NMLS MLO Exam Questions and Answers With Verified Solutions 2025
What must a borrower do to avoid having late payments reported to a credit bureau? - ✔✔Pay within
30 days of due date
Max penalty if a borrower is required to use a specific title company or settlement agent? - ✔✔3 times
the fee
What should not be over-weighted in an analysis of borrower repayment capacity? - ✔✔Credit scores
Max prepayment penalty on residential mortgages in the first year of the loan - ✔✔3%
What must condominium associations do with respect to property insurance? - ✔✔Keep a "blanket"
policy that protects the entire structure
If a lender is planning on referring a borrower to a title company that the lender has ownership in, when
must the AFBA must be provided to the borrower? - ✔✔Before the referral to the title company is made
Website to obtain copy of your credit report that the credit bureaus are required to provide once per
year at no charge - ✔✔annualcreditreport.com
2/3/6 caps - ✔✔ARM initial adjustment max is 2%, subsequent adjustment period max is 3%, and
lifetime cap of 6%
What does FHLB stand for and what do they provide? - ✔✔Federal Home Loan Bank, and they provide
advances to financial institutions for residential mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan that does
not meet QRM guidelines? - ✔✔5%
,On a purchase transaction, what document contains the purchase price for a property? - ✔✔Sales
Contract
After a loan has been closed and funded, the creditor notices a tolerance violation with a fee between
the LE and CD. How long does the creditor have to reimburse the borrower for the overcharge before
being considered in violation of the TRID rule? - ✔✔60 days after closing
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan that does
not meet QRM guidelines? - ✔✔5%
Overt Discrimination - ✔✔Refusing service to anyone of a certain race, ethnicity, etc.
Under ECOA can you ask how many children a borrower has? - ✔✔No
What document specifies that a property is being used as security in the event of nonpayment of a
debt? - ✔✔Mortgage
On the LE, which piece of data tells applicants how much they will be paying in interest over the life of
the loan as a percentage of the loan? - ✔✔TIP (Total Interest Percentage)
COFI comes from what region in the country? - ✔✔The 11th Federal Home Loan Bank (Arizona,
California, and Nevada)
What disclosure is required to be provided to the applicant within 3 days of application under reg x? -
✔✔Mortgage Loan Servicing Disclosure
Verification of cash used in a closing is documented by: - ✔✔last 2-3 months bank statements
The finance charge is the total cost of: - ✔✔the loan in dollars, including points and mortgage insurance
What IRS forms would you requrest from a borrower who is 40% shareholder in a C-Corporation? -
✔✔Form 1120
, Impersonating someone else in an attempt to obtain their personal financial information is called: -
✔✔Pretexting
What type of funding occurs when a lender obtains funds from a line of credit at a commercial bank? -
✔✔Warehouse funding
Late fee for FHA and VA loans - ✔✔4%
Ginnie Mae _____ loans - ✔✔Guarantees
A mortgage on personal property is: - ✔✔Chattel mortgage
Who can transfer title insurance policy? - ✔✔Mortgagee
What document is NOT recorded? - ✔✔The Note
The borrower's IOU is: - ✔✔The Note
Escheat - ✔✔When a property owner dies without a will and the state is unable to locate any heirs, so
the state claims the property.
Disintermediation - ✔✔The withdrawal of funds out of savings accounts and into stocks and bonds
Eminent Domain - ✔✔The condemnation of private property for public good
Warranty Deed - ✔✔The document conveying title from one party to another and guaranteeing that the
title is good
Another name for an installment contract - ✔✔Contract for Deed
What must a borrower do to avoid having late payments reported to a credit bureau? - ✔✔Pay within
30 days of due date
Max penalty if a borrower is required to use a specific title company or settlement agent? - ✔✔3 times
the fee
What should not be over-weighted in an analysis of borrower repayment capacity? - ✔✔Credit scores
Max prepayment penalty on residential mortgages in the first year of the loan - ✔✔3%
What must condominium associations do with respect to property insurance? - ✔✔Keep a "blanket"
policy that protects the entire structure
If a lender is planning on referring a borrower to a title company that the lender has ownership in, when
must the AFBA must be provided to the borrower? - ✔✔Before the referral to the title company is made
Website to obtain copy of your credit report that the credit bureaus are required to provide once per
year at no charge - ✔✔annualcreditreport.com
2/3/6 caps - ✔✔ARM initial adjustment max is 2%, subsequent adjustment period max is 3%, and
lifetime cap of 6%
What does FHLB stand for and what do they provide? - ✔✔Federal Home Loan Bank, and they provide
advances to financial institutions for residential mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan that does
not meet QRM guidelines? - ✔✔5%
,On a purchase transaction, what document contains the purchase price for a property? - ✔✔Sales
Contract
After a loan has been closed and funded, the creditor notices a tolerance violation with a fee between
the LE and CD. How long does the creditor have to reimburse the borrower for the overcharge before
being considered in violation of the TRID rule? - ✔✔60 days after closing
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan that does
not meet QRM guidelines? - ✔✔5%
Overt Discrimination - ✔✔Refusing service to anyone of a certain race, ethnicity, etc.
Under ECOA can you ask how many children a borrower has? - ✔✔No
What document specifies that a property is being used as security in the event of nonpayment of a
debt? - ✔✔Mortgage
On the LE, which piece of data tells applicants how much they will be paying in interest over the life of
the loan as a percentage of the loan? - ✔✔TIP (Total Interest Percentage)
COFI comes from what region in the country? - ✔✔The 11th Federal Home Loan Bank (Arizona,
California, and Nevada)
What disclosure is required to be provided to the applicant within 3 days of application under reg x? -
✔✔Mortgage Loan Servicing Disclosure
Verification of cash used in a closing is documented by: - ✔✔last 2-3 months bank statements
The finance charge is the total cost of: - ✔✔the loan in dollars, including points and mortgage insurance
What IRS forms would you requrest from a borrower who is 40% shareholder in a C-Corporation? -
✔✔Form 1120
, Impersonating someone else in an attempt to obtain their personal financial information is called: -
✔✔Pretexting
What type of funding occurs when a lender obtains funds from a line of credit at a commercial bank? -
✔✔Warehouse funding
Late fee for FHA and VA loans - ✔✔4%
Ginnie Mae _____ loans - ✔✔Guarantees
A mortgage on personal property is: - ✔✔Chattel mortgage
Who can transfer title insurance policy? - ✔✔Mortgagee
What document is NOT recorded? - ✔✔The Note
The borrower's IOU is: - ✔✔The Note
Escheat - ✔✔When a property owner dies without a will and the state is unable to locate any heirs, so
the state claims the property.
Disintermediation - ✔✔The withdrawal of funds out of savings accounts and into stocks and bonds
Eminent Domain - ✔✔The condemnation of private property for public good
Warranty Deed - ✔✔The document conveying title from one party to another and guaranteeing that the
title is good
Another name for an installment contract - ✔✔Contract for Deed
