Sec4-161

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Question 1 of 8

1. Question
A borrower is reviewing closing costs and sees recording fees listed on the settlement documents. What are recording fees generally used for in a mortgage closing?
- A) They pay for recording the Warranty Deed and Security Deed or Mortgage with the local municipality
- B) They pay the borrower’s first monthly mortgage payment
- C) They pay for the lender’s credit report and underwriting review
- D) They pay only for private mortgage insurance premiums
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Question 2 of 8

2. Question
A loan originator is asked whether a city or county charges tax or stamp fees on a mortgage transaction. What is the proper source for determining whether those local charges apply?
- A) The borrower’s credit report
- B) The loan originator’s preferred rate sheet
- C) The local city or county municipality or a local closing attorney
- D) The borrower’s hazard insurance company
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Question 3 of 8

3. Question
In a state that charges transfer tax and intangible tax, how are these charges commonly calculated?
- A) Transfer tax is usually calculated on the borrower’s income, and intangible tax is calculated on the property taxes
- B) Transfer tax is usually calculated on the sales price, and intangible tax is usually calculated on the loan amount
- C) Both taxes are always calculated only on the appraised value
- D) Both taxes are always paid as a flat federal charge
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Question 4 of 8

4. Question
A purchase contract is being reviewed to determine who must pay state tax and stamp charges. What should the parties understand about responsibility for paying these fees?
- A) They are always paid by the seller and cannot be negotiated
- B) They are always paid by the lender as a cost of doing business
- C) They are always split equally between buyer and seller by federal law
- D) Whether the buyer or seller pays may be negotiable, so the contract must be reviewed carefully
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Question 5 of 8

5. Question
A lender requires a wood infestation report on a purchase transaction. What is the purpose of this pest inspection report?
- A) To determine whether the borrower qualifies for a lower interest rate
- B) To determine the existence of wood-destroying insects
- C) To verify the borrower’s monthly income
- D) To replace the need for title insurance
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Question 6 of 8

6. Question
A borrower asks whether a wood infestation report is always required on a refinance transaction. What guidance does the manual provide?
- A) Many lenders do not require a wood infestation report on a refinance, so the lender should be checked
- B) Federal law requires a wood infestation report on every refinance
- C) Only the seller can order a wood infestation report on a refinance
- D) A refinance cannot close if no pest inspection is ordered by the borrower
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Question 7 of 8

7. Question
A lender does not require a survey for closing. What should borrowers still be advised about obtaining a survey?
- A) They should avoid a survey because it has no value once title insurance is issued
- B) They should obtain a survey only if the property is new construction
- C) They should be advised to obtain a survey because boundary issues may create costly problems later
- D) They are prohibited from paying for a survey themselves
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Question 8 of 8

8. Question
Under the TRID 2.0 requirements effective October 1, 2018, what must lenders disclose regarding certain borrower-paid settlement items?
- A) Only lender origination charges
- B) Customary Borrower Fees, including items such as HOA or condominium dues, home inspection fees, home warranty fees, pest inspection fees, or survey fees
- C) Only prepaid interest and escrow deposits
- D) Only fees paid to the real estate agents
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