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Question 1 of 3

1. Question
A borrower applies for financing to construct a new primary residence. The lender originates a construction loan with a three-year term and informs the borrower that once construction is completed, the loan may automatically convert into permanent financing without requiring a separate refinance transaction.

The loan officer tells the borrower that RESPA disclosures are unnecessary because construction loans are considered temporary financing.

Which statement best reflects RESPA requirements?
- A) The loan is exempt from RESPA because all construction loans are considered temporary financing
- B) The loan is exempt from RESPA because the borrower will occupy the property as a primary residence
- C) The loan is exempt only if the borrower signs a temporary financing waiver
- D) The loan is generally subject to RESPA because the construction financing may convert to permanent financing and exceeds two years in duration
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Question 2 of 3

2. Question
A mortgage company closes a residential mortgage loan in its own name but simultaneously assigns the loan to another lender that provided the actual funding for the transaction. The mortgage broker claims the transaction qualifies as a secondary market transfer exempt from RESPA.

How is this transaction generally treated under RESPA?
- A) The transaction qualifies as a bona fide secondary market transfer because the loan was assigned after closing
- B) The transaction is exempt because all mortgage broker transactions qualify as secondary market activity
- C) The transaction is generally not treated as a bona fide secondary market transfer because table funding arrangements are not considered exempt secondary market transactions
- D) The transaction is exempt from RESPA because the originating lender did not retain servicing rights
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Question 3 of 3

3. Question
A borrower seeks financing secured by a 30-acre parcel of land containing a single-family dwelling. The borrower intends to use the property as a personal residence and argues that RESPA disclosures should apply because residential property is involved.

Which statement best reflects RESPA applicability?
- A) RESPA applies because the property contains a residential structure occupied by the borrower
- B) RESPA applies because the loan is secured by residential real estate regardless of acreage
- C) RESPA does not apply because loans secured by property consisting of 25 acres or more are exempt regardless of the property's residential use
- D) RESPA applies unless the lender classifies the property as agricultural land
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