Nmls Safe Mortgage Loan Originator Exam A+ Grade Assured Complete Solutions And Verified Answers

NMLS EXAM ms




Exam Solution
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SAFE MLO Test Glossary Definitions 2026 A+ GRADE A
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SSURED COMPLETE SOLUTIONS AND VERIFIED ANSWE ms ms ms ms ms




RS (32759) ms




QUESTION 1 ms




Acceleration Clause (SG Glossary Definition) ms ms ms ms




ANSWER

A portion of a lending agreement that forces the borrower to repay the entire loan loan upon the fir
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st instance of borrower default. (SG Glossary Definition)
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QUESTION 2 ms




Adjustable-rate mortgage (ARM) ms ms




ANSWER

A type of mortgage instrument in which the interest rate periodically adjusts up or down according
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to a specific index and pre-
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determined margin. ARM transactions require the creditor to provide borrowers with a special ARM
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disclosure as well as a CHARM booklet
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QUESTION 3 ms




Adjustment Period ms




ANSWER

The amount of time during which a new interest rate will be in effect for an adjustable-
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rate mortgage. New adjustments periods might occur after several months, every year or every few
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years.



QUESTION 4 ms




Administrative and Clerical Tasks ms ms ms

,ANSWER

The receipt, collection and distribution of information that is common in the processing or underwri
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ting of a loan in the mortgage business. The term is also used to describe communication that is des
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igned to obtain common information from a consumer. In general, an individual who only performs
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administrative or clerical tasks and doesn't negotiate with or give advice to borrowers doesn't need
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a loan originator license.
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QUESTION 5 ms




Adverse Action ms




ANSWER

An unfavorable credit decision rendered against a consumer made on the basis of information contai
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ned on the credit application. If a lender takes adverse action against an applicant, the lender must
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notify the applicant in writing. If the adverse action is taken as a result of information contained on
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the credit report, the notice must also provide the name, address and toll-
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free phone number of the credit bureau that supplied the information.
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QUESTION 6 ms




Affiliated Business Arrangement Disclosure (AfBA)
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ANSWER

A document that informs mortgage applicants of any service providers that may be used in the loan
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transaction that are affiliated with the lender. It must be provided to the borrower no later than the
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time the referral to the affiliated business is made and is required when there is greater than a 1%
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common ownership in the affiliated business settlement service business. If the lender requires the
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use of an affiliated provider (such as for a flood certification), then the disclosure must be given at
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application.



QUESTION 7 ms




Alt-A Loans ms




ANSWER

Loans in which the borrower represents too much risk to meet underwriting standards for a confor
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ming loan but is not risky enough to be considered "subprime"
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QUESTION 8 ms




American Association of Residential Mortgage Regulators (AARMR)
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ANSWER

, A national association of individuals who are charged with administrating and regulating various asp
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ects of residential mortgage lending. It played a major role in the formation of the NMLS-
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R and in the drafting of the model licensing law.
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QUESTION 9 ms




Annual Percentage Rate (APR)
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ANSWER

A measurement of the total cost of credit, expressed as an annual rate. The APR includes specific co
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sts of financing, both those paid at the time of closing and those paid over the term of the loan. It i
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ncludes all items that are part of the finance charge, such as interest, discount points, mortgage insu
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rance premiums and administrative fees.
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QUESTION 10 ms




Application
ANSWER

A request for a residential mortgage loan and includes the borrower-
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related information that lenders commonly use when considering the request. Someone who takes a
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n application from a consumer is generally considered to to be acting as a loan originator even whe
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n gathering application information over the phone or Internet.
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QUESTION 11 ms




ARM Disclosure ms




ANSWER

A disclosure required to be presented to the applicant within three business days of application on
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any ARM loan. This disclosure provides the applicant with the information about the specific ARM p
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roduct for which they are applying, such as a historical index value.
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QUESTION 12 ms




Assumable
ANSWER

A term used to describe a loan in which a new borrower can take over the payments of an existing
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borrower.



QUESTION 13 ms




Balloon Mortgage ms