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NC Fundamentals of Residential Mortgage Loan Origination - NC Laws


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NC Senate Bill 1149 that went into effect on July 1, 2000 is also known as the:
North Carolina Predatory Lending Act (PLA)
The Acronym "PLA" refers to the:
North Carolina Predatory Lending Act (PLA)
The NC Predatory Lending Act (PLA) was intended to do what three things:
"1. Discourage ""High Cost Loan"" transactions
2. Limit the amount and types of fees charged by lenders and brokers and
3. Restrict the use of prepayment penalties in North Carolina."
NC Predatory Lending Laws covers what three Areas?
NC Predatory Lending Laws covers what three Areas? "1. Allowable Fees on first mortgages.
2. High Cost Loans
3. Unfair and Deceptive Trade Practices."
According to the PLA (NC) there are no limits on what fees?
"1. Application Fee
2. Origination Fee
3. Discount Fee (bona fide)
4. Commitment Fee
5. Assumption Fee
6. Appraisal Fee
7. Thrid Party Fees (bona fide)
8. Miscellaneous Fees: .25% of the loan amount or $150.00, WHICHEVER IS GREATER."
According to the NC Predatory Lending Act (PLA) what fees are PROHIBITED?
"1. Processing Fees
2. Underwriting Fees
3. Document Preparation Fees
4. Administrative Fees"
According to the NC Predatory Lending Act (PLA) what are the thresholds for a "High Cost Loan"
"1. APR at more than 8% more than Treasury Securies in Interest -- Same As HOEPA.
2. More than 5 % in Fees and Points provided the loan is $20K or more. (The lesser of $1,000 or 8% if less than $20K)
3. Prepayment penalty that is in aggregate more than 2% of the amount to be repaid or the lender charges a prepayment more than 30 months after the closing."
The NC Predatory Lending Act (PLA) strictly prohibits the charging of ANY prepayment on loans under $_________.
True or False, According to the NC PLA, a Yield Spread Premium (YSP) paid to the broker by the lender, but not paid by the borrower should be included in the calculation the points and fees threshold for High Cost Loans.
False -- Any fees paid to a mortgage broker NOT paid by the borrower should NOT be included in the points and fees calculation.
According to the NC Predatory Lending Act (PLA), High Cost Loans are not illegal. However, two limitations make high cost loans, almost undoable:
"1. Loan fees may not be financed into th enew loan amount.
2. The borrower must attend home ownership counseling as a condition of receiving a ""High Cost Loan"" (which are not frequently offered and discourage High Cost Loans)"
According to the NC Predatory Lending Act (PLA), the three other prohibitions of High Cost Loans are:
"1. Negative Amortization
2. Balloon Payments
3. Lending without regard to the applicant's ability to repay the debt."
Predatory Lending Laws are commonly referred to as __________ laws.
Usary Laws
Per the NC Predatory Lending Act (PLA): Any violations of the high cost loan statutes are considered _______ ___ ___________ _____ ________.
Unfair and deceptive Trade Practices.
A prevailing plantiff in an "Unfair and Deceptive Trade Practices" suit would mean that ____________________ are available.
Attorney Fees and Treble Damages.
Define Flipping:
Flipping is the practice of refinancing an existing loan with the new loan not having a reasonable, tangible net benefit to the borrower, considering all the circumstances.
Single Premium Credit, Life, Healty, Disability, or Unemployment Insurance ⬦..
may not be financed into a new loan, although monthly premium insurance is permitted.
The NC PLA requires a Sample Amortization Schedule within 3 days, and an amortization schedule of the borrowers specific loan within:
3 days of closing.
The Acronym MLA represents:
The North Carolina Mortgage Lending Act (MLA)
The North Carolina Mortgage Lending Act was enacted:
July 1, 2002.
The North Carolina Mortgage Lending Act was enacted to license Mortgage Bankers and Mortgage Brokers and Loan Officers who⬦
Engage in the practice of Mortgage Lending.
What employment status must a Loan Officer operate under?
The NC MLA requires that you must have a mortgage license if you either directly, or indirectly..
Engage in the practice of Mortgage Lending.
The NC MLA requires that if you are involved in the soliciatation and acceptance of applications
you must have a mortgage license
The NC MLA requries that if you are employed, compensated, or appointed as an agent or loan officer⬦
you must have a mortgage license
Per the NC MLA a license of a loan officer is not effective unless⬦
Employed by a mortgage broker or mortgage banker.
Per the NC MLA, changes in employment status must be reported by both the employer and the loan officer within _________.
15 Days.
A person who has completed and filed their application for license with the Commissioner but who has not yet received their license may act as a loan officer if what three criteria are met?
"1. Their license has not been previously revoked
2. They are employed by a licensed broker or banker that can certify in writing that they are qualified; and
3. The have within a 6 month period prior to date of application been employed or acted as a loan officer for an excmpt entity."
Qualifications for a loan officer include:
"1. Be 18 years of age
2. Have satisfactorily completed a mortgage lending fundamentals course approbed within 3 years immediately preceding application date.
3. Pay $50 for license plus $46 Application Fee."
Additional Provisions to become a Mortgage Broker or Mortgage Banker include:
"1. 3 Years of Experience
2. Have one person as managing principal.
3. Post a surety bond for $150,000 Mortgage Banker; $50,000 Mortgage Broker.
4. Each pricipal office and each branch office of a mortgage broker/banker must have a separate license.
5. the initial application fee is $1,000 plus $100 per branch office for any portion of the first licensing year beginning July 1 and ending the following June 30."
All Mortgage Licenses expire:
June 30 each year.
The renewal Fees for Mortgage Licenses are?
"1. $50 for Loan Officer
2. $500 for Mortgage Banker
3. $500 for Mortgage Broker."
Licenses not renewed prior to the expiration date incur an additional $_____ fee.
IF license is not renewed and the renewal penalties are not paid withing ________ days after June 30, the license is terminated.
A loan officer may not simultaneously be employed by two mortgage brokers/bankers -- True/False
Continuing Education requirements for Mortgage Loan Officers/Brokers/Bankers is:
8 hours annually.
A prohibited activity under the MLA is the failure to promptly pay reasonable fees to a⬦
Licensed Appraiser for appraisal services that are requested in writing from mortgage banker/broker and are performed by the appraiser.
It is prohibited to influence through coercion, extortion or bribery the development, reporting, result or review of ⬦
A Real Estate Appraiser.

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