An application must be accompanied by fingerprints when applying for
a. Licensed MLO
b. Registered MLO
c. not required
d. required for both licensed and registered MLO - ANSWER d
Quarterly mortgage call reports must be filed
a. within 30 days of the end of the calendar quarter
b. within 30 days of the end of the fiscal quarter
c. within 45 days of the end of the calendar quarter
d. within 45 days of the end of the fiscal quarter - ANSWER c. within45 days of the end
of the calendar quarter
Which of the following Government Sponsored Entities does NOT buy mortgage loans in the
secondary market?
a. Fannie Mae
b. Ginnie Mae
c. Freddie Mac
d. All of these GSEs buy loans in the secondary market - ANSWER B. Ginnie Mae does
not buy or sell loans - it guarantees principal and interest payment for investors who buy
mortgage pools
Which of the following would be ways that Fannie Mae impacts the primary mortgage mar-
ket?
a. it ultimately serves to provide additional funds for the primary market
1
,b. it influences lenders' standards for making mortgage loans
c. both
d. none - ANSWER c. Fannie Mae buys mortgages in the secondary mortgage market
which makes more funds available to lenders to make loans in the primary market. It also
sets standards for the qualifying requirements lenders use when they make loans in the pri-
mary market, since they want to be able to sell loans to Fannie Mae
A person who has failed the national portion of the NMLS examination the third attempt:
a. is prohibited from taking the test again
b. must wait one year to retake the test
c. must wait 180 days to retake the test
d. must wait 30 days to retake the test - ANSWER c 180 days
A registered LO must complete how many hours of continuing education courses each year?
a. 20
b. 12
c. 0
d. 8 - ANSWER c
In order to become a state licensed LO, the applicant must complete how many hours of pre-
license education courses
within 30 days of the end of the fiscal quarter
a. 45
b. 30
c. 25
d. 20 - ANSWER d
A lender which will make mortgage loans to customers, but will immediately sell each of
their loans to a larger lender (under a contract relationship) is called a:
2
,a. Wholesale lender
b. Retail lender
c. Correspondent lender
d. Mortgage broker - ANSWER C. Correspondent lender, since it immediately sells its
loans to a larger (often wholesale) lender
If the Fed where to buy government securities, the money supply would likely:
a. Decrease
b. Increase
c. Stabilize
d. Appreciate - ANSWER B. When the Fed buys US Government securities, the money
supply would increase, since the money would go out into the economy
The primary difference between a mortgage banker and a mortgage broker is:
a. whether it is regulated by the state or federal government
b. whether it is a depository institution
c. whether it participates in the primary or secondary mortgage market
d. whether it makes loans or only acts as intermediary - ANSWER D. Mortgage brokers
only act as intermediaries, bringing together borrowers and lenders. Mortgage bankers will
do that as well, but will also loan out their own money
If a State Licensed LO allows his or her license to expire, that person will have to retest if the
license in not renewed within:
a. 5 yrs
b. 3 yrs
c. 2 yrs
d. 1 yr - ANSWER a. 5 years
3
, Smalltown Bank makes a loan to a homebuyer and immediately after closing the loan
Smalltown Bank sells the loan to the larger Bigcity Bank. Smalltown Bank is acting as a:
a. Mortgage Banker
b. Mortgage Broker
c. Wholesale Lender
d. Correspondence Lender - ANSWER D. It made the loan to the borrower in its own
name but immediately sold it to a larger lender
Lenders which make loans only through mortgage brokers and mortgage bankers and do not
deal directly with borrowers are called:
a. Correspondent lenders
b. Wholesale lenders
c. LOs
d. Retail lenders - ANSWER B
A type of mortgage lender which raises its capital primarily through stock and other securi-
ties offerings and then makes mortgage loans to individuals would be called a:
a. Bank
b. Savings and loan association
c. Mortgage banker
d. Mortgage broker - ANSWER C. Mortgage bankers do not raise capital from deposi-
tors. They sell stock and other securities to raise funds, then make mortgage loans to cus-
tomers
Each of the following actions by the Federal Reserve Board would be likely to increase the
money supply, EXCEPT:
a. Selling U.S. Government Securities
b. Buying U.S. Government Securities
c. Lowering the discount rate
4
a. Licensed MLO
b. Registered MLO
c. not required
d. required for both licensed and registered MLO - ANSWER d
Quarterly mortgage call reports must be filed
a. within 30 days of the end of the calendar quarter
b. within 30 days of the end of the fiscal quarter
c. within 45 days of the end of the calendar quarter
d. within 45 days of the end of the fiscal quarter - ANSWER c. within45 days of the end
of the calendar quarter
Which of the following Government Sponsored Entities does NOT buy mortgage loans in the
secondary market?
