MLO Practice Test Exam Questions and
Answers Graded A+
An Approve/Eligible determination:
1. Is an indication that a property appraised for its sales price
2. Authorization to release funds in a refinance transaction
3. An automated loan approval from the Fannie Mae Du system
4. A recommendation that is received by the Freddie Mac loan prospector
automated underwriting system. - Correct answer-3. An automated loan approval
from the Fannie Mae Du system.. this means that the borrower meets the credit
requirements and all other loan factors are acceptable. The LP recommendations
are mostly one word answers and the equivalent recommendation under LP would
be Accept.
If a lender agrees to subordinate a loan, what has occurred?
1. The borrower has a first and second and has refinanced the first.
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,2. The loan has been denied
3. The second has been paid off
4. The borrower is in foreclosure - Correct answer-1. The borrower has a first and
second and has refinanced the first...when the borrowed refinanced a first and there
is an existing second the second becomes the first when the old loan is paid off. To
avoid this from happening the second position lender will subordinate and remain
in second position.
Which of the following are you permitted to ask loan applicants under the fair
lending laws?
1. Their race
2. Their religion
3. If they plan to have additional children
4. Will they continue to work after they have children - Correct answer-1. Their
race, a HMDA requirement.
The National Credit Score Disclosure Form provides the following:
1. Statement that the credit score determines loan approval
2. Four reason codes for the credit score
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,3. A reason for the loan approval status
4. The reason for the loan denial - Correct answer-2. Four reason codes for the
credit score.
The income approach used in valuing property during an appraisal considers the
following:
1. The replacement cost of the property
2. The average meridian income levwels of the community
3. The fair market rental earnings of similar homes
4. The qualifying income potential borrowers - Correct answer-3. The fair market
rental earnings of similar homes
A mortgage broker decides to solicit business from a previous customer who
closed on a home purchase. Which action could result in a $16,000 fine?
1. Contacting the customer 17 months after the purchase transaction closed
2. Verifying that the customer is not in the no-call-registry before making a sales
call 2 years after the purchase transaction closed
3. The client is listed on the company no-call list and the loan originator calls the
customer just shy of 18 months after the purchase transaction closed.
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, 4. The customer is on the no-call-register and the loan originator calls 14 months
later - Correct answer-3. The client is listed on the company no-call list and the
loan originator calls the customer just shy of 18 months after the purchase
transaction closed. If the customer has requested not to be called then it is a
violation to call the customer.
Which of the following is not a factor in determining an interest rate?
1. Age
2. Time
3. Points
4. Margin - Correct answer-1. Age..age is a prohibited basis under ECOA and can't
be used to determine interest rates. Points are discount fees that are charged to
lower the rate, the longer the time generally higher the rate and margin is the
lenders profit built into the rate
Interest-only mortgages can be all of the following EXCEPT:
1. Can be fixed rate mortgages
2. Can be adjustable rate mortgages
3. Can be junior liens
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
Answers Graded A+
An Approve/Eligible determination:
1. Is an indication that a property appraised for its sales price
2. Authorization to release funds in a refinance transaction
3. An automated loan approval from the Fannie Mae Du system
4. A recommendation that is received by the Freddie Mac loan prospector
automated underwriting system. - Correct answer-3. An automated loan approval
from the Fannie Mae Du system.. this means that the borrower meets the credit
requirements and all other loan factors are acceptable. The LP recommendations
are mostly one word answers and the equivalent recommendation under LP would
be Accept.
If a lender agrees to subordinate a loan, what has occurred?
1. The borrower has a first and second and has refinanced the first.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,2. The loan has been denied
3. The second has been paid off
4. The borrower is in foreclosure - Correct answer-1. The borrower has a first and
second and has refinanced the first...when the borrowed refinanced a first and there
is an existing second the second becomes the first when the old loan is paid off. To
avoid this from happening the second position lender will subordinate and remain
in second position.
Which of the following are you permitted to ask loan applicants under the fair
lending laws?
1. Their race
2. Their religion
3. If they plan to have additional children
4. Will they continue to work after they have children - Correct answer-1. Their
race, a HMDA requirement.
The National Credit Score Disclosure Form provides the following:
1. Statement that the credit score determines loan approval
2. Four reason codes for the credit score
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,3. A reason for the loan approval status
4. The reason for the loan denial - Correct answer-2. Four reason codes for the
credit score.
The income approach used in valuing property during an appraisal considers the
following:
1. The replacement cost of the property
2. The average meridian income levwels of the community
3. The fair market rental earnings of similar homes
4. The qualifying income potential borrowers - Correct answer-3. The fair market
rental earnings of similar homes
A mortgage broker decides to solicit business from a previous customer who
closed on a home purchase. Which action could result in a $16,000 fine?
1. Contacting the customer 17 months after the purchase transaction closed
2. Verifying that the customer is not in the no-call-registry before making a sales
call 2 years after the purchase transaction closed
3. The client is listed on the company no-call list and the loan originator calls the
customer just shy of 18 months after the purchase transaction closed.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, 4. The customer is on the no-call-register and the loan originator calls 14 months
later - Correct answer-3. The client is listed on the company no-call list and the
loan originator calls the customer just shy of 18 months after the purchase
transaction closed. If the customer has requested not to be called then it is a
violation to call the customer.
Which of the following is not a factor in determining an interest rate?
1. Age
2. Time
3. Points
4. Margin - Correct answer-1. Age..age is a prohibited basis under ECOA and can't
be used to determine interest rates. Points are discount fees that are charged to
lower the rate, the longer the time generally higher the rate and margin is the
lenders profit built into the rate
Interest-only mortgages can be all of the following EXCEPT:
1. Can be fixed rate mortgages
2. Can be adjustable rate mortgages
3. Can be junior liens
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
