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FAQ's - MLO's, Loan Officers, Mortgage Brokers, Mortgage Bankers

Overview of Mortgage Lending in United States

1.1- The History of the mortgage industry

1.2- Start of the mortgage industry

1.3- Events leading to the implementation of the federal laws and need for consumer protection.

1.4- What is Role of the Mortgage Loan Originator in consumer protection.

1.5- What is a Mortgage Loan Originator (MLO) and its Job decsiption

1.6- What is a Mortgage Broker and its Job Description?

1.7- What is a Mortgage Banker and its Job Description?

1.8- What is a Registered Mortgage Loan Originator (RMLO) and its Job Description?

1.9- What is a mortgage lender/funder and its Job description?

1.10- What is a mortgage investor and its Job Description?

1.11- What is a mortgage servicer and its Job Description?

1.12- What is a mortgage underwriter and its Job Description?

1.13- What is a mortgage examiner and its Job Description?

1.14- What is a mortgage regulator and its Job Description? 

Regulatory Authorities Overseeing the Mortgage Industry

2.1- What Regulatory Authority Oversees the Mortgage Industry?

2.2- What is the Consumer Financial Protection Bureau (CFPB)

2.3- How does the Federal Govt. oversee the CFPB?

2.4- What Functions are performed by the CFPB?

2.5- What is the oversight authority of CFPB?

2.6- How are complaints Filed with CFPB?

2.7- What is Department of Housing and Urban Development (HUD)?

2.8- What is the Primary function of HUD?

2.9- What are the Programs offered by HUD?

2.10- How many housing agencies are required to be listed on the housing counseling disclosure?

2.11- What Types of loans trigger the requirement for a counseling agency to consult with a borrower?  

2.12- What Entities does HUD oversees?

2.13- What is the Fair Housing Law Protections (e.g., health status, etc.)

Federal Mortgage-Related Laws











 



































 

































 
































































3.155- What are the Independent appraisal requirements ?

Loan Origination





























 


















Loan Inquiry and the Application Process (1003)

















 


























 






5.50- What is the Definition of a business day for delivery purposes and explain Homeownership Counseling Disclosure

Loan Qualification Requirements, Processing, and Underwriting



















































Closing





















  Financial Calculations/Mortgage Math/APR








 



























 

8.38- Explain Prohibition on mortgage insurance on certain loan types








































Traditional and Non-Traditional Mortgage Products










 































 








Mortgage loan products

















 















10.32- Explain facts on interest only payments

Ethical issues and behavior related to loan origination activities









 
























 









  SAFE Act and CSBS/ARRMR Model State Law


































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FAQ's - Tax Professionals, Consultants and Accountants



The purpose of Income Tax planning is to reduce the income taxes paid to federal, state, and local governments. Individuals and families can use two Income Tax Planning strategies to reduce their income tax burdens.

(1) They can Invest in available Tax Advantaged Investment Alternatives.
For example, the investment return provided by investments in municipal bonds is not taxable by the federal government and might also be exempt from state and local income taxes. Various retirement plans allow people to accumulate funds for use in retirement on a tax-deductible and tax deferred basis. People should carefully consider each type of Investment that provides tax advantages.

(2) They can take advantage of tax deductions and tax credits.
The federal Income Tax code allows individuals and families to deduct certain expenses and other amounts from their annual income before calculating their federal income tax liability. Interest paid on their home mortgages, medical expenses that exceed a certain percentage of annual income, contributions to qualifies retirement plans, and amounts contributed to charitable organizations are examples of such deductions. The Federal Income Tax code also allows certain credits to be deducted from an Individual's or a Family's Income Tax Liability. For example, low income workers raising children might be able to use the earned income credit to reduce the amount of federal income tax they must pay.

Income Tax planning can help Individuals and Families increase their current standard of living and increase the amount they can accumulate for retirement and other long term needs. It is an important part of most people's financial planning.

