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Question 1 of 6

1. Question
A mortgage servicer implements new compliance procedures designed to improve oversight of borrower accounts, document servicing actions, and ensure proper handling of mortgage servicing obligations under Regulation X.

Which statement best reflects the purpose of mortgage servicing policy and procedure requirements?
- A) Servicing policies exist primarily to increase loan production volume
- B) Mortgage servicing policies are intended to ensure accurate information management, proper servicing oversight, and compliance with borrower protection requirements
- C) Regulation X servicing procedures apply only to delinquent mortgage loans
- D) Mortgage servicing policies are optional for nonbank servicers
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Question 2 of 6

2. Question
A mortgage servicer transfers servicing rights for a borrower’s loan to another servicer. Several months later, regulators request copies of servicing records and documentation relating to actions previously taken on the borrower’s account.

Under Regulation X record retention requirements, how long must mortgage servicing records generally be maintained?
- A) Until the next annual escrow analysis is completed
- B) For 30 days after servicing transfer
- C) Until one year after the loan is discharged or servicing is transferred
- D) Only while the borrower remains current on payments
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Question 3 of 6

3. Question
A mortgage servicer reviews a borrower’s file and notices that the homeowner’s hazard insurance policy appears to have lapsed. Before beginning force-placed insurance procedures, the servicer conducts an internal review to determine whether there is reliable evidence showing that coverage is no longer active.

Why is this review important under Regulation X requirements?
- A) A servicer must have a reasonable basis to believe the borrower failed to maintain required hazard insurance before imposing force-placed insurance procedures
- B) Force-placed insurance may be imposed automatically whenever a policy renewal date passes
- C) Hazard insurance requirements apply only to federally insured mortgage loans
- D) Servicers are prohibited from reviewing borrower insurance records
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Question 4 of 6

4. Question
A mortgage servicer determines that a borrower’s hazard insurance policy may have expired and plans to assess force-placed insurance charges against the borrower’s account.

Under Regulation X, what must the servicer generally do before assessing those charges?
- A) Immediately purchase force-placed insurance without notifying the borrower
- B) Wait until foreclosure proceedings begin before providing notice
- C) Mail or deliver an initial written notice at least 45 days before assessing charges and request proof of hazard insurance coverage
- D) Provide notice only after force-placed insurance charges appear on the borrower’s monthly statement
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Question 5 of 6

5. Question
After sending the initial force-placed insurance notice to a borrower, a mortgage servicer prepares to continue the force-placed insurance process because no evidence of coverage has yet been received.

Under Regulation X timing requirements, what additional notice must generally be provided?
- A) A reminder notice must be sent at least 30 days after the initial notice and at least 15 days before assessing charges or fees
- B) A foreclosure notice must be sent within seven business days
- C) A second reminder notice is required only after force-placed insurance charges are assessed
- D) No additional notices are required once the initial notice is delivered
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Question 6 of 6

6. Question
A mortgage servicer sent both the required initial and reminder notices regarding force-placed hazard insurance. Before assessing insurance charges, the servicer reviews the file one final time to determine whether proof of continuous insurance coverage has been received from the borrower.

Under Regulation X, when may the servicer generally proceed with force-placed insurance charges?
- A) Immediately after the initial notice is mailed
- B) Only after the borrower signs a force-placed insurance acknowledgment form
- C) When, by the end of the 15-day period after the reminder notice, the servicer still has not received evidence that required hazard insurance remained continuously in place
- D) Only after obtaining court approval
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