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Question 1 of 6

1. Question
Negative Amortization

Which of the following is prohibited under HOEPA and Regulation Z?
- A. Adjustable-rate mortgages with rate caps
- B. Negative amortization on high-cost mortgages
- C. Payment schedules with interest-only periods
- D. Refinances done within 12 months
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Question 2 of 6

2. Question
Payment Schedules

HOEPA prohibits which of the following payment schedule structures?
- A. A monthly payment plan calculated using principal and interest only
- B. A weekly payment schedule
- C. A schedule that consolidates more than two periodic payments and pays them in advance from proceeds
- D. A payment schedule using bi-weekly payments
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Question 3 of 6

3. Question
Interest Rate Increase

Which action is prohibited under HOEPA regarding interest rates?
- A. Increasing the interest rate during the fixed-rate period
- B. Increasing the interest rate when the borrower changes insurance providers
- C. Increasing the interest rate after default on a high-cost mortgage
- D. Increasing the interest rate when property taxes increase
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Question 4 of 6

4. Question
Refund Calculation

When acceleration occurs due to default, what refund calculation method is prohibited?
- A. The U.S. Rule
- B. The actuarial method
- C. Any method more favorable to the consumer
- D. Any method less favorable than the actuarial method
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Question 5 of 6

5. Question
Contractor Payments

Which contractor-related action is prohibited for high-cost mortgages?
- A. Paying the borrower’s utility deposits
- B. Paying a contractor under a home-improvement contract directly from loan proceeds (with exceptions)
- C. Paying HOA fees in advance
- D. Paying property insurance from proceeds
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Question 6 of 6

6. Question
Secondary Market Notice

Which of the following is prohibited regarding secondary-market transactions involving high-cost mortgages?
- A. Selling the mortgage without servicing rights
- B. Selling the mortgage before the rescission period ends
- C. Selling a high-cost mortgage without providing a high-cost mortgage notice to the assignee
- D. Selling the loan with escrow accounts included
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