California Mortgage Law Practice Exam Answers

California Mortgage Law Practice Exam Answers

 

If a broker receives payments related to a property management contract or a loan servicing contract whereby the broker is entitled to a part of the money as fees, the broker must deposit the funds in the trust account and must withdraw the fees:

 

Within 25 days

 

 

Mitigating factors that mortgage lenders offset the risk associated with nontraditional loan products may include each of the following EXCEPT:

 

Rising real estate prices

 

The continuing education courses required renew a California mortgage loan originator license or endorsement must included each of the following topics EXCEPT:

 

Laws regarding usury

 

 

Which of the following statements is correct regarding the net worth and surety bond requirements for California Residential Lenders:

 

The minimum surety bond is $50,000 and the net worth requirement is $250,000

 

 

An applicant for a real estate license endorsement as a California mortgage originator would be EXEMPT from the requirements to obtain a California real estate license:

 

Under no circumstance

 

An individual has twice failed the California portion the NMLS examination would be able to retake the test:

 

Only after a 30 day waiting period

 

 

The annual fee charged by the California Division of Corporations to licensed finance lenders is based on the lender’s:

 

Gross Income

 

 

Under the laws and regulations enforced by the California Bureau of Real Estate, trust fund accounts must be reconciled at least:

 

Monthly

 

 

Under the California Business and Professions Code, the maximum fine for falsely holding one’s self out to be a real estate licensee is:

 

$20,000

 

 

Under the laws and regulations enforced by the California Bureau of Real Estate, a broker is permitted to maintain how much of the broker’s own money in the trust account:

 

$200

 

 

A married couple owns a home together and both are listed as borrowers on the mortgage for that home. The couple gets divorced, and the court orders the house to become the sole property of one of the spouses. A due-on-sale clause in the loan documents would be enforceable:

 

Unless both spouses are still obligated for the mortgage payments

 

 

Under the CRMLA, an employee of a licensed residential mortgage lender who is acting as a mortgage broker for a customer may charge which of the following fees or charges prior to the closing of the loan:

 

Both fees for 3rd party services such as appraisal and credit report fees and an application fee

 

The maximum fine that the California Division of Corporations can levy under the California Finance Lenders Law for a violation of the law or regulations applicable to mortgage lending or loan origination activities is:

 

$25,000

 

 

A California real estate broker runs an advertisement stating that the firm is able to arrange mortgage loans on a “stated income” basis. Assuming that the statement is true, what additional information must be included in the advertisement under the BRE Commissioner’s regulations:

 

A statement that the loan may have a higher interest rate, more points or more fees that loans which are fully documented

 

 

The maximum damages that can be awarded under the Holden Act is:

 

$1,000

 

 

Under the California Civil Code, mortgage payments are considered to be late payments if they are rec: eived more that how many days after the due date

 

10 days

 

 

Under the California Civil Code, late payment charges cannot exceed the greater of $5 or:

 

6% of the amount of the payment

 

 

An individual would not be required to obtain a mortgage loan originator license or endorsement in California if that individual specialized in originating loans regarding only:

 

Timeshares

 

 

When a licensee receives a notice of intention to suspend a license from the Commissioner of the Division of Corporations pursuant to the discovery of a civil judgment against the licensees duties under the CRMLA, the licensee must cease all licensed activities:

 

Immediately upon receipt of the notice of intention

 

A California real estate broker runs an advertisement offering a specific APR for a fixed-rate, fully-amortized loan, but without any other specific information. The broker is indeed able to offer such loans at the stated APR. What additional information must be included in this advertisement under the Commissioner’s regulations:

 

Whether the APR applies to first loans, junior loans, or both

 

 

In order to be exempt from the provisions of the California Foreclosure Prevention Act, lenders must be able to show that the lender:

 

Has developed a loan modification programs that meet specified standards

 

 

If a licensed real estate firm wishes to engage in mortgage loan origination activities in California, a mortgage loan originator endorsement would be required for:

 

Broker licensees (both corporate and individuals) and those salespersons licensees who participate in mortgage loan origination activities

 

Under the California Administrative Procedures Act, if a licensee receives a notice from the Commissioner of the BRE or the DOC that the Commissioners is intended to suspend that person’s license, the licensee has how many days from the date of service to request a hearing:

 

15 calendar days

 

Applicants for which of the following types of California licenses are required to submit audited financial statements as part of the application process:

 

Residential mortgage lenders only

 

 

Which of the following would be EXEMPT under the definition of mortgage loan originator as defined in California Law?

