NMLS MLO PRACTICE TEST EXAM QUESTIONS AND ANSWERS
A Good Faith Estimate is not issued until a complete application is received from a consumer. Which
answer is NOT part of the list of information that qualifies as a received application?
a. Consumer's social security number
b. Consumer's assets
c. Address of the property
d. The mortgage loan amount sought - CORRECT ANSWER✅✅b. Consumer's assets
Which type of loan is exempt from Real Estate Settlement Procedures Act (RESPA)?
a. A loan to finance a commercial warehouse
b. A reverse mortgage
c. A home equity line of credit
d. A mortgage to purchase a single family home - CORRECT ANSWER✅✅a. A loan to finance a
commercial warehouse
The initial escrow statement includes all of the following EXCEPT
a. the amount of the monthly mortgage payment
b. the amount that is collected for homeowners association dues
c. the portion of the monthly payment going into the escrow account
d. the amount of reserves or cushion as determined by the loan servicer - CORRECT ANSWER✅✅b. the
amount that is collected for homeowners association (HOA) dues
When is an adverse action notice required?
a. when an application is withdrawn
b. when a counteroffer is extended, and the offer is accepted
c. when a counteroffer is extended, and the offer is rejected
d. when there is a change in the terms of the mortgage - CORRECT ANSWER✅✅c. when a counteroffer
is extended, and the offer is rejected (an adverse action is a negative action reported to a consumer
regarding the denial of the credit application
,Which factor can be considered when evaluation a loan application?
a. Immigration Status
b. National Origin
c. Pregnancy
d. Marital Status - CORRECT ANSWER✅✅a. Immigration Status (it can affect their ability to repay the
loan)
Which income source cannot be considered in a loan review?
a. Educational Military Benefits
b. Part-time Income
c. Alimony and Child Support
d. Annuity Income - CORRECT ANSWER✅✅a. Educational Military Benefits (benefits don't continue
after they've finished school)
What type of property does a right of recission apply to?
a. A second home
b. A nonowner-occupied duplex
c. A principal residence
d. A nonowner-occupied condominium - CORRECT ANSWER✅✅c. A Principal Residence
All of the following are an example of a finance charge EXCEPT
a. Interest
b. Points
c. A Loan Processing Fee
d. Title Insurance - CORRECT ANSWER✅✅d. Title Insurance
To avoid steering a customer to a loan product that may give higher compensation to a mortgage loan
originator, an MLO must provide multiple loan options for a borrower to review. These loan options
must include all of the following EXCEPT
a. The loan with the lowest interest rate
, b. The loan with the lowest amount of origination or discount points
c. The loan with the shortest term
d. The loan with the lowest interest rate that does not have a prepayment penalty, interest-only
payments, a negative amortization, or a balloon payment in the first 7 years of the loan - CORRECT
ANSWER✅✅c. The loan with the shortest term
All of the following are required to be covered by HOEPA EXCEPT
a. Refinances
b. Reverse mortgages
c. Closed-end Home Equity Loans
d. Purchase Money Mortgages - CORRECT ANSWER✅✅b. Reverse Mortgages
What is NOT an example of a "change of circumstance"?
a. The need for flood insurance
b. A change in the loan amount after the Good Faith Estimate has been issued
c. A disater
d. A change in the borrower's monthly income - CORRECT ANSWER✅✅d. A change in the borrower's
monthly income
Once a complete application has been received, the loan estimate must be delivered or mailed to the
borrower
a. 3 calendar days after receipt of the application
b. 3 business days after receipt of the application
c. 7 business days after receipt of the application
d. 7 calendar days after receipt of the application - CORRECT ANSWER✅✅b. 3 business days after the
receipt of the application
The Truth and Lending Act ensures all of the following EXCEPT
a. It gives guidance to a lender on whether they should grant a loan to a borrower
b. It requires all lenders to have a uniform set of disclosures
A Good Faith Estimate is not issued until a complete application is received from a consumer. Which
answer is NOT part of the list of information that qualifies as a received application?
a. Consumer's social security number
b. Consumer's assets
c. Address of the property
d. The mortgage loan amount sought - CORRECT ANSWER✅✅b. Consumer's assets
Which type of loan is exempt from Real Estate Settlement Procedures Act (RESPA)?
a. A loan to finance a commercial warehouse
b. A reverse mortgage
c. A home equity line of credit
d. A mortgage to purchase a single family home - CORRECT ANSWER✅✅a. A loan to finance a
commercial warehouse
The initial escrow statement includes all of the following EXCEPT
a. the amount of the monthly mortgage payment
b. the amount that is collected for homeowners association dues
c. the portion of the monthly payment going into the escrow account
d. the amount of reserves or cushion as determined by the loan servicer - CORRECT ANSWER✅✅b. the
amount that is collected for homeowners association (HOA) dues
When is an adverse action notice required?
a. when an application is withdrawn
b. when a counteroffer is extended, and the offer is accepted
c. when a counteroffer is extended, and the offer is rejected
d. when there is a change in the terms of the mortgage - CORRECT ANSWER✅✅c. when a counteroffer
is extended, and the offer is rejected (an adverse action is a negative action reported to a consumer
regarding the denial of the credit application
,Which factor can be considered when evaluation a loan application?
a. Immigration Status
b. National Origin
c. Pregnancy
d. Marital Status - CORRECT ANSWER✅✅a. Immigration Status (it can affect their ability to repay the
loan)
Which income source cannot be considered in a loan review?
a. Educational Military Benefits
b. Part-time Income
c. Alimony and Child Support
d. Annuity Income - CORRECT ANSWER✅✅a. Educational Military Benefits (benefits don't continue
after they've finished school)
What type of property does a right of recission apply to?
a. A second home
b. A nonowner-occupied duplex
c. A principal residence
d. A nonowner-occupied condominium - CORRECT ANSWER✅✅c. A Principal Residence
All of the following are an example of a finance charge EXCEPT
a. Interest
b. Points
c. A Loan Processing Fee
d. Title Insurance - CORRECT ANSWER✅✅d. Title Insurance
To avoid steering a customer to a loan product that may give higher compensation to a mortgage loan
originator, an MLO must provide multiple loan options for a borrower to review. These loan options
must include all of the following EXCEPT
a. The loan with the lowest interest rate
, b. The loan with the lowest amount of origination or discount points
c. The loan with the shortest term
d. The loan with the lowest interest rate that does not have a prepayment penalty, interest-only
payments, a negative amortization, or a balloon payment in the first 7 years of the loan - CORRECT
ANSWER✅✅c. The loan with the shortest term
All of the following are required to be covered by HOEPA EXCEPT
a. Refinances
b. Reverse mortgages
c. Closed-end Home Equity Loans
d. Purchase Money Mortgages - CORRECT ANSWER✅✅b. Reverse Mortgages
What is NOT an example of a "change of circumstance"?
a. The need for flood insurance
b. A change in the loan amount after the Good Faith Estimate has been issued
c. A disater
d. A change in the borrower's monthly income - CORRECT ANSWER✅✅d. A change in the borrower's
monthly income
Once a complete application has been received, the loan estimate must be delivered or mailed to the
borrower
a. 3 calendar days after receipt of the application
b. 3 business days after receipt of the application
c. 7 business days after receipt of the application
d. 7 calendar days after receipt of the application - CORRECT ANSWER✅✅b. 3 business days after the
receipt of the application
The Truth and Lending Act ensures all of the following EXCEPT
a. It gives guidance to a lender on whether they should grant a loan to a borrower
b. It requires all lenders to have a uniform set of disclosures
