-only storage. Protecting nonpublic personal information from unauthorized access is the goal.Gramm-Leach-Bliley Act

Under ECOA, a lender may consider an applicant's age in a credit decision only when:

• a.The applicant is over 62 and the lender wants to deny the loan
• b.The applicant is under 25
• c.Age is never permitted to be considered at all
• d.Age is used in an empirically derived, demonstrably sound credit scoring system, and the elderly are not assigned a negative factor✓

ECOA generally bars age discrimination, but age may be used in an empirically derived, demonstrably and statistically sound credit scoring system, provided applicants 62 or older are not treated less favorably. A lender cannot use age simply to deny elderly or young applicants. Age is not absolutely barred; it is restricted to defined, non-discriminatory uses.ECOA / Regulation B

Under Regulation Z, the Home Equity Line of Credit (HELOC) program disclosures and a brochure must generally be provided to the consumer:

• a.Never; HELOCs are exempt from disclosure
• b.Within 30 days of opening the line
• c.At the time an application is provided to the consumer✓
• d.Only at closing

For HELOCs, Regulation Z requires that the early disclosures and the 'What You Should Know About Home Equity Lines of Credit' brochure be provided at the time the application is given to the consumer. Providing them only at closing or within 30 days after opening is too late, and HELOCs are not exempt from disclosure requirements. Early disclosure allows informed shopping.TILA / Regulation Z

A lender issues a Loan Estimate, and two days later the borrower's requested loan amount increases because the appraisal came in higher, allowing more cash out. Under TRID, this is:

• a.A valid changed circumstance that can justify issuing a revised Loan Estimate and resetting affected tolerances✓
• b.A reason to cancel the application entirely
• c.Never a valid reason to revise the Loan Estimate
• d.Grounds to skip the Closing Disclosure

TRID allows a revised Loan Estimate when a valid changed circumstance occurs, such as a borrower-requested change in the loan amount, which can reset applicable tolerances. It is not a reason to cancel the application or skip the Closing Disclosure, and revisions are permitted, not prohibited. The lender must issue the revised LE within the required timeframe to rely on the new figures.TRID

Before closing a high-cost mortgage subject to HOEPA, the lender must generally ensure the borrower receives:

• a.Homeownership counseling from a HUD-approved counselor and a special HOEPA disclosure at least three business days before closing✓
• b.Free title insurance
• c.A cash rebate equal to the points charged
• d.A guaranteed fixed interest rate for life

HOEPA requires that borrowers of high-cost mortgages receive homeownership counseling from a HUD-approved counselor and a special disclosure at least three business days before consummation. There is no requirement for a points rebate, a lifetime fixed rate, or free title insurance. These protections help ensure borrowers understand the risks of high-cost loans.HOEPA

Under RESPA, when a mortgage loan's servicing is transferred to a new servicer, the borrower must generally receive a notice of transfer from the transferor at least how many days before the effective date?

• a.30 days
• b.60 days
• c.15 days✓
• d.5 days

RESPA requires the transferor (old) servicer to send a servicing transfer notice at least 15 days before the effective date of transfer, and the transferee (new) servicer generally must send its notice within 15 days after. Five days is too short, and thirty or sixty days is not the required lead time. There is also a 60-day grace period during which payments to the old servicer cannot be treated as late.RESPA / Regulation X

A borrower is refinancing her primary home. On the third business day of the rescission period, she decides to cancel. Under TILA, what is the effect of a timely rescission?

• a.The lender may still record the mortgage
• b.The borrower forfeits her earnest money
• c.The security interest becomes void and the lender must return any fees paid within 20 days✓
• d.The borrower must pay a 5% penalty

When a borrower timely exercises the TILA right of rescission, the security interest is voided and the lender generally must return any money or property (fees paid) within 20 calendar days and take steps to reflect termination of the security interest. There is no forfeiture of earnest money, continued recording right, or 5% penalty. Rescission unwinds the transaction.TILA / Regulation Z

Under the FCRA, before a lender may obtain a consumer's credit report, it must have:

• a.A signed purchase contract
• b.A permissible purpose, such as the consumer's application for credit✓
• c.The consumer's fingerprint
• d.Approval from the state regulator

FCRA allows a consumer reporting agency to furnish a credit report only for a permissible purpose, such as in connection with a credit transaction initiated by the consumer. A purchase contract, fingerprint, or state approval is not the FCRA standard. Pulling a report without a permissible purpose violates the FCRA.FCRA

Under Regulation Z, for a closed-end mortgage a borrower may exercise the right of rescission for up to three years if:

• a.The borrower simply changes their mind after three days
• b.The lender failed to deliver the required rescission notice or material disclosures✓
• c.The property value declines
• d.Interest rates fall after closing