 

Both those engaged in loan modification efforts and those engaged in financing timeshare interests

 

 

Each of the following statements regarding prepayment charges is true under the California Civil Code, EXCEPT:

 

Prepayment penalties cannot exceed nine months advance interest on any prepayment which exceeds 20% of the original loan balance

 

 

A person licensed as a mortgage broker under the California Finance Lenders Law could broker loans for:

 

Finance lenders only

 

The California Civil Code requires how much advance notification of a balloon payment:

 

At least 90 days, but no more than 150 days before the due date

 

 

When a California real estate broker receives funds which should be deposited into a trust account, the deposit must be made within:

 

3 business days

 

 

The maximum fine for an individual who has the mortgage loan originator endorsement to his or her California real estate license and who charges advance fees for mortgage loan origination services is:

 

$10,000

 

 

A consumer has obtained a civil judgment against a real estate licensee for violations of the California Business and Professions Code and has been unable to collect the judgment despite diligent efforts to do so. Each of the following statements about a possible claim against the Recovery Account is correct, EXCEPT:

 

The consumer must file the application for compensation within 3 years of the date of the judgment

 

The annual fee charged by the California Division of Corporation to licensed residential mortgage lenders is based on the lender’s:

 

Loan volume

 

A person who holds a California mortgage lender license or endorsement must take how many hours of continuing education courses to renew the license or endorsement:

 

8 hours

 

 

An applicant for licensure or endorsement who had committed a felony that involved an act or fraud, dishonesty, or a breach of trust, or money laundering would be disqualified if that felony had been committed within how long from the date of the application:

 

Any period whatsoever

 

 

The California Division of Corporations enforces which of the following state laws:

 

Both the California Finance Lenders Law and the California Residential Mortgage Lenders Law

 

 

In order to obtain a California real estate brokers license in order to qualify for an endorsement as a mortgage loan originator, a person must meet each of the following requirements, EXCEPT:

 

Net worth requirements

 

An officer or director of a corporation that has applied for licensure as a California residential mortgage lender would cause that application to be denied if that person had committed a crime:

 

Within the past 10 years

 

 

Each of the following agencies plays a role in regulating the mortgage lending business in California, EXCEPT:

 

The Division of Banking

 

 

An applicant for licensure or endorsement as a California mortgage loan originator would be disqualified if the applicant had committed any felony within how long from the date of the application:

 

7 years

 

 

What is the minimum surety bond required for an individual who has a mortgage loan originator endorsement to his or her California real estate salesperson license:

 

There is no surety bond requirement for the endorsement

 

 

If a loan is subject to the provisions of California’s Covered Loan Law, which of the following statements is CORRECT regarding the applicability of a prepayment penalty to that loan:

 

Prepayment penalties are prohibited after the loan has been in place for 36 months

 

Under the California law regarding foreclosure consulting or loan modification services, each of the following statements is correct, EXCEPT:

 

The consultant can only purchase the subject property at the price verified by an independent appraisal firm

 

Each of the following statements is true regarding loans subject to the Covered Loan Law, EXCEPT:

 

Negative amortization is strictly prohibited

 

 

Laws which prohibit racial and other forms of discrimination in California include each of the following, EXCEPT:

 

The California Redlining Act

 

 

A willful and knowing violation of the Covered Loan Law can result in a minimum suspension of license of:

 

6 months for a first offense and 3 years for subsequent offenses

 

 

The California Bureau of Real Estate receives most of its revenues from:

 

Examination, license and subdivision fess

 

 

Under California Law, what is the maximum criminal penalty for an individual for a violation of the law relating to foreclosure consulting or loan modification:

 

A fine of up to $10,000 plus up to one year in county jail

 

A lender which is licensed through the California Division of Corporations requires, borrowers to obtain hazard insurance coverage of 150% of the replacement cost of the improvements on the subject property. This is:

 

Illegal

 

 

Which of the following statements is correct regarding thee use of mortgage brokerage agreements under the California Residential Mortgage Lending Act:

 

Residential mortgage lenders cannot advertise themselves as mortgage brokers, only as residential mortgage lenders

 

 

A California mortgage loan originator who works for a licensed residential mortgage lender adds the initials “CMB” behind his name, despite the fact that he has not earned that designation. This practice is:

 

Illegal and could result in suspension and/or being barred from employment by a licensee