MLO TESTBANK QUESTIONS WITH
100% CORRECT ANSWERS
(GRADED A+)
Which law allows a consumer who has had her credit card used by an identity thief to
place a credit freeze on her credit report? - Answer- FACT ACT
Which law requires creditors to TRUNCATE debit and credit card info on receipts? -
Answer- FACT ACT
Which regulation requires that loan officers must take measures to secure and dispose
of (burn and/or shred) a borrower's sensitive credit information? - Answer- FACT ACT
Which regulation states that if a borrower is denied credit, he can receive a FREE of his
credit copy report? - Answer- FCRA Fair Credit Reporting Act REG V
Which regulation states that if a borrower is unemployed, he can receive a FREE of
copy his credit report? - Answer- FCRA Fair Credit Reporting Act REG V
Which regulation states that if a borrower is on SSI or Disability, he can receive a FREE
of copy his credit report? - Answer- FCRA Fair Credit Reporting Act REG V
Which regulation states that if a borrower has been the victim of fraud, he can receive a
FREE of copy his credit report? - Answer- FCRA Fair Credit Reporting Act REG V
Which regulation states that a borrower can receive a FREE of his credit copy report
once a year? - Answer- FACT ACT
During the loan process, if you ask a borrower if he is single...which law are you
violating? - Answer- ECOA REGULATION B
Which regulation states that the only correct way to ask about a borrower's martial
status is: are you married, unmarried or separated? - Answer- ECOA- Reg B
Who is responsible for providing the closing disclosure to the borrower? - Answer- The
Creditor/Lender
,Who is responsible for providing the closing disclosure to the Seller? - Answer-
Settlement Agent/Title Agent
Which regulation requires the borrower to receive the Loan Estimate? - Answer- TILA
REG Z
Which regulation requires the borrower to receive the Closing Disclosure? - Answer-
TILA REG Z
Who issues a Satisfaction of Mortgage? - Answer- The document issued by the
mortgage when the mortgage loan is paid in full. Also called a "release of mortgage."
What is a Second Mortgage? - Answer- A mortgage made subsequent to another
mortgage and subordinate to the first one
Who's part of the Secondary Mortgage Market? - Answer- The market, into which,
primary mortgage lenders sell the mortgages they make to obtain funds to originate
more new loans. This includes investors such as Fannie Mae, Ginnie Mae and Freddie
Mac.
What is a Security? - Answer- The property that will be pledged as collateral for a loan
A Seller Carry Back is of agreement? what type - Answer- An agreement in which the
owner of a property provides financing often in combination with an assumable
mortgage.
Who is a Servicer? - Answer- An organization that collects from principal and interest
payments the borrowers and manages borrower's escrow accounts
What is Servicing? - Answer- All the steps and operations a lender performs to keep a
loan in good standing, such as collection of payments, payment of taxes, insurance,
property inspections and the like.
What are Settlement/Settlement Costs? - Answer- Expenses over and above the price
of the property that are incurred by buyers and sellers when transferring ownership of a
property. Also called Closing Costs. Closing costs normally include an originator fee,
property taxes, charges for title insurance and escrow costs, appraisal fees, etc. Closing
costs will vary according to the area country and the lenders used.
Who creates Sweat Equity? - Answer- Equity created by a purchaser performing work
on a property being purchased
A Tax Lien is a claim against what? - Answer- A claim against a property for unpaid
taxes
,What is a Tax Sale? - Answer- Public sale of property, by a as result of government
authority, nonpayment of taxes
A Title shows what? - Answer- A document, which gives evidence of an individual's
ownership of property
A Total Expense Ratio (back-end ratio/total debt ratio) includes what? - Answer- Total
obligations (PITI + all debt) divided by the gross monthly income expressed as a
percentage.
