MLO SAFE NMLS SAFE TEST 2026-2027
QUESTIONS AND ANSWERS GRADED A+
Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and fees may
not exceed ________% of the total loan amount.
3% (three percent)
Per a provision of the Dodd-Frank Act mortgage lenders are to determine that a
borrower has a reasonable ability to repay a loan. Does this provision apply to all
loans or just owner occupied loans?
All loans, whether owner occupied or not.
A loan subject to HOEPA allows prepayment penalties for the first ______ years
of the loan.
2 (two) years
Per the Dodd-Frank Act an abusive act would include which of the following:
1. One that materially interferes with the consumers ability to understand the
product or service.
2. One that take unreasonable advantage of a consumers' lack of understanding.
3. One that takes unreasonable advantage of the consumer's reasonable reliance on
the MLO.
,All three would be considered abusive acts.
Per the Dodd-Frank Act if an MLO receives compensation directly from a
consumer, up to how much additional compensation may be received from a lender
in the same transaction?
$0.00, dual compensation is not allowed. Compensation must be borrower paid or
lender paid.
What kinds of reasons are necessary for a lender to take adverse action with regard
to a borrower?
Specific reasons.
Adverse action means ______________________.
A denial or revocation of credit. Also, a change in the terms of an existing credit
arrangement or a refusal to grant credit in substantially the amount or terms
requested.
Per Regulation B, Lenders should retain certain records for _____________
months.
25 Months
,Because of the impact of the Dodd-Frank Act on a second mortgage, an APR that
exceeds the ________ by more than _____% is the trigger that defines a high cost
loan.
APOR ( Average Prime Offer Rate), 8.5%
Regulation C is known as ________________________.
HMDA, The Home Mortgage Disclosure Act.
What is the purpose of HMDA?
The HMDA determines whether financial institutions are serving the housing
needs of their communities. It also identifies patterns of discriminatory lending.
Under what circumstances can a lender with an Affiliated Business Arrangement
require a borrower to use a specific third party service provider?
If there are no kickback or referral fees and the service provider is an attorney,
credit reporting agency or appraiser the lender can require that the borrower uses
the provider
If a transfer of servicing occurs, the _______________ must provide a servicing
transfer statement not less than ________ days before the transfer occurs.
Servicer, 15 (fifteen) days.
, An individual who fails the MLO written exam 3 times must wait _________
months to retake the exam.
6 (Six) Months
Per RESPA, an annual escrow statement is required to ______________.
determine shortages and surpluses in the escrow account.
When must the Servicing Disclosure Statement be provided to the borrower?
Within 3 (three) Business Days of the Application.
Any party involved in a federally covered loan that submits fraudulent information
is subject to a fine of up to $___________ and up to __________years in prison.
$1,000,000 (one million dollars), 30 years in prison
Per RESPA, an escrow cushion is limited to a maximum of _________ of the
annual payments and surpluses over $_____must be refunded within ________
days.
1/6th (2 months), $50 (fifty dollars), 30 (thirty) days.
A seller takes back a $100,000 PMM @ 5.5% interest. This straight note will
balloon after 10 years of payments. How much is the balloon payment?
QUESTIONS AND ANSWERS GRADED A+
Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and fees may
not exceed ________% of the total loan amount.
3% (three percent)
Per a provision of the Dodd-Frank Act mortgage lenders are to determine that a
borrower has a reasonable ability to repay a loan. Does this provision apply to all
loans or just owner occupied loans?
All loans, whether owner occupied or not.
A loan subject to HOEPA allows prepayment penalties for the first ______ years
of the loan.
2 (two) years
Per the Dodd-Frank Act an abusive act would include which of the following:
1. One that materially interferes with the consumers ability to understand the
product or service.
2. One that take unreasonable advantage of a consumers' lack of understanding.
3. One that takes unreasonable advantage of the consumer's reasonable reliance on
the MLO.
,All three would be considered abusive acts.
Per the Dodd-Frank Act if an MLO receives compensation directly from a
consumer, up to how much additional compensation may be received from a lender
in the same transaction?
$0.00, dual compensation is not allowed. Compensation must be borrower paid or
lender paid.
What kinds of reasons are necessary for a lender to take adverse action with regard
to a borrower?
Specific reasons.
Adverse action means ______________________.
A denial or revocation of credit. Also, a change in the terms of an existing credit
arrangement or a refusal to grant credit in substantially the amount or terms
requested.
Per Regulation B, Lenders should retain certain records for _____________
months.
25 Months
,Because of the impact of the Dodd-Frank Act on a second mortgage, an APR that
exceeds the ________ by more than _____% is the trigger that defines a high cost
loan.
APOR ( Average Prime Offer Rate), 8.5%
Regulation C is known as ________________________.
HMDA, The Home Mortgage Disclosure Act.
What is the purpose of HMDA?
The HMDA determines whether financial institutions are serving the housing
needs of their communities. It also identifies patterns of discriminatory lending.
Under what circumstances can a lender with an Affiliated Business Arrangement
require a borrower to use a specific third party service provider?
If there are no kickback or referral fees and the service provider is an attorney,
credit reporting agency or appraiser the lender can require that the borrower uses
the provider
If a transfer of servicing occurs, the _______________ must provide a servicing
transfer statement not less than ________ days before the transfer occurs.
Servicer, 15 (fifteen) days.
, An individual who fails the MLO written exam 3 times must wait _________
months to retake the exam.
6 (Six) Months
Per RESPA, an annual escrow statement is required to ______________.
determine shortages and surpluses in the escrow account.
When must the Servicing Disclosure Statement be provided to the borrower?
Within 3 (three) Business Days of the Application.
Any party involved in a federally covered loan that submits fraudulent information
is subject to a fine of up to $___________ and up to __________years in prison.
$1,000,000 (one million dollars), 30 years in prison
Per RESPA, an escrow cushion is limited to a maximum of _________ of the
annual payments and surpluses over $_____must be refunded within ________
days.
1/6th (2 months), $50 (fifty dollars), 30 (thirty) days.
A seller takes back a $100,000 PMM @ 5.5% interest. This straight note will
balloon after 10 years of payments. How much is the balloon payment?
