MLO SAFE NMLS safe test prac ce ques ons 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 Se*lement Procedures Act - CORRECT ANSWERS The Federal Statute that
deals with the se*lement of residen,al mortgage loans.
RESPA's sec,on 9 Prohibits - CORRECT ANSWERS Home sellers from requiring home buyers to
purchase ,tle insurance from a par,cular company providing ,tle services.
The Dodd-Frank Act modifies ECOA to require a creditor to furnish a copy of an appraisal
developed in connec,on with a first mortgage_____________________ and absolutely not later
than ________ business days prior to closing. - CORRECT ANSWERS upon comple,on and 3
business days
TIL (Truth In Lending Disclosure) & GFE (Good Faith Es,mate) - 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 penal,es 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 compensa,on directly from a consumer, up to how
much addi,onal compensa,on may be received from a lender in the same transac,on? -
CORRECT ANSWERS $0.00, dual compensa,on is not allowed. Compensa,on must be
borrower paid or lender paid.
What kinds of reasons are necessary for a lender to take adverse ac,on with regard to a
borrower? - CORRECT ANSWERS Specific reasons.
Adverse ac,on means ______________________. - CORRECT ANSWERS A denial or revoca,on
of credit. Also, a change in the terms of an exis,ng credit arrangement or a refusal to grant
credit in substan,ally the amount or terms requested.
Per Regula,on 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%
,Regula,on 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
ins,tu,ons are serving the housing needs of their communi,es. It also iden,fies pa*erns 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 a*orney, credit repor,ng 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 (fiGeen) days.
An individual who fails the MLO wri*en exam 3 ,mes 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 Applica,on.
Any party involved in a federally covered loan that submits fraudulent informa,on 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 (fiGy dollars), 30 (thirty) days.
A seller takes back a $100,000 PMM @ 5.5% interest. This straight note will balloon aGer 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-amor,zing interest only
mortgage. The balloon would include the en,re principal plus the last month's interest, as
interest is paid in arrears.
FNMA conforming debt ra,os equal ______/________. - CORRECT ANSWERS 28%, maximum
housing expense/36% maximum total obliga,ons
HOEPA stands for ___________________________. - CORRECT ANSWERS Home Ownership
and Equity Protec,on Act.
RESPA applies to what type of proper,es? - CORRECT ANSWERS 1-4 Unit Residen,al
Proper,es
On a conven,onal 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 discrimina,on in any property
transac,on 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 Se*lement Procedures Act - CORRECT ANSWERS The Federal Statute that
deals with the se*lement of residen,al mortgage loans.
RESPA's sec,on 9 Prohibits - CORRECT ANSWERS Home sellers from requiring home buyers to
purchase ,tle insurance from a par,cular company providing ,tle services.
The Dodd-Frank Act modifies ECOA to require a creditor to furnish a copy of an appraisal
developed in connec,on with a first mortgage_____________________ and absolutely not later
than ________ business days prior to closing. - CORRECT ANSWERS upon comple,on and 3
business days
TIL (Truth In Lending Disclosure) & GFE (Good Faith Es,mate) - 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 penal,es 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 compensa,on directly from a consumer, up to how
much addi,onal compensa,on may be received from a lender in the same transac,on? -
CORRECT ANSWERS $0.00, dual compensa,on is not allowed. Compensa,on must be
borrower paid or lender paid.
What kinds of reasons are necessary for a lender to take adverse ac,on with regard to a
borrower? - CORRECT ANSWERS Specific reasons.
Adverse ac,on means ______________________. - CORRECT ANSWERS A denial or revoca,on
of credit. Also, a change in the terms of an exis,ng credit arrangement or a refusal to grant
credit in substan,ally the amount or terms requested.
Per Regula,on 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%
,Regula,on 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
ins,tu,ons are serving the housing needs of their communi,es. It also iden,fies pa*erns 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 a*orney, credit repor,ng 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 (fiGeen) days.
An individual who fails the MLO wri*en exam 3 ,mes 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 Applica,on.
Any party involved in a federally covered loan that submits fraudulent informa,on 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 (fiGy dollars), 30 (thirty) days.
A seller takes back a $100,000 PMM @ 5.5% interest. This straight note will balloon aGer 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-amor,zing interest only
mortgage. The balloon would include the en,re principal plus the last month's interest, as
interest is paid in arrears.
FNMA conforming debt ra,os equal ______/________. - CORRECT ANSWERS 28%, maximum
housing expense/36% maximum total obliga,ons
HOEPA stands for ___________________________. - CORRECT ANSWERS Home Ownership
and Equity Protec,on Act.
RESPA applies to what type of proper,es? - CORRECT ANSWERS 1-4 Unit Residen,al
Proper,es
On a conven,onal 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 discrimina,on in any property
transac,on 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.
