CMB - Certified Mortgage Banker Residential Loan Origination Questions and Answers

Question 1

A loan originator is structuring a compensation plan. According to Regulation Z, which of the following methods is permissible?

Accepted Answer

A commission that is a fixed percentage of the loan amount for all transactions.

Answer

A higher commission percentage for loans with a higher interest rate.

Answer

A bonus for each loan that includes a prepayment penalty.

Answer

Compensation tied to the profitability of the mortgage-related business, paid quarterly as a cash bonus.

Question 2

Under the TILA-RESPA Integrated Disclosure (TRID) rule, when must a lender provide the Closing Disclosure (CD) to the borrower?

Accepted Answer

At least 3 business days before loan consummation.

Answer

Within 3 business days of receiving the loan application.

Answer

No later than 7 business days before the scheduled closing date.

Answer

Simultaneously with the delivery of the Loan Estimate.

Question 3

A borrower applies for a mortgage on Monday, January 4th. Assuming no federal holidays, what is the latest date the lender can provide the Loan Estimate (LE) to comply with TRID timing requirements?

Accepted Answer

Thursday, January 7th

Answer

Tuesday, January 5th

Answer

Wednesday, January 6th

Answer

Friday, January 8th

Question 4

Which of the following is a key requirement of the Ability-to-Repay (ATR) rule?

Accepted Answer

Lenders must make a reasonable, good-faith determination that a consumer has the ability to repay the loan.

Answer

The borrower's total debt-to-income ratio cannot exceed 36% under any circumstances.

Answer

The loan must be a 30-year fixed-rate mortgage.

Answer

Lenders are prohibited from originating loans with points and fees.

Question 5

A loan officer receives a bonus for each loan originated that is subsequently sold on the secondary market with a service-released premium above a certain threshold. This compensation practice is likely a violation of which regulation?

Accepted Answer

Regulation Z's Loan Originator Compensation Rule

Answer

The Real Estate Settlement Procedures Act (RESPA)

Answer

The Fair Housing Act

Answer

The Home Mortgage Disclosure Act (HMDA)

Question 6

Under the definition of a Qualified Mortgage (QM), which of the following loan features is generally prohibited?

Accepted Answer

A loan term longer than 30 years.

Answer

A fixed interest rate for the life of the loan.

Answer

Points and fees that are 2% of the loan amount.

Answer

A first lien position.