Regulatory Compliance & Lending Guidelines Flashcards
7 cards from real CMPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Compliance & Lending Guidelines flashcards as text
Under FHA guidelines, what is the maximum seller concession allowed on a purchase with less than 10% down payment?
Answer: 6% of the purchase price
FHA allows seller concessions up to 6% of the sales price regardless of the down payment amount, unlike conventional loans which vary by LTV.
Which of the following loan types is EXEMPT from the TRID (TILA-RESPA Integrated Disclosure) requirements?
Answer: Home Equity Line of Credit (HELOC)
HELOCs are exempt from TRID requirements and instead use disclosures governed separately by TILA's Regulation Z rules for open-end credit.
What does the Appraiser Independence Requirements (AIR) policy, established after the housing crisis, primarily prohibit?
Answer: Loan production staff from selecting, retaining, or influencing appraisers
AIR prohibits anyone with an interest in the loan transaction, including loan production staff, from improperly influencing appraisers or the appraisal process.
A VA loan requires the veteran to pay the VA funding fee. Which borrower group is EXEMPT from this fee?
Answer: Veterans with service-connected disabilities receiving compensation
Veterans receiving VA compensation for service-connected disabilities are exempt from paying the VA funding fee on VA-guaranteed home loans.
Under the Safe Mortgage Licensing Act (SAFE Act), a new MLO applicant must complete how many hours of pre-licensing education?
Answer: 20 hours
The SAFE Act requires MLO license applicants to complete at least 20 hours of pre-licensing education covering federal and state mortgage law, ethics, and non-traditional products.
Under USDA Rural Development loan guidelines, which of the following income is used to determine program ELIGIBILITY (not repayment ability)?
Answer: Adjusted household income for all persons living in the household
USDA eligibility is based on adjusted annual household income for all persons living in the home, not just qualifying borrowers, which may include family members not on the loan.
Which of the following best describes the purpose of the Loan Estimate's 'In 5 Years' row?
Answer: Shows total paid and principal reduction in the first 5 years to aid loan comparison
The 'In 5 Years' row on the Loan Estimate shows total payments made and the principal paid down in 60 months, helping borrowers compare different loan products.