What law deals with credit, APR & advertising of consumer loans? - Answer-
TILA/REGULATION Z
Which regulation prohibits kickbacks? - Answer- RESPA
Which regulations requires the lender to cancel PMI when the loan reaches 78% LTV? -
Answer- HPA Homeowners Protection Act
Which regulation prohibits fee splitting? - Answer- RESPA
"X" is the letter used to describe which Regulation? - Answer- RESPA
RESPA is the acronym used to describe which Law? - Answer- Real Estate Settlement
Procedures Act
What type of mortgage requires a non- refundable funding fee? - Answer- VA LOAN
What is the provision in a mortgage enabling a lender to demand full repayment if the
borrower DEFAULTS on the loan? - Answer- Acceleration Clause
What is the provision in mortgage enabling a lender to demand full repayment if the
borrower DEFAULTS on the loan? - Answer- Alienation Clause
What does CFPB Stand for? - Answer- Consumer Financial Protection Bureau
What two laws created the CFPB - Answer- Dodd Frank act and the Consumer Finance
Protection Act
Which regulations is designed to help meet the Credit Needs of the Communities in
which it operates? - Answer- CRA Community Reinvestment Act
Under ECOA rules and regulations, họw many days does the borrower have to request
a copy of an appraisal report if the application was denied? - Answer- 90
Under ECOA rules and regulations, how many days does the lender have to provide a
copy an appraisal of report, once requested by the borrower? - Answer- 30
, If a loan application is APPROVED, under ECOA rules and regulations, when MUST a
copy of the appraisal be provided to the borrower? - Answer- 3 business days
Conforming Loans follow the guidelines of which regulators? - Answer- Fannie Mae and
Freddie Mac
Which regulation requires the lenders to 66 "BE EQUAL" when extending credit to
borrowers? - Answer- ECOA Regulation B
How old must a borrower be to qualify for a reverse mortgage? - Answer- 62
Which regulations has the primary function of preventing Identity Theft? - Answer-
FACT Act
Which regulation has SECTION 114 Rules? - Answer- FACT Act
Which regulation requires the creditor to verify the VALIDITY of any change of address?
- Answer- SECTION 114 of the FACT Act
What is the payment method used in a reverse mortgage that allows the homeowners to
receive a monthly check while living in the property? - Answer- TENURE Method
What is the fraud scheme where a borrower uses someone else's name to purchase the
property, but that person WILL NOT be living at the property? - Answer- Straw borrower
What government lender "insures" mortgages? - Answer- FHA
What government lender "guarantees" mortgages? - Answer- VA Loans
What government lender loans money to fund purchases in rural areas? - Answer-
USDA/Department of Agriculture
What is the value remaining in property after all liens and debts have been paid? -
Answer- Equity
A borrower os refinancing his home. How much time does Reg Z give him to change his
mind? - Answer- 3 days
Which Regulation established the 3-day right of rescission rule? - Answer- TILA/REG Z
Blockbusting part is of which regulation/Law? - Answer- Fair Housing Act
Steering is part of which regulation/law? - Answer- Fair Housing Act
100% CORRECT ANSWERS
(GRADED A+)
Which law allows a consumer who has had her credit card used by an identity thief to
place a credit freeze on her credit report? - Answer- FACT ACT
Which law requires creditors to TRUNCATE debit and credit card info on receipts? -
Answer- FACT ACT
Which regulation requires that loan officers must take measures to secure and dispose
of (burn and/or shred) a borrower's sensitive credit information? - Answer- FACT ACT
Which regulation states that if a borrower is denied credit, he can receive a FREE of his
credit copy report? - Answer- FCRA Fair Credit Reporting Act REG V
Which regulation states that if a borrower is unemployed, he can receive a FREE of
copy his credit report? - Answer- FCRA Fair Credit Reporting Act REG V
Which regulation states that if a borrower is on SSI or Disability, he can receive a FREE
of copy his credit report? - Answer- FCRA Fair Credit Reporting Act REG V
Which regulation states that if a borrower has been the victim of fraud, he can receive a
FREE of copy his credit report? - Answer- FCRA Fair Credit Reporting Act REG V
Which regulation states that a borrower can receive a FREE of his credit copy report
once a year? - Answer- FACT ACT
During the loan process, if you ask a borrower if he is single...which law are you
violating? - Answer- ECOA REGULATION B
Which regulation states that the only correct way to ask about a borrower's martial
status is: are you married, unmarried or separated? - Answer- ECOA- Reg B
Who is responsible for providing the closing disclosure to the borrower? - Answer- The
Creditor/Lender
,Who is responsible for providing the closing disclosure to the Seller? - Answer-
Settlement Agent/Title Agent
Which regulation requires the borrower to receive the Loan Estimate? - Answer- TILA
REG Z
Which regulation requires the borrower to receive the Closing Disclosure? - Answer-
TILA REG Z
Who issues a Satisfaction of Mortgage? - Answer- The document issued by the
mortgage when the mortgage loan is paid in full. Also called a "release of mortgage."
What is a Second Mortgage? - Answer- A mortgage made subsequent to another
mortgage and subordinate to the first one
Who's part of the Secondary Mortgage Market? - Answer- The market, into which,
primary mortgage lenders sell the mortgages they make to obtain funds to originate
more new loans. This includes investors such as Fannie Mae, Ginnie Mae and Freddie
Mac.
