Maryland Mortgage Practice

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Holly
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591
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Maryland Mortgage Practice
Updated:
2009-11-02 17:21:22
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Maryland Mortgage Practice
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  1. Under revisions to Maryland's law allowing for transition to the NMLS, licenses are valid for:

    A. 1 year
    B. 2 years
    C. Indefinitely
    D. 18 months
    A. 1 year
    (this multiple choice question has been scrambled)
  2. Lender and loan originator licenses in Maryland that are not renewed according to provisions of the licensing law expire on:

    A. June 15th
    B. July 1st
    C. December 1st
    D. December 31st
    D. December 31st
    (this multiple choice question has been scrambled)
  3. All of the following mortgage professionals are included in the Title 5 licensing requirements of the Maryland Residential Mortgage License Law, except:

    A. loan servicers
    B. loan originators
    C. lenders
    D. mortgage brokers
    B. loan originators
    (this multiple choice question has been scrambled)
  4. Under Maryland's Residential Mortgage License Law, the term "mortgage broker" is used to draw a distinction between lenders to fund loans and brokers who:

    A. fund loans
    B. service loans
    C. provide table-funding for loans
    D. are sole proprietors
    C. provide table-funding for loans
    (this multiple choice question has been scrambled)
  5. Persons making_______or fewer loans per year do not meet the definition of a mortgage lender and are exempt from the licensing requirements of Maryland's licensing law.

    A. 5
    B. 2
    C. 3
    D. 7
    C. 3
    (this multiple choice question has been scrambled)
  6. An individual who is selling his/her own home and provides funds to the buyer by securing the debt with a second mortgage is providing a:

    A. home equity line of credit
    B. loan which triggers licensing requirements
    C. take-back mortgage
    D. reverse mortgage
    C. take-back mortgage
    (this multiple choice question has been scrambled)
  7. Under Maryland law, employees of depository institutions are exempt from the provisions of the licensing law, however they must:

    A. file a letter of exemption with the Maryland Department of Financial Regulation
    B. obtain the same continuing education required of loan originator licensees
    C. be bonded by their employer
    D. register with the NMLS and obtain a unique identifier
    D. register with the NMLS and obtain a unique identifier
    (this multiple choice question has been scrambled)
  8. According to NMLS requirements, an applicant for licensure as a mortgage broker/lender must disclose under oath whether they have been charged or convicted of a misdemeanor related to financial services crimes or fraud within the past______.

    A. 10 years
    B. 7 years
    C. 18 months
    D. 5 years
    A. 10 years
    (this multiple choice question has been scrambled)
  9. Under Maryland law, a mortgage lender licensee who does not lend money, or who lends less than $1,000,000, is required to maintain a net worth of:

    A. $35,000
    B. $25,000
    C. $75,000
    D. $50,000
    B. $25,000
    (this multiple choice question has been scrambled)
  10. Mortgage lenders who annually do business of less than $3,000,000 are required to maintain a surety bond in the amount of:

    A. $25,000
    B. $100,000
    C. $50,000
    D. $150,000
    C. $50,000
    (this multiple choice question has been scrambled)
  11. Mortgage lenders who file five or more applications for licensure of multiple branch offices may obtain a blanket surety bond of________, with Department of Financial Regulation approval.

    A. $750,000
    B. $250,000
    C. $100,000
    D. $500,000
    A. $750,000
    (this multiple choice question has been scrambled)
  12. In conjunction with SAFE Act requirements, the Maryland Residential Mortgage License Law specifies that individuals must complete______hours of education prior to becoming licensed.

    A. 12
    B. 8
    C. 20
    D. 40
    C. 20
    (this multiple choice question has been scrambled)
  13. Once Maryland's transition to the NMLS is complete, the deadline for applying for a license renewal is:

    A. October 1st
    B. December 31st
    C. November 1st
    D. January 31st
    C. November 1st
    (this multiple choice question has been scrambled)
  14. In order to become licensed as a loan originator in Maryland, an individual must submit a total application fee of:

    A. $30
    B. $335
    C. $1,200
    D. $1,120
    B. $335
    (this multiple choice question has been scrambled)
  15. Maryland's Residential Mortgage License Law specifies that the Commissioner cannot use any of the following as the sole reason for finding an individual application unable to meet financial responsibility standards for licensure, except:

    A. involvement in a Chapter 11 bankruptcy proceeding
    B. judgments for child support
    C. foreclosures on his/her principal residence
    D. judgments for medical debts
    B. judgments for child support
    (this multiple choice question has been scrambled)
  16. If a loan originator is no longer employed by a licensed lender/broker, he/she must notify the
    Department of Financial Regulation:

    A. When he/she secures employment with a new lender/broker
    B. Within 30 days
    C. Only if he/she does not intend to become re-employed in the mortgage industry
    D. Within 10 days
    D. Within 10 days
    (this multiple choice question has been scrambled)
  17. An individual is not eligible for licensure as a loan originator if he/she has been convicted of a felony
    within the _____ preceding application for licensure.

