MLO SAFE NMLS safe test practice
questions EXAM LATEST WITH
ACTUAL QUESTIONS AND
CORRECT VERIFIED ANSWERS
ALREADY GRADED A+ 100%
GUARANTEED PASS!
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.
On an ARM loan, a lenders cost plus profit would be included in the
________________. - ✔✔ANSWER✔✔>>Margin
According to HPA, when does PMI automatically terminate? - ✔✔ANSWER✔✔>>At
78% LTV (loan to value) according to the original amortization schedule. Not calculated
by a re-appraisal of the property.
HMDA is regulation ____________________. - ✔✔ANSWER✔✔>>C, Regulation C of
the HMDA, Home Mortgage Disclosure Act
Per the TILA, are appraisal fees included in the finance charge calculation? -
✔✔ANSWER✔✔>>No, per the truth in lending act, third party fees such as appraisal
and credit report fees are generally not included in finance charge calculations.
If a loan product is advertised at at 6% APR, what else has to be included in the
advertisement? - ✔✔ANSWER✔✔>>Nothing, per the truth in lending act, when the APR
is included in the advertisement, their disclosure requirements are satisfied.
,A ______________________ loan encumbers both real and personal property. -
✔✔ANSWER✔✔>>Package mortgage
A ________________ mortgage encumbers more than one parcel of land. -
✔✔ANSWER✔✔>>Blanket mortgage
The clause that allows a lender to declare the entire loan amount due immediately
because of a borrowers default is called ____________________. -
✔✔ANSWER✔✔>>Acceleration Clause
When one lender/investor closes a loan in their own name using the funds of another
lender/investor it is called ____________________. - ✔✔ANSWER✔✔>>Table Funding
Has a mortgage broker that gives a restaurant coupon for less than $50 to a real estate
agent as a thank you gift for a referral violated any law? If so, which law? -
✔✔ANSWER✔✔>>Yes, RESPA, the Real Estate Settlement Procedures Act prohibits
payment or receipt for "anything of value" for a referral.
Who insures an FHA loan? - ✔✔ANSWER✔✔>>FHA, the Federal Housing
Administration
Per the SAFE Act, if a state does not have a recovery fund it must have
______________ or __________________. - ✔✔ANSWER✔✔>>an established
minimum net worth or surety bonding requirement.
A Veteran's entitlement for a VA loan can be found on which of the following? 1. COE,
2.CRV, 3.NOV, 4.NOE - ✔✔ANSWER✔✔>>COE, Certificate of Eligibility
Which Federal Law defines a non-traditional loan? 1. HOEPA, 2. RESPA, 3. SAFE act,
4. TILA - ✔✔ANSWER✔✔>>3. SAFE Act
Section 9 of RESPA prohibits a ___________ from requiring the ________________ to
use a particular title insurance company as a condition of sale. -
✔✔ANSWER✔✔>>Seller, Buyer
Per ECOA the age of an applicant can be considered if it allows a creditor to favor
applicants _________ years and over. - ✔✔ANSWER✔✔>>62 Years
Because of the impact of the Dodd-Frank Act, an APR exceeding the _________ by
___________% is the trigger that defines a high cost loan on a first mortgage. -
✔✔ANSWER✔✔>>APOR, Average Prime Offer Rate 6.5%
,For a 90% LTV conventional loan, what percent of the down payment has to be made
from the borrower's personal cash reserves? - ✔✔ANSWER✔✔>>5%, The remaining
5% may be a gift from a family member, equity in another property traded to the seller,
or credit from rent already paid in a lease/purchase.
Which of the following are considered to be debts?
A. Car lease
B. Student Loan
C. Utility Payments
D. Insurance Payments - ✔✔ANSWER✔✔>>(A) Leases and (B) Loans are defined as
debts as they are recurring and cannot be cancelled.
Per FNMA, the process of purchasing existing properties with the intention of
immediately selling them for a profit is called ________________. -
✔✔ANSWER✔✔>>Flipping
Property purchased at a low price, appraised at a high value without a valid reason and
resold at a higher price is ___________. - ✔✔ANSWER✔✔>>Illegal flipping
Per Regulation Z and the ATR (ability to repay), in an ARM (adjustable rate mortgage)
the creditor must use the ____________payment possible. -
✔✔ANSWER✔✔>>Highest
The transfer of title to land from one person to another is called ________________. -
✔✔ANSWER✔✔>>A conveyance
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)
, 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.