a. Fannie Mae
b. Ginnie Mae
c. Freddie Mac
d. All of these GSEs buy loans in the secondary market - ANSWER B. Ginnie Mae does
not buy or sell loans - it guarantees principal and interest payment for investors who buy
mortgage pools
Which of the following would be ways that Fannie Mae impacts the primary mortgage mar-
ket?
a. it ultimately serves to provide additional funds for the primary market
1
,b. it influences lenders' standards for making mortgage loans
c. both
d. none - ANSWER c. Fannie Mae buys mortgages in the secondary mortgage market
which makes more funds available to lenders to make loans in the primary market. It also
sets standards for the qualifying requirements lenders use when they make loans in the pri-
mary market, since they want to be able to sell loans to Fannie Mae
A person who has failed the national portion of the NMLS examination the third attempt:
a. is prohibited from taking the test again
b. must wait one year to retake the test
c. must wait 180 days to retake the test
d. must wait 30 days to retake the test - ANSWER c 180 days
A registered LO must complete how many hours of continuing education courses each year?
a. 20
b. 12
c. 0
d. 8 - ANSWER c
In order to become a state licensed LO, the applicant must complete how many hours of pre-
license education courses
within 30 days of the end of the fiscal quarter
a. 45
b. 30
c. 25
d. 20 - ANSWER d
A lender which will make mortgage loans to customers, but will immediately sell each of
their loans to a larger lender (under a contract relationship) is called a:
2
,a. Wholesale lender
b. Retail lender
c. Correspondent lender
d. Mortgage broker - ANSWER C. Correspondent lender, since it immediately sells its
loans to a larger (often wholesale) lender
If the Fed where to buy government securities, the money supply would likely:
a. Decrease
b. Increase
c. Stabilize
d. Appreciate - ANSWER B. When the Fed buys US Government securities, the money
supply would increase, since the money would go out into the economy
The primary difference between a mortgage banker and a mortgage broker is:
a. whether it is regulated by the state or federal government
b. whether it is a depository institution
c. whether it participates in the primary or secondary mortgage market
d. whether it makes loans or only acts as intermediary - ANSWER D. Mortgage brokers
only act as intermediaries, bringing together borrowers and lenders. Mortgage bankers will
do that as well, but will also loan out their own money
If a State Licensed LO allows his or her license to expire, that person will have to retest if the
license in not renewed within:
a. 5 yrs
b. 3 yrs
c. 2 yrs
d. 1 yr - ANSWER a. 5 years
3
, Smalltown Bank makes a loan to a homebuyer and immediately after closing the loan
Smalltown Bank sells the loan to the larger Bigcity Bank. Smalltown Bank is acting as a:
a. Mortgage Banker
b. Mortgage Broker
c. Wholesale Lender
d. Correspondence Lender - ANSWER D. It made the loan to the borrower in its own
name but immediately sold it to a larger lender
Lenders which make loans only through mortgage brokers and mortgage bankers and do not
deal directly with borrowers are called:
a. Correspondent lenders
b. Wholesale lenders
c. LOs
d. Retail lenders - ANSWER B
A type of mortgage lender which raises its capital primarily through stock and other securi-
ties offerings and then makes mortgage loans to individuals would be called a:
a. Bank
b. Savings and loan association
c. Mortgage banker
d. Mortgage broker - ANSWER C. Mortgage bankers do not raise capital from deposi-
tors. They sell stock and other securities to raise funds, then make mortgage loans to cus-
tomers
Each of the following actions by the Federal Reserve Board would be likely to increase the
money supply, EXCEPT:
a. Selling U.S. Government Securities
b. Buying U.S. Government Securities
c. Lowering the discount rate
4
