MLO SAFE NMLS – MORTGAGE LOAN ORIGINATOR LICENSING EXAM PREPARATION – COMPLETE
PRACTICE QUESTIONS AND ANSWERS STUDY GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
1. Taking advantage of ill-informed consumers through excessively high fees,
misrepresented loan terms, frequent refinancing that does not benefit the
borrower and other prohibited acts is called .: Predatory
Lending.
2. RESPA-Real Estate Settlement Procedures Act: The Federal Statute that deals with the
settlement of residential mortgage loans.
3. RESPA's section 9 Prohibits: Home sellers from requiring home buyers to purchase title insurance
from a particular company providing title services.
4. The Dodd-Frank Act modifies ECOA to require a creditor to furnish
a copy of an appraisal developed in connection with a first mort-
gage and absolutely not later than business days
prior to closing.: upon completion and 3 business days
5. TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate): Per the Dodd Frank
Act, a single disclosure form combines these 2 statements.
6. 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)
7. 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.
8. A loan subject to HOEPA allows prepayment penalties for the first
years of the loan.: 2 (two) years
9. 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 understand-
ing.
3. One that takes unreasonable advantage of the consumer's reasonable
reliance on the MLO.: All three would be considered abusive acts.
10. 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.
, MLO SAFE NMLS – MORTGAGE LOAN ORIGINATOR LICENSING EXAM PREPARATION – COMPLETE
PRACTICE QUESTIONS AND ANSWERS STUDY GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
11. What kinds of reasons are necessary for a lender to take adverse action
with regard to a borrower?: Specific reasons.
12. 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.
13. Per Regulation B, Lenders should retain certain records for
months.: 25 Months
14. 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 Otter Rate), 8.5%
15. Regulation C is known as .: HMDA, The Home Mortgage Disclo-
sure Act.
16. 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.
17. Under what circumstances can a lender with an Affiliated Business Arrange-
ment 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
18. If a transfer of servicing occurs, the must provide a servicing
transfer statement not less than days before the transfer occurs.: Ser-
vicer, 15 (fifteen) days.
19. An individual who fails the MLO written exam 3 times must wait
months to retake the exam.: 6 (Six) Months
20. Per RESPA, an annual escrow statement is required to .: deter-
mine shortages and surpluses in the escrow account.
21. When must the Servicing Disclosure Statement be provided to the borrow-
er?: Within 3 (three) Business Days of the Application.
22. 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
, MLO SAFE NMLS – MORTGAGE LOAN ORIGINATOR LICENSING EXAM PREPARATION – COMPLETE
PRACTICE QUESTIONS AND ANSWERS STUDY GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
23. 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.
24. 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?: $100,000
+ interest for the last month. A straight note (term mortgage) is a non-amortizing interest only mortgage. The balloon
would include the entire principal plus the last month's interest, as interest is paid in arrears.
25. FNMA conforming debt ratios equal / .: 28%, maximum housing ex-
pense/36% maximum total obligations
26. HOEPA stands for .: Home Ownership and Equity Protection Act.
27. RESPA applies to what type of properties?: 1-4 Unit Residential Properties
28. On a conventional mortgage loan, who makes the final decision regarding
approval, denial or counter offer?: The Underwriter
29. The Civil Rights Act of 1866, prohibited public and private racial discrimina-
tion in any property transaction and was expanded in 1968 in which act?: The
Civil Rights Act of 1968, also known as Title VIII of the Civil Rights Act , Also known as Title VIII, Also Known as The Fair
Housing Act
30. Of the following, which is not required to be disclosed on the TIL statement?
The (1) APR, (2) Note Rate, (3) Finance Charge, (4) Amount Financed or (5) Total
of Payments: The note rate is NOT required.
31. Which act of 1968 provides guidelines and restrictions regarding the financ-
ing, selling and renting of real property?: The Civil Rights Act of 1968. AKA, The Civil Rights Act,
AKA Title VIII, AKA The Fair Housing Act
32. Which act prohibits asking questions regarding child bearing intentions or
birth control practices?: ECOA/Regulation B, the Equal Credit Opportunity Act
33. Based on objective criteria regarding the condition and value of the proper-
ty or area, may a lender deny loans in neighborhoods where property values
are declining?: YES, loans can be denied in a geographic area, but not for discriminatory reasons relative to
the population of the area.
