MLO SAFE EXAM PREP QUESTIONS
WITH CORRECT ANSWERS
What is the purpose of the SAFE act? - Answer- To enhance consumer protection &
support anti-fraud measures
Who fills out each of the MN forms? - Answer- MU 1 - Company form
MU 2 - Qualifying individual (branch member)
MU 3 - Branch from
MU 4 - Individual (self)
Who fills out the MU 1 Form? - Answer- Company
Who fills out the MU 2 Form? - Answer- Qualifying individual (Branch member)
Who fills out the MU 4 Form? - Answer- Individual (self)
What are responsibilities exclusively given to the state? - Answer- States can deny,
suspend, rebuke, renew, & approve MLO licenses
What is the definition of an MLO? - Answer- Someone who takes an application &
negotiates rates & terms for compensation
What does a processor do? - Answer- Processes info to make sure it's right
What does an Underwriter do? - Answer- Responsible for closing the loan
What does an Appraiser do? - Answer- Determines the value of the home
Who is required to have a license? - Answer- MLOs
Brokers
Independent contractors
Non depository workers
Who is required to get registered with the NMLS? - Answer- Everyone
NMLS - Answer- Nation wide multi-state licensing system and registry
What is the NMLS? - Answer- A centralized database used to monitor & track activity of
MLO's
, What law created NMLS? - Answer- The Safe Act
Who created the NMLS? - Answer- CSBS & AAMR
What does SAFE stand for? - Answer- Secure & fair enforcement for mortgage licensing
act
Who is exempt from needing a license? - Answer- Individuals who perform only purely
administrative or clerical tasks on behalf of a loan originator
Individuals who only extend credit for timeshare plans
Individuals who perform only real estate brokerage activities
Employees of covered financial institutions who are registered with the NMLS
Employees of federal state, local gov agencies, or housing finance agencies
Employee of non profits (501 c3 )
What is the breakdown of the 20hr? - Answer- 3hrs of Federal law
3hrs of Ethics
2hrs of Non-traditional mortgage products
12hrs Elective
What is the breakdown of the continuing education requirement? - Answer- 3hrs of
Federal law
2hrs of Ethics
2hrs of Non- traditional mortgage products
1hr of Elective
When can an MLO get approved for temporary authority? - Answer- MLO has to be
registered in NMLS system for at least a year prior to application OR be licensed for the
30 day period prior to the application AND they must be employed by a state licensed
mortgage company
What is needed to use gift funds? - Answer- A gift letter
What are GSE's - Answer- Government sponsored Enterprises.
Privately held financial institutions that serve the public by increasing the ability of credit
Ex: Fannie Mae & Freddie Mac
GSE - Answer- Government Sponsored Enterprises
What automated underwriting system does Frankie Mac use? - Answer- Do/Du
WITH CORRECT ANSWERS
What is the purpose of the SAFE act? - Answer- To enhance consumer protection &
support anti-fraud measures
Who fills out each of the MN forms? - Answer- MU 1 - Company form
MU 2 - Qualifying individual (branch member)
MU 3 - Branch from
MU 4 - Individual (self)
Who fills out the MU 1 Form? - Answer- Company
Who fills out the MU 2 Form? - Answer- Qualifying individual (Branch member)
Who fills out the MU 4 Form? - Answer- Individual (self)
What are responsibilities exclusively given to the state? - Answer- States can deny,
suspend, rebuke, renew, & approve MLO licenses
What is the definition of an MLO? - Answer- Someone who takes an application &
negotiates rates & terms for compensation
What does a processor do? - Answer- Processes info to make sure it's right
What does an Underwriter do? - Answer- Responsible for closing the loan
What does an Appraiser do? - Answer- Determines the value of the home
Who is required to have a license? - Answer- MLOs
Brokers
Independent contractors
Non depository workers
Who is required to get registered with the NMLS? - Answer- Everyone
NMLS - Answer- Nation wide multi-state licensing system and registry
What is the NMLS? - Answer- A centralized database used to monitor & track activity of
MLO's
, What law created NMLS? - Answer- The Safe Act
Who created the NMLS? - Answer- CSBS & AAMR
What does SAFE stand for? - Answer- Secure & fair enforcement for mortgage licensing
act
Who is exempt from needing a license? - Answer- Individuals who perform only purely
administrative or clerical tasks on behalf of a loan originator
Individuals who only extend credit for timeshare plans
Individuals who perform only real estate brokerage activities
Employees of covered financial institutions who are registered with the NMLS
Employees of federal state, local gov agencies, or housing finance agencies
Employee of non profits (501 c3 )
What is the breakdown of the 20hr? - Answer- 3hrs of Federal law
3hrs of Ethics
2hrs of Non-traditional mortgage products
12hrs Elective
What is the breakdown of the continuing education requirement? - Answer- 3hrs of
Federal law
2hrs of Ethics
2hrs of Non- traditional mortgage products
1hr of Elective
When can an MLO get approved for temporary authority? - Answer- MLO has to be
registered in NMLS system for at least a year prior to application OR be licensed for the
30 day period prior to the application AND they must be employed by a state licensed
mortgage company
What is needed to use gift funds? - Answer- A gift letter
What are GSE's - Answer- Government sponsored Enterprises.
Privately held financial institutions that serve the public by increasing the ability of credit
Ex: Fannie Mae & Freddie Mac
GSE - Answer- Government Sponsored Enterprises
What automated underwriting system does Frankie Mac use? - Answer- Do/Du