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
questions EXAM LATEST WITH
ACTUAL QUESTIONS AND
CORRECT VERIFIED ANSWERS
ALREADY GRADED A+ 100%
GUARANTEED PASS!
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.
On an ARM loan, a lenders cost plus profit would be included in the
________________. - ✔✔ANSWER✔✔>>Margin
According to HPA, when does PMI automatically terminate? - ✔✔ANSWER✔✔>>At
78% LTV (loan to value) according to the original amortization schedule. Not calculated
by a re-appraisal of the property.
HMDA is regulation ____________________. - ✔✔ANSWER✔✔>>C, Regulation C of
the HMDA, Home Mortgage Disclosure Act
Per the TILA, are appraisal fees included in the finance charge calculation? -
✔✔ANSWER✔✔>>No, per the truth in lending act, third party fees such as appraisal
and credit report fees are generally not included in finance charge calculations.
If a loan product is advertised at at 6% APR, what else has to be included in the
advertisement? - ✔✔ANSWER✔✔>>Nothing, per the truth in lending act, when the APR
is included in the advertisement, their disclosure requirements are satisfied.
,A ______________________ loan encumbers both real and personal property. -
✔✔ANSWER✔✔>>Package mortgage
A ________________ mortgage encumbers more than one parcel of land. -
✔✔ANSWER✔✔>>Blanket mortgage
The clause that allows a lender to declare the entire loan amount due immediately
because of a borrowers default is called ____________________. -
✔✔ANSWER✔✔>>Acceleration Clause
When one lender/investor closes a loan in their own name using the funds of another
lender/investor it is called ____________________. - ✔✔ANSWER✔✔>>Table Funding
Has a mortgage broker that gives a restaurant coupon for less than $50 to a real estate
agent as a thank you gift for a referral violated any law? If so, which law? -
✔✔ANSWER✔✔>>Yes, RESPA, the Real Estate Settlement Procedures Act prohibits
payment or receipt for "anything of value" for a referral.
Who insures an FHA loan? - ✔✔ANSWER✔✔>>FHA, the Federal Housing
Administration
Per the SAFE Act, if a state does not have a recovery fund it must have
______________ or __________________. - ✔✔ANSWER✔✔>>an established
minimum net worth or surety bonding requirement.
A Veteran's entitlement for a VA loan can be found on which of the following? 1. COE,
2.CRV, 3.NOV, 4.NOE - ✔✔ANSWER✔✔>>COE, Certificate of Eligibility
Which Federal Law defines a non-traditional loan? 1. HOEPA, 2. RESPA, 3. SAFE act,
4. TILA - ✔✔ANSWER✔✔>>3. SAFE Act
Section 9 of RESPA prohibits a ___________ from requiring the ________________ to
use a particular title insurance company as a condition of sale. -
✔✔ANSWER✔✔>>Seller, Buyer
Per ECOA the age of an applicant can be considered if it allows a creditor to favor
applicants _________ years and over. - ✔✔ANSWER✔✔>>62 Years
Because of the impact of the Dodd-Frank Act, an APR exceeding the _________ by
___________% is the trigger that defines a high cost loan on a first mortgage. -
✔✔ANSWER✔✔>>APOR, Average Prime Offer Rate 6.5%
,For a 90% LTV conventional loan, what percent of the down payment has to be made
from the borrower's personal cash reserves? - ✔✔ANSWER✔✔>>5%, The remaining
5% may be a gift from a family member, equity in another property traded to the seller,
or credit from rent already paid in a lease/purchase.
Which of the following are considered to be debts?
A. Car lease
B. Student Loan
C. Utility Payments
D. Insurance Payments - ✔✔ANSWER✔✔>>(A) Leases and (B) Loans are defined as
debts as they are recurring and cannot be cancelled.
Per FNMA, the process of purchasing existing properties with the intention of
immediately selling them for a profit is called ________________. -
✔✔ANSWER✔✔>>Flipping
Property purchased at a low price, appraised at a high value without a valid reason and
resold at a higher price is ___________. - ✔✔ANSWER✔✔>>Illegal flipping
Per Regulation Z and the ATR (ability to repay), in an ARM (adjustable rate mortgage)
the creditor must use the ____________payment possible. -
✔✔ANSWER✔✔>>Highest
The transfer of title to land from one person to another is called ________________. -
✔✔ANSWER✔✔>>A conveyance
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)
, 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.
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