What is a Security? - Answer- The property that will be pledged as collateral for a loan
A Seller Carry Back is of agreement? what type - Answer- An agreement in which the
owner of a property provides financing often in combination with an assumable
mortgage.
Who is a Servicer? - Answer- An organization that collects from principal and interest
payments the borrowers and manages borrower's escrow accounts
What is Servicing? - Answer- All the steps and operations a lender performs to keep a
loan in good standing, such as collection of payments, payment of taxes, insurance,
property inspections and the like.
What are Settlement/Settlement Costs? - Answer- Expenses over and above the price
of the property that are incurred by buyers and sellers when transferring ownership of a
property. Also called Closing Costs. Closing costs normally include an originator fee,
property taxes, charges for title insurance and escrow costs, appraisal fees, etc. Closing
costs will vary according to the area country and the lenders used.
Who creates Sweat Equity? - Answer- Equity created by a purchaser performing work
on a property being purchased
A Tax Lien is a claim against what? - Answer- A claim against a property for unpaid
taxes
,What is a Tax Sale? - Answer- Public sale of property, by a as result of government
authority, nonpayment of taxes
A Title shows what? - Answer- A document, which gives evidence of an individual's
ownership of property
A Total Expense Ratio (back-end ratio/total debt ratio) includes what? - Answer- Total
obligations (PITI + all debt) divided by the gross monthly income expressed as a
percentage.
What law deals with credit, APR & advertising of consumer loans? - Answer-
TILA/REGULATION Z
Which regulation prohibits kickbacks? - Answer- RESPA
Which regulations requires the lender to cancel PMI when the loan reaches 78% LTV? -
Answer- HPA Homeowners Protection Act
Which regulation prohibits fee splitting? - Answer- RESPA
"X" is the letter used to describe which Regulation? - Answer- RESPA
RESPA is the acronym used to describe which Law? - Answer- Real Estate Settlement
Procedures Act
What type of mortgage requires a non- refundable funding fee? - Answer- VA LOAN
What is the provision in a mortgage enabling a lender to demand full repayment if the
borrower DEFAULTS on the loan? - Answer- Acceleration Clause
What is the provision in mortgage enabling a lender to demand full repayment if the
borrower DEFAULTS on the loan? - Answer- Alienation Clause
What does CFPB Stand for? - Answer- Consumer Financial Protection Bureau
What two laws created the CFPB - Answer- Dodd Frank act and the Consumer Finance
Protection Act
Which regulations is designed to help meet the Credit Needs of the Communities in
which it operates? - Answer- CRA Community Reinvestment Act
Under ECOA rules and regulations, họw many days does the borrower have to request
a copy of an appraisal report if the application was denied? - Answer- 90
Under ECOA rules and regulations, how many days does the lender have to provide a
copy an appraisal of report, once requested by the borrower? - Answer- 30
, If a loan application is APPROVED, under ECOA rules and regulations, when MUST a
copy of the appraisal be provided to the borrower? - Answer- 3 business days
Conforming Loans follow the guidelines of which regulators? - Answer- Fannie Mae and
Freddie Mac
Which regulation requires the lenders to 66 "BE EQUAL" when extending credit to
borrowers? - Answer- ECOA Regulation B
How old must a borrower be to qualify for a reverse mortgage? - Answer- 62
Which regulations has the primary function of preventing Identity Theft? - Answer-
FACT Act
Which regulation has SECTION 114 Rules? - Answer- FACT Act
Which regulation requires the creditor to verify the VALIDITY of any change of address?
- Answer- SECTION 114 of the FACT Act
What is the payment method used in a reverse mortgage that allows the homeowners to
receive a monthly check while living in the property? - Answer- TENURE Method
What is the fraud scheme where a borrower uses someone else's name to purchase the
property, but that person WILL NOT be living at the property? - Answer- Straw borrower
What government lender "insures" mortgages? - Answer- FHA
What government lender "guarantees" mortgages? - Answer- VA Loans
What government lender loans money to fund purchases in rural areas? - Answer-
USDA/Department of Agriculture
What is the value remaining in property after all liens and debts have been paid? -
Answer- Equity
A borrower os refinancing his home. How much time does Reg Z give him to change his
mind? - Answer- 3 days
Which Regulation established the 3-day right of rescission rule? - Answer- TILA/REG Z
Blockbusting part is of which regulation/Law? - Answer- Fair Housing Act
Steering is part of which regulation/law? - Answer- Fair Housing Act
