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MLO SAFE NMLS safe test practice questions with correct answers

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MLO SAFE NMLS safe test practice questions with correct answers Taking advantage of ill-informed consumers through excessively high fees, misrepresented loan terms, frequent refinancing that does not benefit the borrower and other prohibited acts is called __________________________. - ANSWER-P...

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mlo safe nmls safe test practice questions with co

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Copyright © KAYLIN 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH NOVEMBER, 2024

MLO SAFE NMLS safe test practice

questions with correct answers

Taking advantage of ill-informed consumers through excessively high fees, misrepresented loan terms,

frequent refinancing that does not benefit the borrower and other prohibited acts is called

__________________________. - ANSWER✔✔-Predatory Lending.

RESPA-Real Estate Settlement Procedures Act - ANSWER✔✔-The Federal Statute that deals with the

settlement of residential mortgage loans.

RESPA's section 9 Prohibits - ANSWER✔✔-Home sellers from requiring home buyers to purchase title

insurance from a particular company providing title services.

The Dodd-Frank Act modifies ECOA to require a creditor to furnish a copy of an appraisal developed in

connection with a first mortgage_____________________ and absolutely not later than ________

business days prior to closing. - ANSWER✔✔-upon completion and 3 business days

TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) - ANSWER✔✔-Per the Dodd Frank Act, a

single disclosure form combines these 2 statements.

Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and fees may not exceed ________%

of the total loan amount. - ANSWER✔✔-3% (three percent)

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Per a provision of the Dodd-Frank Act mortgage lenders are to determine that a borrower has a

reasonable ability to repay a loan. Does this provision apply to all loans or just owner occupied loans? -

ANSWER✔✔-All loans, whether owner occupied or not.

A loan subject to HOEPA allows prepayment penalties for the first ______ years of the loan. -

ANSWER✔✔-2 (two) years

Per the Dodd-Frank Act an abusive act would include which of the following:

1. One that materially interferes with the consumers ability to understand the product or service.

2. One that take unreasonable advantage of a consumers' lack of understanding.

3. One that takes unreasonable advantage of the consumer's reasonable reliance on the MLO. -

ANSWER✔✔-All three would be considered abusive acts.

Per the Dodd-Frank Act if an MLO receives compensation directly from a consumer, up to how much

additional compensation may be received from a lender in the same transaction? - ANSWER✔✔-$0.00,

dual compensation is not allowed. Compensation must be borrower paid or lender paid.

What kinds of reasons are necessary for a lender to take adverse action with regard to a borrower? -

ANSWER✔✔-Specific reasons.

Adverse action means ______________________. - ANSWER✔✔-A denial or revocation of credit. Also, a

change in the terms of an existing credit arrangement or a refusal to grant credit in substantially the

amount or terms requested.

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Per Regulation B, Lenders should retain certain records for _____________ months. - ANSWER✔✔-25

Months

Because of the impact of the Dodd-Frank Act on a second mortgage, an APR that exceeds the ________

by more than _____% is the trigger that defines a high cost loan. - ANSWER✔✔-APOR ( Average Prime

Offer Rate), 8.5%

Regulation C is known as ________________________. - ANSWER✔✔-HMDA, The Home Mortgage

Disclosure Act.

What is the purpose of HMDA? - ANSWER✔✔-The HMDA determines whether financial institutions are

serving the housing needs of their communities. It also identifies patterns of discriminatory lending.

Under what circumstances can a lender with an Affiliated Business Arrangement require a borrower to

use a specific third party service provider? - ANSWER✔✔-If there are no kickback or referral fees and the

service provider is an attorney, credit reporting agency or appraiser the lender can require that the

borrower uses the provider

If a transfer of servicing occurs, the _______________ must provide a servicing transfer statement not

less than ________ days before the transfer occurs. - ANSWER✔✔-Servicer, 15 (fifteen) days.

An individual who fails the MLO written exam 3 times must wait _________ months to retake the exam. -

ANSWER✔✔-6 (Six) Months

Per RESPA, an annual escrow statement is required to ______________. - ANSWER✔✔-determine

shortages and surpluses in the escrow account.

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When must the Servicing Disclosure Statement be provided to the borrower? - ANSWER✔✔-Within 3

(three) Business Days of the Application.

Any party involved in a federally covered loan that submits fraudulent information is subject to a fine of

up to $___________ and up to __________years in prison. - ANSWER✔✔-$1,000,000 (one million

dollars), 30 years in prison

Per RESPA, an escrow cushion is limited to a maximum of _________ of the annual payments and

surpluses over $_____must be refunded within ________ days. - ANSWER✔✔-1/6th (2 months), $50

(fifty dollars), 30 (thirty) days.

A seller takes back a $100,000 PMM @ 5.5% interest. This straight note will balloon after 10 years of

payments. How much is the balloon payment? - ANSWER✔✔-$100,000 + interest for the last month. A

straight note (term mortgage) is a non-amortizing interest only mortgage. The balloon would include the

entire principal plus the last month's interest, as interest is paid in arrears.

FNMA conforming debt ratios equal ______/________. - ANSWER✔✔-28%, maximum housing

expense/36% maximum total obligations

HOEPA stands for ___________________________. - ANSWER✔✔-Home Ownership and Equity

Protection Act.

RESPA applies to what type of properties? - ANSWER✔✔-1-4 Unit Residential Properties

On a conventional mortgage loan, who makes the final decision regarding approval, denial or counter

offer? - ANSWER✔✔-The Underwriter

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