MLO SAFE NMLS safe test 2026
Questions and Answers
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
Answer -Predatory Lending.
RESPA-Real Estate Settlement Procedures Act - Correct Answer -The Federal
Statute that deals with the settlement of residential mortgage loans.
RESPA's section 9 Prohibits - Correct 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. - Correct
Answer -upon completion and 3 business days
©COPYRIGHT 2025 ALL RIGHTS RESERVED 1
,TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) - Correct 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. - Correct 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? - Correct Answer -All loans, whether owner
occupied or not.
A loan subject to HOEPA allows prepayment penalties for the first ______ years of
the loan. - Correct 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. - Correct Answer -All three would be considered abusive acts.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 2
,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 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? - Correct Answer -Specific reasons.
Adverse action means ______________________. - Correct 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. - Correct 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. - Correct Answer -APOR ( Average Prime Offer Rate), 8.5%
Regulation C is known as ________________________. - Correct Answer -
HMDA, The Home Mortgage Disclosure Act.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 3
, What is the purpose of HMDA? - Correct 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? - Correct 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
If a transfer of servicing occurs, the _______________ must provide a servicing
transfer statement not less than ________ days before the transfer occurs. - Correct
Answer -Servicer, 15 (fifteen) days.
An individual who fails the MLO written exam 3 times must wait _________
months to retake the exam. - Correct Answer -6 (Six) Months
Per RESPA, an annual escrow statement is required to ______________. - Correct
Answer -determine shortages and surpluses in the escrow account.
When must the Servicing Disclosure Statement be provided to the borrower? -
Correct Answer -Within 3 (three) Business Days of the Application.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 4
Questions and Answers
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
Answer -Predatory Lending.
RESPA-Real Estate Settlement Procedures Act - Correct Answer -The Federal
Statute that deals with the settlement of residential mortgage loans.
RESPA's section 9 Prohibits - Correct 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. - Correct
Answer -upon completion and 3 business days
©COPYRIGHT 2025 ALL RIGHTS RESERVED 1
,TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) - Correct 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. - Correct 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? - Correct Answer -All loans, whether owner
occupied or not.
A loan subject to HOEPA allows prepayment penalties for the first ______ years of
the loan. - Correct 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. - Correct Answer -All three would be considered abusive acts.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 2
,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 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? - Correct Answer -Specific reasons.
Adverse action means ______________________. - Correct 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. - Correct 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. - Correct Answer -APOR ( Average Prime Offer Rate), 8.5%
Regulation C is known as ________________________. - Correct Answer -
HMDA, The Home Mortgage Disclosure Act.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 3
, What is the purpose of HMDA? - Correct 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? - Correct 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
If a transfer of servicing occurs, the _______________ must provide a servicing
transfer statement not less than ________ days before the transfer occurs. - Correct
Answer -Servicer, 15 (fifteen) days.
An individual who fails the MLO written exam 3 times must wait _________
months to retake the exam. - Correct Answer -6 (Six) Months
Per RESPA, an annual escrow statement is required to ______________. - Correct
Answer -determine shortages and surpluses in the escrow account.
When must the Servicing Disclosure Statement be provided to the borrower? -
Correct Answer -Within 3 (three) Business Days of the Application.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 4
