P3-84 quiz

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Question 1 of 7

1. Question
Which combination of features would classify a mortgage as a High Cost Loan under HOEPA as described in the text?
- A) APR exceeds APOR by 1%, fees are under 1%, and there is no prepayment penalty.
- B) APR is exactly equal to APOR, total fees are 3%, and the prepayment penalty lasts 1 year.
- C) APR exceeds APOR by 6.5% on a first lien (or 8.5% on a subordinate lien), fees exceed 5% of the loan amount, and the prepayment penalty lasts more than 3 years or exceeds 2% of the amount prepaid.
- D) APR exceeds APOR by 10%, but there are no fees or prepayment penalties of any kind.
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Question 2 of 7

2. Question
Which situation best describes an Early Payment Default (EPD) as defined in the text?
- A) The borrower misses a single payment in year five but immediately brings the loan current.
- B) The borrower fails to make one of the first three payments and is 90 days past due within the first 12 months.
- C) The borrower pays late once after ten years of on-time payments.
- D) The borrower refinances the loan within the first year.
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Question 3 of 7

3. Question
What are Yield Spread Premiums (YSPs) as described in the text?
- A) Fees paid by the borrower to lower the interest rate below par.
- B) Monthly servicing fees charged by the loan servicer.
- C) Government subsidies that reduce the lender’s risk on FHA loans.
- D) Compensation paid to the mortgage broker for originating a loan at an interest rate higher than par when the rate is locked.
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Question 4 of 7

4. Question
Which loans are considered Federal Mortgage Loans in the text?
- A) Loans insured by FHA or USDA Rural Housing, or guaranteed by VA, originated by federally approved lenders.
- B) Any loan sold to Fannie Mae or Freddie Mac.
- C) Only loans made directly by federal agencies to consumers.
- D) Any mortgage made in compliance with CFPB regulations.
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Question 5 of 7

5. Question
What must occur when a mortgage loan’s servicing is transferred to a new servicer?
- A) The borrower must immediately refinance with the new servicer.
- B) The current servicer must give at least 15 days’ advance notice with the new servicer’s contact information, and a payment lost in the transfer cannot be reported as late.
- C) The borrower’s loan automatically becomes delinquent during the transfer period.
- D) The new servicer must waive all future late fees for the borrower.
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Question 6 of 7

6. Question
How do lender credits arise in connection with a mortgage transaction, according to the text?
- A) When a borrower pays discount points to reduce the interest rate below par.
- B) When the lender refunds all third-party fees at closing.
- C) When a lender offers a rate above par that produces yield spread premiums used to help pay the borrower’s settlement costs.
- D) When the federal government provides grant funds to the borrower.
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Question 7 of 7

7. Question
How does the text define “High Interest Rates” for purposes of triggering High Cost Loan (HOEPA) disclosures?
- A) Any APR more than 1% above APOR with no additional fees.
- B) Any APR above APOR if the borrower has a low credit score.
- C) Any APR above the lender’s prime rate, regardless of fees or penalties.
- D) APR exceeding APOR by 6.5% on a first lien or 8.5% on a subordinate lien, with total fees over 5% and prepayment penalties beyond 3 years or over 2% of the amount prepaid.
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