MLO TEST QUESTIONS AND ANSWERS
ALL CORRECT
A large lump-sum payment due at the end of a loan term after smaller periodic
payments. - Answer- Balloon Payment
The process of gradually paying off a loan through scheduled payments of principal and
interest. - Answer- Amortization
Ownership of a residential property, often cited as a key indicator of economic stability
and wealth building. - Answer- Homeownership
A legal agreement stating that the borrower must repay the loan or the lender may seize
the property. - Answer- Mortgage Contract
The legal foundation influencing American mortgage and property laws. - Answer-
English Common Law
The literal meaning of "mortgage," referring to a pledge that ends when the debt is paid
or the property is seized. - Answer- Dead Pledge
A mortgage-related business that does not accept customer deposits and is regulated at
the state level. - Answer- Non-Depository Institution
A federally regulated entity such as a bank or credit union subject to federal oversight. -
Answer- Covered Financial Institution
A federal law requiring MLO licensing, registration, education, and background
standards. - Answer- SAFE Mortgage Licensing Act (SAFE Act)
The requirement that an MLO be supervised by an employing company in order to
originate loans. - Answer- Sponsorship
Required education completed before obtaining an MLO license. - Answer- Pre-
Licensing Education (PE)
Annual education required to maintain an active MLO license. - Answer- Continuing
Education (CE)
The annual timeframe during which MLOs must renew their licenses through NMLS. -
Answer- License Renewal Period
ALL CORRECT
A large lump-sum payment due at the end of a loan term after smaller periodic
payments. - Answer- Balloon Payment
The process of gradually paying off a loan through scheduled payments of principal and
interest. - Answer- Amortization
Ownership of a residential property, often cited as a key indicator of economic stability
and wealth building. - Answer- Homeownership
A legal agreement stating that the borrower must repay the loan or the lender may seize
the property. - Answer- Mortgage Contract
The legal foundation influencing American mortgage and property laws. - Answer-
English Common Law
The literal meaning of "mortgage," referring to a pledge that ends when the debt is paid
or the property is seized. - Answer- Dead Pledge
A mortgage-related business that does not accept customer deposits and is regulated at
the state level. - Answer- Non-Depository Institution
A federally regulated entity such as a bank or credit union subject to federal oversight. -
Answer- Covered Financial Institution
A federal law requiring MLO licensing, registration, education, and background
standards. - Answer- SAFE Mortgage Licensing Act (SAFE Act)
The requirement that an MLO be supervised by an employing company in order to
originate loans. - Answer- Sponsorship
Required education completed before obtaining an MLO license. - Answer- Pre-
Licensing Education (PE)
Annual education required to maintain an active MLO license. - Answer- Continuing
Education (CE)
The annual timeframe during which MLOs must renew their licenses through NMLS. -
Answer- License Renewal Period