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Glossary of Insurance Terms

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FAQ's - Risk Managers, Consultants, Brokers & Financial Advisors


Risk in our Society
































Insurance and Risk


























Risk Management





























Fundamental Legal Principles





































Analysis of Insurance Contracts

































The Liability Risk









































Understanding Homeowners Insurance













































Other Personal Property and Liability Insurance Coverages
























 Automobile Insurance and Society





















































Commercial Property Insurance
























Commercial Liability Insurance









































Crime Insurance & Surety Bonds








































Fundamentals of Life Insurance






















Types of Life Insurance & Annuities









14.8- What is "Annuitant" specific to Life Insurance and Annuities?

14.9- What is an "Annuity Unit" specific to Life Insurance and Annuities?

14.10- What is "Cash Surrender Value" specific to Life Insurance and Annuities?

14.11- What is "Convertible" specific to Life Insurance and Annuities?


14.13- What is "Debit Agent" specific to Life Insurance and Annuities?




14.17- What is a "Family Policy" specific to Life Insurance and Annuities?













14.35- What is "Renewable" specific to Life Insurance and Annuities?


14.37- What is "Retroactive Method" specific to Life Insurance and Annuities?




Life Insurance Contractual Provisions







15.6- What is "Absolute Assignment" specific to Life Insurance and Annuities?


15.8- What is an "Accidental Death Benefit Rider (double Indemnity)" specific to Life Insurance and Annuities?

15.9- What is an "Automatic premium loan provision" specific to Life Insurance and Annuities?


15.10- What is "Aviation Exclusion" specific to Life Insurance and Annuities?


15.12- What is "Class Beneficiary" specific to Life Insurance and Annuities?

15.13- What is "Collateral Assignment" specific to Life Insurance and Annuities?

15.14- What is "Contingent Beneficiary" specific to Life Insurance and Annuities?

15.15- What is "Cost Of Living Rider" specific to Life Insurance and Annuities?

15.16- What is "Entire Contract Clause" specific to Life Insurance and Annuities?

15.17- What is "Fixed Amount Option" specific to Life Insurance and Annuities?

15.18- What is "Fixed Period Option" specific to Life Insurance and Annuities?

15.19- What is "Grace Period" specific to Life Insurance and Annuities?

15.20- What is "Guaranteed Purchase Option" specific to Life Insurance and Annuities?

15.21- What is "Incontestable Clause" specific to Life Insurance and Annuities?

15.22- What is "Interest Option" specific to Life Insurance and Annuities?

15.23- What is "Irrevocable Beneficiary" specific to Life Insurance and Annuities?

15.24- What is "Life Income Option" specific to Life Insurance and Annuities?

15.25- What is "Misstatement of Age or sex clause" specific to Life Insurance and Annuities?

15.26- What are "Nonforfeiture Laws" specific to Life Insurance and Annuities?



Buying Life Insurance






16.5- What is "Benchmark net cost Indexes" specific to Life Insurance and Annuities?




  Insurance Company Operations









23.8- What is an "Agent's Report" specific to Insurance Company Operations?









23.17- What is "Excess of loss Treaty" specific to Insurance Company Operations?



23.20- What is "Inspection Report" specific to Insurance Company Operations?

23.21- What is "Line Underwriter" specific to Insurance Company Operations?






What is the Objective of Personal Financial Planning?

Personal Financial Planning is the process by which individuals and families develop and implement a comprehensive plan for achieving their financial objectives. The Process requires such decisions as whether setting aside funds for children's college education is more important than saving for retirement, basically a decision involving the priority of financial objective. The goal of personal financial planning is that financial decisions are not made independently, but are made as part of a comprehensive plan that accounts for all of an individual's or family's financial objectives and how those objectives could be reached.


What is the Objective of Insurance?
Insurance enables a person or an organization called the "Policy Holder" or "The Insured" to transfer the financial consequences of a loss to an Insurer. The Insurer, in return, pays the policy holder for the covered losses and distributes the costs of losses among all policy holders. Insurance is just one technique that the organizations use as part of an overall process known as Risk Management.