    A. Seven years
    B. Ten years
    C. 18 months
    D. Five years
    A. Seven years
    (this multiple choice question has been scrambled)
  18. All of the following are requirements under Title 6 of Maryland's Residential Mortgage License Law
    for the licensing of an affiliated insurance producer/mortgage loan originator, except:

    A. Identity of the insurer with whom the applicant holds an appointment
    B. Information from the insurer on the volume of insurance the applicant produces in a 12-month period
    C. Signature of an authorized representative from the licensee with whom the applicant is affiliated
    D. Identity of the licensee with whom the applicant is affiliated
    B. Information from the insurer on the volume of insurance the applicant produces in a 12-month period
    (this multiple choice question has been scrambled)
  19. Under Maryland law, licensees serving as mortgage brokers must retain records pertaining to loan
    transactions for a period of:

    A. 25 months after the loan is made or denied
    B. 25 months after the borrower makes final payment on the loan
    C. Four years
    D. 36 months after the loan is repaid or sold, whichever comes first
    A. 25 months after the loan is made or denied
    (this multiple choice question has been scrambled)
  20. Pursuant to Maryland law, licensees who serve as loan servicers must provide the Department of
    Financial Regulation with a report about loans serviced in the previous month:

    A. On the 25th of the month
    B. On the 1st of the month
    C. On the last day of the month
    D. On the 15th of the month
    A. On the 25th of the month
    (this multiple choice question has been scrambled)
  21. Conducting execution of a deed of trust on a second mortgage in which of the following locations
    would violate the provisions of the Maryland Residential Mortgage License Law?

    A. The office of the title company handling the mortgage transaction
    B. The office location listed on the broker's license
    C. The business address of the borrower's attorney
    D. The borrower's home address
    D. The borrower's home address
    (this multiple choice question has been scrambled)
  22. In the state of Maryland, it is a violation of the Residential Mortgage License Law for a loan originator to work for more than one licensed lender or exempt lender.

    A. True
    B. False
    A. True
  23. For violations of the Maryland Residential Mortgage License Law, the Commissioner has the
    authority to impose civil penalties of for each violation.

    A. Up to one year in prison
    B. $5,000
    C. $2,500
    D. $1,000
    B. $5,000
    (this multiple choice question has been scrambled)
  24. If the Department of Financial Regulation conducts an investigation of a licensee, the Commissioner
    has the right to do which of the following:

    A. Charge the licensee an hourly rate equivalent to the regular salary of Department investigators
    B. Charge the licensee investigation fees only if a violation is discovered
    C. Charge the licensee an investigation fee of $250
    D. Charge the licensee a fee of $250/day per employee who handles the investigation
    D. Charge the licensee a fee of $250/day per employee who handles the investigation
    (this multiple choice question has been scrambled)
  25. If a Maryland Department of Financial Regulation investigation of a licensee leads to an enforcement
    action, it is at the Commissioner's discretion to report it to the NMLS.

    A. True
    B. False
    B. False
  26. Maryland Department of Financial Regulation's requirements of loan originators specify that when
    communicating and handling transactions with borrowers, they owe the borrowers:

    A. Full disclosure
    B. A fiduciary duty
    C. A duty of good faith and fair dealing
    D. The same responsibility as mortgage lenders
    C. A duty of good faith and fair dealing
    (this multiple choice question has been scrambled)
  27. Maryland regulations state that a loan originator or lender may only recommend a refinance
    transaction to a borrower if:

    A. It results in a tangible net benefit for the borrower
    B. The borrower initiates the request for a refinance
    C. The borrower obtains no cash from the refinance
    D. The originator or lender covers the borrower's closing costs
    A. It results in a tangible net benefit for the borrower
    (this multiple choice question has been scrambled)
  28. Which of the following is one of the reasons for Maryland's Finder's Fee Law?

    A. To establish the maximum fee a mortgage broker may pay a real estate agent for a referral
    B. To discourage mortgage brokers from repeatedly refinancing mortgages with no benefit to the
    borrower
    C. To prohibit mortgage brokers from receiving yield spread premiums
    D. To discourage mortgage brokers from originating high cost loans
    • B. To discourage mortgage brokers from repeatedly refinancing mortgages with no benefit to the
    • borrower
  29. In what way can yield spread premiums be beneficial to borrowers?

    A. Borrowers must attend homeowner counseling before accepting a loan with a yield spread
    B. Loans featuring a yield spread premium tend to have a lower interest rate
    C. Use of yield spread premiums triggers additional consumer protections
    D. Brokers can use yield spread premiums to subsidize closing costs
    premium
    D. Brokers can use yield spread premiums to subsidize closing costs
    (this multiple choice question has been scrambled)
  30. Which of the following is a controversial form of direct compensation for a mortgage broker?

