Mortgage Educators California 20hr MLO Course Notes Study Set
Questions and Guide Answers
100% Verified Graded A+
1. property taxes are superior to all other taxes meaning....
Answer: they are paid first
2. Federal Reserve System (1913)
Answer: It is the central banking system of the United States. It was created in 1913 with the enactment of
the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907; This was
the first step to creating the mortgage industry lending
3. Federal Home Loan Bank Act (1932)
Answer: Gave Federal Home Loan Banks authority to lend money to thrifts, S&Ls, credit unions, savings
banks to finance home mortgages in their neighborhoods
4. Banking Act (1933)
Answer: The law that established the Federal Deposit Insurance Corporation (FDIC) to insure bank deposits.
It also prohibited commercial banks from selling insurance or acting as investment banks. Ensures deposits and
protects consumers against bank default.
,5. Department Of Housing And Urban Development (HUD) (1965)
Answer: Provides financial incentives to renovate and build within certain urban areas, improves the
nations communities and enforces fair housing laws
6. Community Reinvestment Act (CRA) (1977)
Answer: A congressional act that encourages mortgage originators to actively lend in their communities
and that requires financial institutions to evaluate the "fairness" of their lending practices. Analyzes banks success
or failure in reaching out to lending communities it serves.
7. What year did FNMA (Federal National Mortgage Association) become a GSE
(Government Sponsored Entity)?
Answer: 1968
8. Government National Mortgage Association (GNMA)
Answer: Commonly known as "Ginnie Mae," this agency of HUD operates in the secondary mortgage
market. It is involved with special government financing programs. Created in 1968
9. FNMA (Fannie Mae)
Answer: Federal National Mortgage Association, a major secondary money market player. It is privately
owned, but Federally regulated.
10. FHLMC (Federal Home Loan Mortgage Corporation)
Answer: The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac. The company
buys mortgages from lending institutions, pools them with other loans and then sells shares to investors; an
,independent stock company which creates a secondary market in conventional residential loans and in FHA and VA
loans by purchasing mortgages. Works hand in hand with FNMA
11. When did the housing bubble peak?
Answer: July 2006
12. Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) *aka
The Dodd-Frank Act*
Answer: Put in place many of the regulations we have in the mortgage industry today
13. What created the CFPB (Consumer Financial Protection Bureau)?
Answer: The Dodd-Frank Act
14. Consumer Financial Protection Bureau (CFPB)
Answer: A U.S. government agency that helps protect consumers by regulating financial products
and services, like
mortgages, credit cards, banks, credit unions and student loans. Proposes new regulations, supervises the mortgage
industry and enforces federal law to avoid another recession incident.
15. NMLS
Answer: Nationwide Mortgage Licensing System and Registry
16. Mortgage Loan Originator (MLO)
Answer: Real estate licensee who conducts mortgage loan origination activities and is required to
register annually on the Nationwide Mortgage Licensing System & Registry (NMLS). Individual who receives
, compensation or gain for taking residential mortgage loan applications or otters and negotiates terms of a
residential mortgage loan.
17. True or False The Great Recession was caused, in large part, by predatory
lending practices?
Answer: True
18. Two Types of MLO's
Answer: Licensed MLOs and Registered MLOs
19. Conference of State Bank Supervisors (CSBS)
Answer: A national organization of state bank super-visors who are charged with ensuring that state
banking institutions adhere to certain standards. The organization played a major role in the formation of the NMLS-R
and in the drafting of the model licensing law. Also helped develop the American Association Of Residential Mortgage
Regulators
20. Does the NMLS issue licenses?
Answer: NO. It is merely a database that keeps track of all services provided and information.
21. What do processors and underwriters do ?
Answer: These unlicensed positions help MLOs perform data entry to complete or start the loan process
for the client.
22. Loan Processor
Answer: One who is responsible for verifying information contained in a prospective borrower's loan file and
Questions and Guide Answers
100% Verified Graded A+
1. property taxes are superior to all other taxes meaning....
Answer: they are paid first
2. Federal Reserve System (1913)
Answer: It is the central banking system of the United States. It was created in 1913 with the enactment of
the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907; This was
the first step to creating the mortgage industry lending
3. Federal Home Loan Bank Act (1932)
Answer: Gave Federal Home Loan Banks authority to lend money to thrifts, S&Ls, credit unions, savings
banks to finance home mortgages in their neighborhoods
4. Banking Act (1933)
Answer: The law that established the Federal Deposit Insurance Corporation (FDIC) to insure bank deposits.
It also prohibited commercial banks from selling insurance or acting as investment banks. Ensures deposits and
protects consumers against bank default.
,5. Department Of Housing And Urban Development (HUD) (1965)
Answer: Provides financial incentives to renovate and build within certain urban areas, improves the
nations communities and enforces fair housing laws
6. Community Reinvestment Act (CRA) (1977)
Answer: A congressional act that encourages mortgage originators to actively lend in their communities
and that requires financial institutions to evaluate the "fairness" of their lending practices. Analyzes banks success
or failure in reaching out to lending communities it serves.
7. What year did FNMA (Federal National Mortgage Association) become a GSE
(Government Sponsored Entity)?
Answer: 1968
8. Government National Mortgage Association (GNMA)
Answer: Commonly known as "Ginnie Mae," this agency of HUD operates in the secondary mortgage
market. It is involved with special government financing programs. Created in 1968
9. FNMA (Fannie Mae)
Answer: Federal National Mortgage Association, a major secondary money market player. It is privately
owned, but Federally regulated.
10. FHLMC (Federal Home Loan Mortgage Corporation)
Answer: The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac. The company
buys mortgages from lending institutions, pools them with other loans and then sells shares to investors; an
,independent stock company which creates a secondary market in conventional residential loans and in FHA and VA
loans by purchasing mortgages. Works hand in hand with FNMA
11. When did the housing bubble peak?
Answer: July 2006
12. Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) *aka
The Dodd-Frank Act*
Answer: Put in place many of the regulations we have in the mortgage industry today
13. What created the CFPB (Consumer Financial Protection Bureau)?
Answer: The Dodd-Frank Act
14. Consumer Financial Protection Bureau (CFPB)
Answer: A U.S. government agency that helps protect consumers by regulating financial products
and services, like
mortgages, credit cards, banks, credit unions and student loans. Proposes new regulations, supervises the mortgage
industry and enforces federal law to avoid another recession incident.
15. NMLS
Answer: Nationwide Mortgage Licensing System and Registry
16. Mortgage Loan Originator (MLO)
Answer: Real estate licensee who conducts mortgage loan origination activities and is required to
register annually on the Nationwide Mortgage Licensing System & Registry (NMLS). Individual who receives
, compensation or gain for taking residential mortgage loan applications or otters and negotiates terms of a
residential mortgage loan.
17. True or False The Great Recession was caused, in large part, by predatory
lending practices?
Answer: True
18. Two Types of MLO's
Answer: Licensed MLOs and Registered MLOs
19. Conference of State Bank Supervisors (CSBS)
Answer: A national organization of state bank super-visors who are charged with ensuring that state
banking institutions adhere to certain standards. The organization played a major role in the formation of the NMLS-R
and in the drafting of the model licensing law. Also helped develop the American Association Of Residential Mortgage
Regulators
20. Does the NMLS issue licenses?
Answer: NO. It is merely a database that keeps track of all services provided and information.
21. What do processors and underwriters do ?
Answer: These unlicensed positions help MLOs perform data entry to complete or start the loan process
for the client.
22. Loan Processor
Answer: One who is responsible for verifying information contained in a prospective borrower's loan file and
