Uniform State Content practice

All 6 free uniform state content questions

1. The Secure and Fair Enforcement for Mortgage Licensing Act encouraged the states, acting through two bodies, to establish the Nationwide Mortgage Licensing System and Registry. Which is one of them?

   • A The Conference of State Bank Supervisors Correct
   • B The Department of Housing and Urban Development This department held the federal backup role over a failing state system before 2010, but it was never one of the two bodies the states were told to work through.
   • C The Consumer Financial Protection Bureau The Bureau holds the federal backup role today. It did not exist when this section was written and is not named in it.
   • D The Federal Housing Finance Agency This agency supervises the housing finance enterprises and has no part in the licensing system this section describes.

   The statute encourages the states, acting through the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, to set up the registry, so the two sponsoring bodies are associations of state regulators rather than federal agencies.

   SAFE Act, 12 USC s. 5101

2. Under the Secure and Fair Enforcement for Mortgage Licensing Act, which work falls inside the definition of administrative or clerical tasks?

   • A Collecting processing information and contacting the consumer for it Correct
   • B Advising the consumer which rate option suits her Counseling a consumer about which loan rate to take is outside the clerical definition and is originator work.
   • C Negotiating the loan terms with the consumer Negotiating terms is the activity the licensing requirement exists for, and the clerical definition does not reach it.
   • D Deciding whether the file meets underwriting guidelines The definition covers moving information around, not making the credit decision the information supports.

   The definition covers the receipt, collection and distribution of the information a file needs for processing or underwriting, together with contacting the consumer to obtain it, so assembling the file is clerical while advising or deciding is not.

   SAFE Act, 12 USC s. 5102(4)(C)

3. Under federal law, what must an individual do before engaging in the business of a loan originator?

   • A Obtain and annually maintain a registration or a license Correct
   • B Complete twenty hours of education after the first year Pre-licensing education comes before the license, not after a first year of originating.
   • C Register with the federal banking agency in his state A federal banking agency registers its own institutions' employees. It does not register a state-licensed originator.
   • D File a surety bond with the national registry A bond may be one of the state's conditions for the license, but the bond is filed with the state and is not what this section requires first.

   The statute bars an individual from engaging in the business of a loan originator without first obtaining a registration or a license, maintaining it annually, and obtaining a unique identifier, so a license allowed to lapse mid-year ends the ability to originate.

   SAFE Act, 12 USC s. 5103(a)

4. How many hours of approved pre-licensing education must an applicant for a state loan originator license complete?

   • A At least 20 hours Correct
   • B At least 8 hours Eight hours is the annual continuing education floor, not the pre-licensing requirement.
   • C At least 12 hours The statute names no twelve-hour requirement anywhere in the education provisions.
   • D At least 24 hours A state may add hours of its own, but the federal pre-licensing floor is twenty.

   The statute sets a floor of at least 20 hours of approved pre-licensing education, which must include 3 hours of federal law and regulations, 3 hours of ethics, and 2 hours on lending standards for the nontraditional mortgage product marketplace.

   SAFE Act, 12 USC s. 5104(c)(1)

5. How many hours of approved continuing education must a state-licensed loan originator complete each year?

   • A At least 8 hours Correct
   • B At least 20 hours Twenty hours is the one-off pre-licensing requirement, not the annual one.
   • C At least 12 hours No twelve-hour annual requirement appears in the section.
   • D At least 6 hours Six hours is below the federal floor and would not meet the annual requirement.

   The statute sets an annual floor of at least 8 hours of approved continuing education, made up of at least 3 hours of federal law and regulations, 2 hours of ethics, and 2 hours on nontraditional mortgage product lending standards.

   SAFE Act, 12 USC s. 5105(b)(1)

6. When must a registered mortgage loan originator give a consumer his unique identifier?

   • A On request, before acting, and in the first written communication Correct
   • B Only on the consumer's written request A request is only one of the three triggers, and the rule does not require it to be in writing.
   • C Only on the final loan documents The identifier is owed before the originator acts, which is long before the closing papers.
   • D Within 30 days of the application No thirty-day period appears here. The duty attaches at the earliest of the three triggers.

   The rule sets three triggers: the originator must provide the unique identifier upon request, before acting as a mortgage loan originator, and through the initial written communication with the consumer, so whichever arrives first governs.

   Regulation G, 12 CFR s. 1007.105(b)