    A. Yield spread premium received from the lender
    B. Fees charged at closing
    C. Title service and attorney's fees
    D. A markup on a third party service such as a credit report fee
    D. A markup on a third party service such as a credit report fee
    (this multiple choice question has been scrambled)
  31. Maryland mortgage brokers are required to provide a borrower with a signed copy of the agreement
    required by the Finder's Fee Law______.
    A. At closing
    B. At least three days prior to closing
    C. Within three business days of application
    D. Within ten business days of application
    D. Within ten business days of application
    (this multiple choice question has been scrambled)
  32. Which of the following statements, if included in borrower agreement under the Finder's Fee Law,
    would most likely be found acceptable to the Maryland Department of Financial Regulation?

    A. We will charge an origination fee ranging from $2,000 to $2,500
    B. We are acting in the capacity of a broker, not a lender, and will charge $1,800 due at settlement
    for loan origination services
    C. We are acting in the capacity of a broker, not a lender, and will charge a fee not to exceed $1,500
    at settlement for our services
    D. We charge broker fees up to $2,800 for origination services
    • B. We are acting in the capacity of a broker, not a lender, and will charge $1,800 due at settlement
    • for loan origination services
  33. Broker compensation, according to Maryland's Finder's Fee Law, may not exceed____ of the
    amount of the loan.
    A. 4%
    B. 6%
    C. 2%
    D. 8%
    D. 8%
    (this multiple choice question has been scrambled)
  34. Under which of the following circumstances is a broker prohibited from accepting a fee for services?

    A. When the broker also serves as the real estate agent for the transaction
    B. When the broker receives a yield spread premium in connection with the loan
    C. When the broker and the lender are two separate entities
    D. When the broker is complying with the Maryland Finder's Fee Law
    A. When the broker also serves as the real estate agent for the transaction
    (this multiple choice question has been scrambled)
  35. The Maryland Finder's Fee Law limits the fees a broker can obtain is a loan is refinanced more than
    once in a______ period.

    A. 12-month
    B. 24-month
    C. Three-year
    D. Six-month
    B. 24-month
    (this multiple choice question has been scrambled)
  36. A borrower obtains a loan on a property for $158,000. 18 months later the mortgage broker refinances
    the mortgage for a loan amount of $180,000. Assuming the broker charges a 3% origination fee, what
    is the most the broker may earn on the refinance transaction?

    A. $5,400
    B. $10,140
    C. $4,740
    D. $660
    D. $660
    (this multiple choice question has been scrambled)
  37. Under which of the following circumstances would a borrower be ineligible for a refund of broker
    compensation, pursuant to the Maryland Finder's Fee Law?

    A. The broker secures a portion of his/her compensation through yield spread premium
    B. The broker violates a provision of the Finder's Fee Law
    C. The borrower rescinds the loan transaction
    D. The loan never goes to settlement
    A. The broker secures a portion of his/her compensation through yield spread premium
    (this multiple choice question has been scrambled)
  38. In the landmark case, Sweeney v. First Savings Mortgage, the broker unsuccessfully argued that________pre-empted Maryland law.

    A. Regulation X
    B. TILA
    C. RESPA
    D. DIDMCA
    D. DIDMCA
    (this multiple choice question has been scrambled)
  39. Several sections of the Maryland Code address repayment ability. In order to consider a borrower's______, income and assets should be carefully verified.

    A. Loan-to-value ratio
    B. Debt-to-income ratio
    C. Creditworthiness
    D. Tax bracket
    B. Debt-to-income ratio
    (this multiple choice question has been scrambled)
  40. The Maryland Code prohibits all of the following lending terms for loans secured by a subordinate
    lien, except:

    A. An acceleration clause
    B. Terms forcing the borrower to waive his/her rights under second mortgage regulations
    C. A security interest on a residential property of less than $10,000
    D. Wage assignment requirements
    C. A security interest on a residential property of less than $10,000
    (this multiple choice question has been scrambled)
  41. Title 12 of Maryland's Commercial Law includes all but which of the following recommendations or
    requirements related to predatory lending?

    A. Provisions discouraging loan flipping
    B. Provisions discouraging balloon payments and prepayment penalties
    C. Required verification of borrower repayment ability
    D. Recommendation for homeowner counseling
    B. Provisions discouraging balloon payments and prepayment penalties
    (this multiple choice question has been scrambled)
  42. Under both federal law and Maryland law, a first lien loan meets the definition of a "higher-priced
    mortgage loan" if it exceeds the average prime offer by:

    A. 8%
    B. 10%
    C. 3.5 percentage points
    D. 1.5 percentage points
    D. 1.5 percentage points
    (this multiple choice question has been scrambled)

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