Exam (elaborations)
NMLS Safe Test Mortgage Licensing Practice Exam with 100% correct answers 2022-23
NMLS Safe Test Mortgage Licensing Practice Exam with 100% correct answers 2022-23
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NMLS SAFE TEST MORTGAGE LICENSING PRACTICEEXAM WITH 100% CORRECT ANSWERS 2022-23
Which federal law requires that the Loan Estimate be provided to the borrower within three
business days of the time of loan application is taken? - (ANSWER)TILA
What type of scam entails homeowners who are encouraged to refinance their property over and
over until little or no equity remains? - (ANSWER)Loan flipping or churning
After a loan closing, funds are disbursed. When are the funds disbursed for an owner-occupied,
residential refinance? - (ANSWER)After 3 business-day rescission period
What is the adjustable number used to compute the interest rate on an ARM called? -
(ANSWER)Index
A borrower is buying a house for $180,000. He provides a down payment of $40,000. If he pays
three discount points, what is the total cost of the points? - (ANSWER)$4200
Which day is counted as part of the CD three business day delivery period? -
(ANSWER)Monday-Saturday
A Latina applies to a mortgage company for a home loan. She is refused based on the reputation
of the neighborhood for a high number of foreclosures. This is an example of what illegal
practice? - (ANSWER)Redlining
Which Act amended the Truth in Lending Act, establishing disclosure requirements and
prohibiting equity stripping and other abusive practices in connection with "high cost"
mortgages? - (ANSWER)Home Ownership and Equity Protection Act (HOEPA)
The type of mortgage that can provide the borrower with a monthly check instead of the
borrower paying a monthly payments is known as - (ANSWER)Reverse mortgage
,According to the Fair Credit Reporting Act, if adverse action is taken against a credit applicant
because of information on a credit report, the lender who used that report is required to -
(ANSWER)provide to the consumer the name, address, and telephone number of the consumer
reporting agency that furnished the report and the credit score used
At closing, the buyers realizes that the lender changed the terms of the loan, but since he was
facing foreclosure, he felt he had no choice but to go ahead with the refinance or lose the house.
This could be an example of - (ANSWER)Predatory lending
The SAFE Act - (ANSWER)Establishes minimum standards for licensing and registering
mortgage loan originators
In a note, what gives the lender the right to charge the borrower a fee for retiring the loan early? -
(ANSWER)Prepayment penalty
Regulation B implements the Equal Credit Opportunity Act. True or False? - (ANSWER)True
Which item is NOT included in the calculation that determines the annual percentage rate?
a. the broker's origination fee
b. the lender's discount points
c. the mortgage insurance premium
d. the title insurance premium - (ANSWER)The title insurance premium (D)
Under RESPA, who would be subject to fines and penalties if a kickback is paid? -
(ANSWER)All parties paying or receiving a kickback
A conforming loan is a loan that - (ANSWER)Follows the secondary market criteria set by
Fannie Mae/Freddie Mac
MLO Jon from ABC Mortgage is meeting with a potential borrower. What may Jon NEVER ask
about during the loan application process? - (ANSWER)Religion
,The clause in the mortgage that makes the note due in full upon sale or transfer of a property is
call a(n) - (ANSWER)Alienation clause AKA "due at sale clause"
The APR is required to be disclosed in a Truth in Lending statement is the -
(ANSWER)Relationship between the total cost of borrowing and the actual amount borrowed
Which of the following is NOT included as a protected class by the Equal Credit Opportunity
Act?
a. martial status
b. receipt of public assistance
c. religion
d.Social security - (ANSWER)D
The rate that is used to amortize the mortgage loan and determining the monthly loan payments
is known as the - (ANSWER)note rate
The loan officer knows that the applicants source of income is public assistance, so he tells the
applicant not to waster his time filling out an application and paying any fees. What federal law
has the loan officer violated? - (ANSWER)ECOA
A subordination clause in a morgage - (ANSWER)Puts the mortgage in first lien position over an
earlier recorded mortgage
Where do the funds for FHA loans come from? - (ANSWER)approved lenders
An applicant for a mortgage has recurring monthly debt of $425 and a gross monthly income of
$3,850. For a conforming loan, what is the maximum house payment- including PITI- for which
she qualifies? - (ANSWER)$961.00
, What is the loan-to-value if the loan amount is $139,500, the appraised value is $164,117 and the
sales price is $155,000?
**remember to use lower number of either appraised value or sales price** - (ANSWER)90%
To comply with the Safeguard Rules of Gramm, Leach, Bliley, a loan officer should -
(ANSWER)place all loan applications and documentation in a secure place when not working on
them
VA loans allow for a maximum LTV of what percent? - (ANSWER)100%
Byuyer with a credit score of 703 makes an offer of $156,000 on a house that was appraised for
$162,000. If the seller accepts his offer, how much will he have to pay down on a FHA loan? -
(ANSWER)$5,460
Private mortgage insurance (PMI) is NOT required when - (ANSWER)the loan has been paid
down to less than 78% of the property's current value
The federal Truth in Lending Act - (ANSWER)regulates advertising with references to mortgage
interest rates
When qualifying a borrower, an installment debt down not need to be included in the debt ration
on conventional loans when the balance of the term of repayment is less than how many months?
- (ANSWER)10
Market value can best be defined as a property's - (ANSWER)most probable selling price
How many business days from the day of application does the creditor have to deliver the Loan
Estimate? - (ANSWER)3
What document does the VA use to determine the amount of a veteran's entitlement? -
(ANSWER)COE
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