Loan Officer Exam Question and Answers Updated 2026

Loan Officer Exam Question and
Answers Updated 2026
Mortgagor

Grantor

Assignor

Mortgagee

Grantee

AssigneeB-BAnswer-BPromiseBtoBrepayBloan:Bborrower



-BHolderBofBdeed:Bhomeowner



-BTransfersBcontractBrights



-BReceiveBpromiseBtoBrepay:Blender



-BRecipientBofBdeed:BnewBownerB



-BReceivesBcontractBrights



PromissoryBNoteB&BMortgageB(6)B-BAnswer-
BABlegalBdocumentBobligatingBaBborrowerBtoBrepayBaBloanBatBaBstatedBinterestBrateBd
uringBaBspecifiedBperiodBofBtime.B



-BTheBAPRBisBnotBonBtheBnote.



-
BTheBnoteBisBtheBlegalBevidenceBofBtheBdebtBandBisBnotBrecorded.BItBisBtheBborrower'
sBIOU

,-BAllBborrowersBandBco-
borrowersBareBrequiredBtoBsignBtheBnote,BandBtheirBcreditBscoresBmayBbeBaffectedBifB
thereBareBlateBmortgageBpayments.



-
BTheBnoteBisBsecuredBbyBaBmortgage,BwhichBisBaBdocumentBinBwhichBtheBindividualsB
whoBhaveBanBownershipBinterestBinBtheBrealBpropertyB(theirBnamesBonBtheBdeed)Bple
dgeBtheirBpropertyBasBcollateralBforBtheBloanB(thisBisBhypothecation).B



-
BTheBborrowerB(mortgagor)BalsoBpromisesBtoBrepayBtheBloan,BkeepBtheBhomeBinBgood
Brepair;BpayBpropertyBtaxesBandBpayBhazardBinsurance.



ABPurchaseBMoneyBMortgageB(PMM)B-BAnswer-
BABloanBwhichBisBusedBforBtheBpurchaseBofBaBhomeBandBnotBaBrefinance,BhomeBimpr
ovementBorBequityBlineBofBcreditBloan.B



-
BTheBdeedBisBgivenBtoBtheBborrowerBatBclosing,BandBtheBborrowerBmakesBmortgageBp
aymentsBtoBtheBseller.



LienBTheoryBStatesB-BAnswer-
BBorrowerBreceivesBtheBdeedBatBclosingBandBobtainsBoccupancyBofBtheBproperty



-BTheBmortgageBsecuresBtheBdebtBinBlienBtheoryBstates



-
BTheBborrowerBholdsBfullBlegalBandBequitableBtitleBtoBtheBproperty,BandBtheBlenderBha
sBaBrecordedBlienBonBtheBpropertyBasBsecurityBforBtheBloan



TitleBTheoryBStatesB-BAnswer-
BMortgageeB(lender)BorBaBthirdBpartyBkeepsBtheBdeedBuntilBtheBloanBisBsatisfied

, *****finishBthisBcardBlater



GiftBFundsB&BwhoBcanBbeBtheBdonorBorBwhoBcanBnot?B-
BAnswerBothBgov'tBandBconventionalBloansBallowBcashBgiftsBfromBapprovedBclassesBofB
donorsBtoBbeBusedBtoBpayBtheBdownBpayment.BThisBgiftBmustBbeBaccompaniedBbyBaBl
etterBthatBincludes:



-->BDollarBamountBofBtheBgiftBandBdateBfundsBwereBtransferred



-->BDonor'sBstatementBthatBnoBrepaymentBisBexpected



-->BDonor'sBname,Baddress,BtelephoneBnumber,BandBrelationshipBtoBtheBborrower



ApprovedBcashBgiftBdonorsBinclude:

--
>BRelativeBofBtheBborrower,BdomesticBpartner,BfianceeBorBfiance,Bemployer,BcharitableB
organization,BorBgov'tBorBpublicBentityBprovidingBhomebuyerBassistance



DownBpaymentBdonorsBmayBNOTBincludeBpartiesBthatBhaveBinterestBinBtheBpurchaseBt
ransaction

-->BSeller,Bbuilder,BrealBestateBagent,BandBloanBoriginator



**Builders,BrealBestateBagents,BandBloanBoriginatorsBmayBbeBallowed,BwithBlenderBapp
roval,BtoBcreditBpartBofBtheirBtransactionBearningsBtowardBpaymentBofBotherBtypesBofB
borrowerBclosingBcostsB(appraisalBfee,BloanBoriginationBfee,BdiscountBprices,Betc.).BSelle
rsBareBalwaysBallowedBtoBcontributeBtoBsuchBcosts.



BorrowerBFunds:BWhatBareBacceptableBsources?B-BAnswer-
BLendersBwantBtoBseeBaBpaperBtrailBforBtheBfundsBtheBborrowerBusesBforBtheBdownBp
aymentBandBclosingBcostsB(ifBtheBcashBisBundocumentedBitBmayBnotBbeBacceptable)