Question # 1 (Multiple Choice) Fred is applying for a loan to finance the purchase of a new car. Because he wants to try to qualify for the mortgage interest tax deduction, he asks you to accept a mortgage on his house, rather than the car, to secure the loan.

A) This loan would not be subject to RESPA because it is not home purchase, improvement, or refinance.
B) This loan would be subject to RESPA because it is to an individual, primarily for a personal, family or household purpose, and it will be secured by a mortgage on real property on which there is a 1- to 4-family dwelling.
C) This loan would be exempt from RESPA under the abundance of caution exception.
D) This loan falls within the conversion exception to RESPA, as it involves a car loan being converted to a home loan.

Question # 2 (True/False) RESPA is a disclosure statute. It does not specify what you can charge for. It merely governs how you document your charges and fees.

A) True
B) False

Question # 3 (Multiple Choice) Daphne has found a beautiful wooded lot just outside town. She comes to you for a construction loan. The term of the loan will be 22 months. With the proceeds, she will buy the lot and build the house.

A) This loan is covered by RESPA because part of the proceeds will be used to transfer title to the first user.
B) This loan will be exempt from RESPA because the test for RESPA is what constitutes the collateral at the time of making the loan. At the time of making the loan, the collateral will be vacant land, so RESPA will not apply.
C) This loan is exempt from RESPA under the temporary financing exemption because it is for a term of under two years.
D) This loan is exempt from RESPA because there is a blanket exemption for all construction loans.

Question # 4 (True/False) Rhonda is selling her house to Phoebe. Phoebe will be assuming Rhonda's mortgage loan under a provision in the mortgage that allows assumptions without lender approval. Since Phoebe will become your customer upon the consummation of the assumption, you must provide a HUD-1 to her at the time of closing.

A) True
B) False

Question # 5 (Multiple Choice) The mortgage servicing disclosure is required to be given in which of the following situations:

A) On all RESPA-covered loans.
B) On only those RESPA-covered loans which are Residential Mortgage Transactions.
C) On only those RESPA-covered loans in which the lender is receiving a first mortgage lien.
D) On only those RESPA-covered loans in which the lender is receiving a subordinate lien.
E) The mortgage servicing disclosure is never required on RESPA-covered loans.

Question # 6 (True/False) Haskell is applying for a loan to purchase a mobile home that he plans to occupy as his principal dwelling. You will be receiving a security interest in his mobile home as collateral, but you will not be getting a mortgage on real property, as he intends to park it on his parent's land. This loan will not be covered by RESPA.

A) True
B) False

Question # 7 (Multiple Choice) Bob's business is really growing. He needs some additional cash to finance its expansion, plus, he wants to pay for a new addition to his house, so he comes to you for a loan. The collateral for the loan will be a mortgage on his house. The amount of the loan request is $82,000. Bob tells you he plans to use $48,000 of the proceeds for his business expansion.

A) This loan will be covered by RESPA. When a loan is a mixed purpose loan, the collateral is a mortgage on a dwelling, and at least 25% of the proceeds are used for a personal purpose, RESPA applies.
B) This loan is exempt form RESPA because home improvement loans are not covered and this is partially a home improvement loan.
C) This loan is covered by RESPA because it is to an individual and is secured by real property upon which there is a dwelling.
D) This loan is exempt from RESPA because it is a business loan.

Question # 8 (Multiple Choice) Nedra and Jim own a piece of property they built a home on. Now that it's paid off, they want to get a loan secured by the equity in it so they can buy an RV and travel around the country. They offer to give you a mortgage on their house and the 25 acres it sits on to secure the loan.

A) The loan will be exempt from RESPA because it is a loan secured by 25 acres.
B) The loan will be covered by RESPA, because in order for it to be exempt, the property would need to be OVER 25 acres.
C) The loan will be covered by RESPA because they eliminated the exemption for large tracts of land.
D) The loan will be covered by RESPA because it is a home equity loan.

Question # 9 (True/False) Bill and Jackie are buying an eight unit dwelling. They will occupy one of the units as their principal dwelling. They come to you seeking financing, and will be pledging the real property as collateral. This loan is exempt from RESPA.

A) True
B) False

Question # 10 (Multiple Choice) Linda and Sean want to refinance their existing home mortgage loan.

A) Refinancings are not covered by RESPA if they involve the same creditor.
B) Refinancings are not covered by RESPA unless they involve new money.
C) All refinancings are exempt from RESPA, regardless of whether they involve the same creditor or new money.
D) This loan would be covered by RESPA.

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