Mortgage and Lending Questions

A first lien loan has an amount of $150,200, an APR of 12.9%, and an APOR of 6.2%. What is the difference between the APR and APOR?

• 5.8%

• 6.7%

• 7.2%

• 8.1%

A first lien manufactured/mobile home loan has an amount of $69,700, an APR of 11.5%, and an APOR of 6.2%. Is this loan higher-priced under TILA Section 35?

• Yes

• No

Taco just bought a house, but he forgot to check if he was in a lien theory state or a title theory state. Now he’s confused because the title is being held by a trustee!

Which of the following best describes Taco’s situation?

• "Congrats, Taco! You live in a title theory state, where a trustee holds the title until the loan is paid."

• "Bro, I think you just bought someone else's house by accident."

• "You’re actually renting, but no one told you."

• "Just tell the trustee you ‘called dibs’ on the title and demand it back."

A first lien loan has an amount of $99,999, an APR of 9.6%, and an APOR of 6.2%. What is the difference between the APR and APOR?

• A) 2.8%

• B) 3.4%

• C) 4.1%

• D) 5.0%

Kody was pumped to start his new career as a refinance Mortgage Loan Officer (MLO). He had big dreams of helping homeowners save money—but things did not go as planned.

Instead of focusing on actual borrowers, Kody spent most of his workday offering refinancing advice to his plants and playing "relaxing ocean sounds" at full volume in his home office. Within months, his pipeline dried up, his commission checks shrank, and he couldn’t make the payments on his 1-bedroom yoga studio in Ferndale.

After missing 120 days of mortgage payments, Kody received a terrifying foreclosure notice. In a desperate move, he called Jaylan for advice.

What should Jaylan tell Kody?

• “Bro, it’s time to pack up your essential oils and surrender to the universe.”

• “Have you tried refinancing your own loan? Oh wait… never mind.”

• “You're cooked bro.”

• “You might qualify for loss mitigation—ask your lender about loan modification or forbearance!”

A first lien loan amount is $78,276, the APR is 9.7%, and the APOR is 3.4%. Is this loan considered higher-priced under TILA Section 35?

• Yes

• No

Which of the following is NOT one of the 8 Borrower Considerations for Ability to Repay (ATR) under Section 43 of TILA?

• Income and assets

• Employment

• Home equity value

• Credit history

Under the Ability to Repay (ATR) rule, which of the following is considered ILLEGAL?

• A) Determining a borrower’s ability to repay based on income and assets

• B) Evaluating a borrower’s credit history before approving a loan

• C) Approving a loan primarily based on the borrower’s home equity

• D) Considering a borrower’s debt-to-income (DTI) ratio before approving a loan

Which of the following loans would be considered a Non-Qualified Mortgage (Non-QM)?

• A) A loan with an APR that is 2.5% over APOR

• B) A loan with a 30-year term, full amortization, and a 3% fee cap

• C) A loan where the borrower’s income is not verified

• D) A loan where the lender considers the borrower’s DTI ratio

Which of the following factors is NOT one of the eight borrower considerations under ATR?

• Employment status

• Monthly mortgage payments

• Credit history

• Estimated property appreciation