34. A teaser rate occurs in an ARM when the starting rate is less than the
.: Fully indexed rate.
PRACTICE QUESTIONS AND ANSWERS STUDY GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
1. Taking advantage of ill-informed consumers through excessively high fees,
misrepresented loan terms, frequent refinancing that does not benefit the
borrower and other prohibited acts is called .: Predatory
Lending.
2. RESPA-Real Estate Settlement Procedures Act: The Federal Statute that deals with the
settlement of residential mortgage loans.
3. RESPA's section 9 Prohibits: Home sellers from requiring home buyers to purchase title insurance
from a particular company providing title services.
4. The Dodd-Frank Act modifies ECOA to require a creditor to furnish
a copy of an appraisal developed in connection with a first mort-
gage and absolutely not later than business days
prior to closing.: upon completion and 3 business days
5. TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate): Per the Dodd Frank
Act, a single disclosure form combines these 2 statements.
6. 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)
7. 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.
8. A loan subject to HOEPA allows prepayment penalties for the first
years of the loan.: 2 (two) years
9. 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 understand-
ing.
3. One that takes unreasonable advantage of the consumer's reasonable
reliance on the MLO.: All three would be considered abusive acts.
10. 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.
, MLO SAFE NMLS – MORTGAGE LOAN ORIGINATOR LICENSING EXAM PREPARATION – COMPLETE
PRACTICE QUESTIONS AND ANSWERS STUDY GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
11. What kinds of reasons are necessary for a lender to take adverse action
with regard to a borrower?: Specific reasons.
12. 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.
13. Per Regulation B, Lenders should retain certain records for
months.: 25 Months
14. 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 Otter Rate), 8.5%
15. Regulation C is known as .: HMDA, The Home Mortgage Disclo-
sure Act.
16. 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.
17. Under what circumstances can a lender with an Affiliated Business Arrange-
ment 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
18. If a transfer of servicing occurs, the must provide a servicing
transfer statement not less than days before the transfer occurs.: Ser-
vicer, 15 (fifteen) days.
19. An individual who fails the MLO written exam 3 times must wait
months to retake the exam.: 6 (Six) Months
20. Per RESPA, an annual escrow statement is required to .: deter-
mine shortages and surpluses in the escrow account.
21. When must the Servicing Disclosure Statement be provided to the borrow-
er?: Within 3 (three) Business Days of the Application.
22. 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
, MLO SAFE NMLS – MORTGAGE LOAN ORIGINATOR LICENSING EXAM PREPARATION – COMPLETE
PRACTICE QUESTIONS AND ANSWERS STUDY GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
23. 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.
24. 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?: $100,000
+ interest for the last month. A straight note (term mortgage) is a non-amortizing interest only mortgage. The balloon
would include the entire principal plus the last month's interest, as interest is paid in arrears.
25. FNMA conforming debt ratios equal / .: 28%, maximum housing ex-
pense/36% maximum total obligations
26. HOEPA stands for .: Home Ownership and Equity Protection Act.
27. RESPA applies to what type of properties?: 1-4 Unit Residential Properties
28. On a conventional mortgage loan, who makes the final decision regarding
approval, denial or counter offer?: The Underwriter
29. The Civil Rights Act of 1866, prohibited public and private racial discrimina-
tion in any property transaction and was expanded in 1968 in which act?: The
Civil Rights Act of 1968, also known as Title VIII of the Civil Rights Act , Also known as Title VIII, Also Known as The Fair
Housing Act
30. Of the following, which is not required to be disclosed on the TIL statement?
The (1) APR, (2) Note Rate, (3) Finance Charge, (4) Amount Financed or (5) Total
of Payments: The note rate is NOT required.
31. Which act of 1968 provides guidelines and restrictions regarding the financ-
ing, selling and renting of real property?: The Civil Rights Act of 1968. AKA, The Civil Rights Act,
AKA Title VIII, AKA The Fair Housing Act
32. Which act prohibits asking questions regarding child bearing intentions or
birth control practices?: ECOA/Regulation B, the Equal Credit Opportunity Act
33. Based on objective criteria regarding the condition and value of the proper-
ty or area, may a lender deny loans in neighborhoods where property values
are declining?: YES, loans can be denied in a geographic area, but not for discriminatory reasons relative to
the population of the area.
34. A teaser rate occurs in an ARM when the starting rate is less than the
.: Fully indexed rate.
