1
MLO Test Prep Questions with Answers (100% Correct
Answers)
UST— Answer: Uniform State Test
1.) Who does the CFPB protect?
2.) What does the CFPB do?— Answer: 1.) The Consumer Financial
Protection Bureau protects consumers in the financial marketplace.
2.) CFPB is now in charge of implementing and enforcing most of the
provisions of federal lending laws that relate to protecting consumers
while they are shopping for, securing, and paying off mortgages.
What is the purpose of RESPA? (3 things)— Answer: 1.) a.Protect
consumers from excessive settlement costs and unearned fees
b.Limit the amount of funds that creditors can require consumers to
deposit into escrow accounts
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c.Establish disclosures, policies, and procedures to facilitate timely
communications between loan servicers and consumers
Who is responsible for the enforcement of RESPA and for issuing
implementing regulations?— Answer: The CFPB
What are RESPA's regulations called?— Answer: Regulation X
Which 2 documents replaced RESPA's Good Faith Estimate and the
Truth-in-Lending Disclosure?— Answer: 1.) Loan Estimate
2.) Closing Disclosure
What types of mortgages does RESPA cover?— Answer: "Federally-
related mortgage loans," the requirements of RESPA apply to virtually
every home loan secured by a mortgage.
What type of loans does RESPA not pertain to?— Answer: a. Loans
for business, commercial, or agricultural purposes
b. Temporary financing
© 2025 All rights reserved
,3
c. Loans secured by vacant land
d. The sale of a loan into the secondary market
e. Loan conversions (same note - new terms)
Is compensating someone for a referral legal?— Answer: No!!!
What is "borrower credit"?— Answer: Historically referred to as "yield
spread premium" (YSP), the borrower credit is a fee paid to the
borrower by the lender when a loan is originated at a higher interest
rate than the lowest rate for which the borrower qualifies. The
borrower credit is used to subsidize closing costs, such as the
origination or broker fee, because it is financed so that out-of-pocket
closing costs are "borrowed" from the lender.
What is a markup?— Answer: A unilateral increase in the cost of a
settlement service and retention of the additional fee by the party
making the markup. The controversy over markups and their legality
© 2025 All rights reserved
, 4
is discussed in a subsequent course section. As a practice that may
easily lead to litigation, it is one that should not be used without
obtaining legal advice.
What are the 5 disclosures required by RESPA?— Answer: 1.) Loan
Estimate
2.) Closing Disclosure
3.) Settlement Cost Information Booklet
4.) Mortgage Servicing Disclosure Statement
5.) Affiliated Business Arrangement Disclosure
1.) Are creditors allowed to add their name to the cover of the Special
Information Booklet sent to borrowers?
2.) Are they allowed to translate it into other languages?
3.) Are they allowed to send it with other materials in a larger
document?
© 2025 All rights reserved
MLO Test Prep Questions with Answers (100% Correct
Answers)
UST— Answer: Uniform State Test
1.) Who does the CFPB protect?
2.) What does the CFPB do?— Answer: 1.) The Consumer Financial
Protection Bureau protects consumers in the financial marketplace.
2.) CFPB is now in charge of implementing and enforcing most of the
provisions of federal lending laws that relate to protecting consumers
while they are shopping for, securing, and paying off mortgages.
What is the purpose of RESPA? (3 things)— Answer: 1.) a.Protect
consumers from excessive settlement costs and unearned fees
b.Limit the amount of funds that creditors can require consumers to
deposit into escrow accounts
© 2025 All rights reserved
,2
c.Establish disclosures, policies, and procedures to facilitate timely
communications between loan servicers and consumers
Who is responsible for the enforcement of RESPA and for issuing
implementing regulations?— Answer: The CFPB
What are RESPA's regulations called?— Answer: Regulation X
Which 2 documents replaced RESPA's Good Faith Estimate and the
Truth-in-Lending Disclosure?— Answer: 1.) Loan Estimate
2.) Closing Disclosure
What types of mortgages does RESPA cover?— Answer: "Federally-
related mortgage loans," the requirements of RESPA apply to virtually
every home loan secured by a mortgage.
What type of loans does RESPA not pertain to?— Answer: a. Loans
for business, commercial, or agricultural purposes
b. Temporary financing
© 2025 All rights reserved
,3
c. Loans secured by vacant land
d. The sale of a loan into the secondary market
e. Loan conversions (same note - new terms)
Is compensating someone for a referral legal?— Answer: No!!!
What is "borrower credit"?— Answer: Historically referred to as "yield
spread premium" (YSP), the borrower credit is a fee paid to the
borrower by the lender when a loan is originated at a higher interest
rate than the lowest rate for which the borrower qualifies. The
borrower credit is used to subsidize closing costs, such as the
origination or broker fee, because it is financed so that out-of-pocket
closing costs are "borrowed" from the lender.
What is a markup?— Answer: A unilateral increase in the cost of a
settlement service and retention of the additional fee by the party
making the markup. The controversy over markups and their legality
© 2025 All rights reserved
, 4
is discussed in a subsequent course section. As a practice that may
easily lead to litigation, it is one that should not be used without
obtaining legal advice.
What are the 5 disclosures required by RESPA?— Answer: 1.) Loan
Estimate
2.) Closing Disclosure
3.) Settlement Cost Information Booklet
4.) Mortgage Servicing Disclosure Statement
5.) Affiliated Business Arrangement Disclosure
1.) Are creditors allowed to add their name to the cover of the Special
Information Booklet sent to borrowers?
2.) Are they allowed to translate it into other languages?
3.) Are they allowed to send it with other materials in a larger
document?
© 2025 All rights reserved
