Kansas MLO flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

OSBC

Kansas Office of the State Bank Commissioner, the agency that licenses mortgage companies and registers loan originators under the Kansas Mortgage Business Act and supervises licensee conduct.

Kansas mortgage company bond

A surety bond required by the OSBC as a condition of licensure; the required amount scales with Kansas origination volume and must remain in force during the license term.

Kansas MLO sponsorship

A Kansas loan originator license is valid only while the originator is sponsored by a licensed Kansas mortgage company; the license does not permit independent origination.

Kansas change notification

Licensees must notify the OSBC of changes in control, principal officers, or business address within the statutory window; failure to report is itself a violation.

OSBC disciplinary authority

The OSBC may deny, suspend, or revoke a Kansas license and impose civil money penalties for fraud, dishonest dealing, SAFE Act violations, or bond and net worth failures.

Unlicensed activity in Kansas

Originating or brokering mortgage loans for compensation without a Kansas license is prohibited; each unlicensed origination is a separate violation supporting cease-and-desist action.

RESPA Section 8

Federal prohibition on fees, kickbacks, or things of value given for referrals of settlement service business; the 8(c) safe harbor protects payment for services actually performed at fair market value.

Loan Estimate timing

Under TRID, the Loan Estimate must be delivered or placed in the mail within three business days after the consumer submits a mortgage application.

Closing Disclosure timing

The Closing Disclosure must be received by the consumer at least three business days before consummation; certain changed terms require a corrected disclosure and a new three-day waiting period.

TRID zero tolerance

No increase is permitted for lender credits, transfer taxes, and fees paid to creditor affiliates when the consumer cannot shop; increases require a valid changed circumstance and revised disclosure.

Ability-to-Repay rule

Regulation Z requires creditors to consider and verify eight underwriting factors, including income, employment, assets, debts, and DTI, before extending a covered residential mortgage loan.

Adverse action notice

ECOA and Regulation B require notice within 30 days after a completed application when credit is denied or terms are changed adversely, stating the reasons for the action.

Flood insurance requirement

For structures in a Special Flood Hazard Area, lenders must require flood insurance, give borrower notice, and ensure coverage equals the lesser of the loan balance or the NFIP maximum.

Debt-to-income ratio

Total monthly debt obligations, including the proposed housing payment, divided by gross monthly income; conventional underwriting commonly caps the result near 43 to 50 percent.

Loan-to-value ratio

The loan amount divided by the lesser of the appraised value or purchase price; combined LTV adds any subordinate lien balances to the first mortgage amount.

PITI payment

The four components of a monthly housing payment: principal, interest, property taxes, and hazard insurance; escrow may also collect mortgage insurance and flood insurance.

Adjustable-rate mortgage caps

Limits on ARM rate changes: an initial cap, a periodic cap per adjustment, and a lifetime cap; the note rate equals the index plus margin subject to these caps.

Rate lock extension

A commitment to hold a specified interest rate for a set period; extending the lock beyond its expiration typically costs a fee expressed in discount points.

Prepaid interest calculation

Interest collected at closing from the closing date through the end of the month, computed as the loan balance times the note rate divided by 365 times the days remaining.

FHA mortgage insurance premium

FHA loans carry an upfront mortgage insurance premium plus an annual premium paid monthly; the annual premium may remain for the life of the loan depending on terms.

NMLS ID disclosure

The originator's unique NMLS identifier must appear on loan documents and advertising as required by state and federal rules, allowing consumers to verify licensure.

SAFE MLO test format

The national test has 120 scored questions plus 10 unscored pretest questions in a 190-minute window; a passing score is 75 percent.

Prelicensure education hours

Twenty hours required before MLO licensure: at least 3 hours federal law, 3 hours ethics, 2 hours nontraditional mortgage products, and the remainder in general origination or state content.

Annual continuing education

Eight hours per year: at least 3 hours federal law, 2 hours ethics, 2 hours nontraditional mortgage products, and 1 hour elective, completed before the state renewal deadline.

GLBA privacy duty

Originators must safeguard nonpublic personal information, provide privacy notices, and limit disclosure of consumer financial data to permitted purposes under federal privacy rules.

Lapsed license consequence

Once a license lapses for failure to renew, complete CE, or pay fees, the originator may not originate loans until the license is reinstated under state rules.

NMLS criminal background check

Fingerprint-based background checks are part of the NMLS application; disqualifying convictions or financial-responsibility findings can bar licensure under SAFE Act standards.

Test integrity rules

Candidates may not share, reproduce, or use unauthorized materials during the NMLS test; violations can void results, and retakes require a new registration and fee after a waiting period.

Duty of good faith

An ethical obligation to deal fairly and honestly with borrowers, avoid conflicts of interest, and refrain from steering consumers into products that benefit the originator at their expense.

Mortgage broker vs banker

A broker arranges funding from third-party lenders without using own funds; a banker funds loans from its own warehouse line and may sell them into the secondary market.

HMDA reporting duty

Covered institutions must collect and report loan-level data, including loan purpose, rate spread, and applicant demographics, to the appropriate federal agency each year.

SAFE Act licensing standard

The SAFE Act requires MLOs to be licensed or registered, meet education and testing standards, and satisfy character and fitness review through the NMLS system.