MLO SAFE NMLS SAFE TEST PRACTICE QUESTIONS AND
ANSWERS NEWEST RATED A+ 2025/2026 NEW!!
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 . - CORRECT ANSWERS Predatory Lending.
RESPA-Real Estate Settlement Procedures Act - CORRECT ANSWERS The Federal Statute that
deals with the settlement of residential mortgage loans.
RESPA's section 9 Prohibits - CORRECT ANSWERS 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. - CORRECT ANSWERS upon completion and 3
business days
TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) - CORRECT ANSWERS 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. - CORRECT ANSWERS 3% (three percent)
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? - CORRECT ANSWERS All loans, whether owner occupied or not.
,A loan subject to HOEPA allows prepayment penalties for the first years of the loan. -
CORRECT ANSWERS 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. -
CORRECT ANSWERS 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? -
CORRECT ANSWERS $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? - CORRECT ANSWERS Specific reasons.
Adverse action means . - CORRECT ANSWERS 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.
Per Regulation B, Lenders should retain certain records for months. - CORRECT
ANSWERS 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. - CORRECT
ANSWERS APOR ( Average Prime Offer Rate), 8.5%
,Regulation C is known as . - CORRECT ANSWERS HMDA, The
Home Mortgage Disclosure Act.
What is the purpose of HMDA? - CORRECT ANSWERS 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? - CORRECT ANSWERS 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. - CORRECT ANSWERS
Servicer, 15 (fifteen) days.
An individual who fails the MLO written exam 3 times must wait months to retake
the exam. - CORRECT ANSWERS 6 (Six) Months
Per RESPA, an annual escrow statement is required to . - CORRECT ANSWERS
determine shortages and surpluses in the escrow account.
When must the Servicing Disclosure Statement be provided to the borrower? - CORRECT
ANSWERS 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. - CORRECT ANSWERS
$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. - CORRECT ANSWERS
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? - CORRECT ANSWERS $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 / . - CORRECT ANSWERS 28%, maximum
housing expense/36% maximum total obligations
HOEPA stands for . - CORRECT ANSWERS Home Ownership
and Equity Protection Act.
RESPA applies to what type of properties? - CORRECT ANSWERS 1-4 Unit Residential
Properties
On a conventional mortgage loan, who makes the final decision regarding approval, denial or
counter offer? - CORRECT ANSWERS The Underwriter
The Civil Rights Act of 1866, prohibited public and private racial discrimination in any property
transaction and was expanded in 1968 in which act? - CORRECT ANSWERS The Civil Rights Act
of 1968, also known as Title VIII of the Civil Rights Act , Also known as Title VIII, Also Known as
The Fair Housing Act
Of the following, which is not required to be disclosed on the TIL statement? The (1) APR, (2)
Note Rate, (3) Finance Charge, (4) Amount Financed or (5) Total of Payments - CORRECT
ANSWERS The note rate is NOT required.
ANSWERS NEWEST RATED A+ 2025/2026 NEW!!
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 . - CORRECT ANSWERS Predatory Lending.
RESPA-Real Estate Settlement Procedures Act - CORRECT ANSWERS The Federal Statute that
deals with the settlement of residential mortgage loans.
RESPA's section 9 Prohibits - CORRECT ANSWERS 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. - CORRECT ANSWERS upon completion and 3
business days
TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) - CORRECT ANSWERS 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. - CORRECT ANSWERS 3% (three percent)
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? - CORRECT ANSWERS All loans, whether owner occupied or not.
,A loan subject to HOEPA allows prepayment penalties for the first years of the loan. -
CORRECT ANSWERS 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. -
CORRECT ANSWERS 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? -
CORRECT ANSWERS $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? - CORRECT ANSWERS Specific reasons.
Adverse action means . - CORRECT ANSWERS 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.
Per Regulation B, Lenders should retain certain records for months. - CORRECT
ANSWERS 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. - CORRECT
ANSWERS APOR ( Average Prime Offer Rate), 8.5%
,Regulation C is known as . - CORRECT ANSWERS HMDA, The
Home Mortgage Disclosure Act.
What is the purpose of HMDA? - CORRECT ANSWERS 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? - CORRECT ANSWERS 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. - CORRECT ANSWERS
Servicer, 15 (fifteen) days.
An individual who fails the MLO written exam 3 times must wait months to retake
the exam. - CORRECT ANSWERS 6 (Six) Months
Per RESPA, an annual escrow statement is required to . - CORRECT ANSWERS
determine shortages and surpluses in the escrow account.
When must the Servicing Disclosure Statement be provided to the borrower? - CORRECT
ANSWERS 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. - CORRECT ANSWERS
$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. - CORRECT ANSWERS
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? - CORRECT ANSWERS $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 / . - CORRECT ANSWERS 28%, maximum
housing expense/36% maximum total obligations
HOEPA stands for . - CORRECT ANSWERS Home Ownership
and Equity Protection Act.
RESPA applies to what type of properties? - CORRECT ANSWERS 1-4 Unit Residential
Properties
On a conventional mortgage loan, who makes the final decision regarding approval, denial or
counter offer? - CORRECT ANSWERS The Underwriter
The Civil Rights Act of 1866, prohibited public and private racial discrimination in any property
transaction and was expanded in 1968 in which act? - CORRECT ANSWERS The Civil Rights Act
of 1968, also known as Title VIII of the Civil Rights Act , Also known as Title VIII, Also Known as
The Fair Housing Act
Of the following, which is not required to be disclosed on the TIL statement? The (1) APR, (2)
Note Rate, (3) Finance Charge, (4) Amount Financed or (5) Total of Payments - CORRECT
ANSWERS The note rate is NOT required.