If the lender fails to provide the required notice of the right to rescind or material TILA disclosures, the rescission period is extended to up to three years from consummation instead of three business days. A mere change of mind after three days, a decline in value, or a rate drop does not extend rescission. The extended period penalizes disclosure failures.TILA / Regulation Z

Under ECOA, when a lender uses the borrower's application to make a mortgage loan decision, it may consider income from part-time employment or public assistance:

• a.Never, because such income is unreliable
• b.As long as the income is likely to continue, and it may not be discounted merely because of its source✓
• c.Only for government-backed loans
• d.Only if it comes from full-time work

ECOA requires that reliable income not be discounted simply because it comes from part-time work, public assistance, alimony, or similar sources; the key question is whether the income is likely to continue. A lender may not refuse to count such income solely due to its source. It is not limited to full-time work or government-backed loans.ECOA / Regulation B

Under Regulation Z, when a creditor receives a mortgage application, it must provide the applicant with a copy of any appraisal or valuation:

• a.Only if the borrower pays extra for it
• b.Only after the loan closes
• c.Never, unless the loan is denied
• d.Promptly upon completion, or at least three business days before consummation, whichever is earlier✓

Under the ECOA/Regulation B appraisal rule as harmonized with Regulation Z, creditors must provide copies of appraisals and other written valuations promptly upon completion or at least three business days before consummation, whichever is earlier, for first-lien dwelling loans. It is not conditioned on extra payment, delayed to after closing, or limited to denials. Borrowers may waive the three-day timing but still receive the copy.ECOA / Regulation B (12 CFR 1002.14)

Which of the following would most likely violate RESPA's Section 8 anti-kickback provisions?

• a.A title company giving a normal promotional pen to all visitors
• b.Paying a loan officer a salary for work actually performed
• c.A homebuilder giving a real estate agent free vacations in exchange for steering buyers to the builder's affiliated lender✓
• d.A lender providing a borrower a required disclosure

Giving something of value, such as free vacations, in exchange for referrals of settlement service business violates RESPA Section 8. Normal promotional items of nominal value, bona fide salaries for actual work, and providing required disclosures are permissible. The violation hinges on paying for referrals rather than for actual goods or services.RESPA / Regulation X

Under Regulation Z, a mortgage loan generally may include a prepayment penalty only if the loan is a qualified mortgage that is not higher-priced and the penalty:

• a.Is unlimited if disclosed
• b.Is limited in amount and duration (no more than the first three years) and the borrower is offered an alternative loan without a penalty✓
• c.May last for the entire loan term
• d.Applies to all adjustable-rate mortgages automatically

Regulation Z restricts prepayment penalties on covered mortgages: they are allowed only on certain qualified mortgages, are capped in amount, may not extend beyond the first three years, and the lender must offer an alternative loan without a prepayment penalty. Penalties cannot run the full term, apply automatically to all ARMs, or be unlimited merely because disclosed. These limits protect borrowers who refinance or pay early.TILA / Regulation Z

Under the Homeowners Protection Act, when private mortgage insurance is NOT canceled earlier, PMI must terminate at the latest by:

• a.The final payment of the loan
• b.The date the loan reaches 80% LTV
• c.The tenth anniversary of the loan
• d.The first day of the month after the midpoint of the loan's amortization period, if the borrower is current✓

The HPA provides a final termination point: if PMI has not otherwise ended, it must be canceled at the midpoint of the amortization schedule (for example, year 15 of a 30-year loan), provided the borrower is current. Eighty percent LTV is the borrower-request threshold, and the final payment or a tenth anniversary are not the statutory endpoints. This ensures PMI does not continue indefinitely.Homeowners Protection Act

Under Regulation N (Mortgage Acts and Practices Advertising Rule), which of the following mortgage advertising claims would be prohibited?

• a.Providing the lender's licensing information
• b.Noting that rates are subject to change
• c.Falsely implying the ad is from or affiliated with a government agency✓
• d.Stating an accurate APR with required disclosures

Regulation N (the MAP Rule) prohibits material misrepresentations in mortgage advertising, including falsely suggesting government affiliation or endorsement. Accurately stating the APR, noting rates may change, and providing licensing information are truthful and permitted. The rule targets deceptive claims that mislead consumers about mortgage products.MARS / Regulation N

Under TRID, if a lender delivers the Closing Disclosure by mail rather than in person or electronically with confirmed receipt, when is the borrower presumed to have received it for purposes of the 3-business-day waiting period?

• a.Three business days after the disclosure is placed in the mail✓
• b.Seven business days after mailing
• c.On the actual date the borrower signs for it
• d.The same day it is mailed

When the Closing Disclosure is mailed, TRID presumes the borrower received it three business days after it is placed in the mail, so the additional 3-business-day waiting period is measured from that presumed receipt. Same-day receipt is only presumed for in-person or confirmed electronic delivery. Seven business days is unrelated, and the rule uses a presumption rather than the actual signature date unless earlier receipt is shown.TRID