Who regulates the Insurance Industry?
In the United States, the State Legislature sets broad policy for the regulation of Insurance. It established and oversees the State Insurance Departments, regularly review and revise the State Insurance laws, and approves state regulatory budgets. The State Insurance departments roughly employ 12500 regulatory Employees nationwide.

What are the different types of Insurance and how is it sold?
Insurance can only be sold by licensed Insurance Agents. Insurance Agents must pass a State Specific exam to qualify and obtain an Insurance Agents License after passing a background check. In addition, licensed agents must complete State specific continuing education requirements to maintain their license. A Life and Health License allows an agent to sell Health and Life Insurance and a Property & Casualty License Allows an Agent to sell Personal and Commercial Insurance Products. Some States allow a Limited Lines License for specific type of a product.

What is the difference between Personal and Commercial Lines?
Personal lines is for individuals and families, such as Auto Insurance, Homeowners Insurance, Motorcycle Insurance and Boat Insurance. Commercial Lines is for Businesses and Organizations.

What are different types of Commercial Insurance?

What is Risk Management?
Risk Management is the process of identifying, analyzing, and managing loss exposures in such a way that an organization can meet its objectives.

What is a Loss Exposure?
A Loss Exposure is a possibility of a loss. In other words, if an organization could suffer a particular loss, it is exposed to that type of loss. For example, buildings in the Midwest United States are exposed to tornado damage and therefore are said to have a tornado loss exposure. Tornadoes do not occur in most West coast states, therefore buildings in those areas do not have a loss exposure. Commercial Insurance responds to both property loss exposures and liability loss exposures.

What are the two types of Loss Exposures?
A Property Loss Exposure is the possibility that a person or an organization will sustain a financial loss as the result of damage, destruction, taking or loss of use of property in which that person or organization has a financial interest. The possibility of tornado damage, noted above is an example of a property loss exposure.

A Liability Loss Exposure is the possibility that a person or an organization will sustain a financial loss as the result of a claim being made against that person or organization by someone seeking monetary damages or some other legal remedy. An example of a liability loss exposure is the possibility that a restaurant will be sued by one of its customers who has slipped and fallen because of a water spill on the restaurant's floor.

How are Loss Exposures identified and treated?
Property and Liability Loss Exposures can be identified and treated through the following Risk Management Process.
(1) Identifying and Analyzing loss exposure
(2) Evaluating the various techniques for treating the loss exposure
(3) Selecting the most effective technique or techniques
(4) Implementing the selected technique
(5) Monitoring the program and making needed corrections or adjustments.

What are some of the additional, non-Insurance Risk Management techniques?

Insurance is only one of several risk management techniques and it is almost always used in combination with other techniques. The non-insurance risk management techniques include the following:

(a) Avoidance occurs when an organization avoids an identified loss exposure by choosing not to own a particular item or property or to engage in a particular activity. For example, by not manufacturing a certain product to avoid the potential liability for injuries resulting from the new product.

(b) Loss Control includes any measure to prevent losses from occuring (such as storing gasoline in sealed, approved containers) or to reduce the size of losses that do occur such as an automatic sprinkler system in a building.

(c) Retention is when an organization chooses to pay all or part of its or "self-insures' its losses. For example, a business might choose to self-insure certain exposures or to purchase large deductables on its insurance policies. When the organization has the financial ability to obsorb some or all of its own losses, retention may be less costly in the long run than buying insurance to cover the same losses.

(d) Non Insurance Transfer Occurs when an organization such as a building owner obtains the promise of a second, noninsurance organization "such as a remodeling contractor" to pay for certain losses that would otherwise fall on the first organization. Also known as "Hold Harmless Agreements" or "Indemnity Agreements", non Insurance transfers are commonly included in a wide variety of contracts, such as leases, construction contracts, and purchase agreements. 

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