MLO SAFE NMLS TEST PAPERS ANSWERS AND
QUESTIONS SET A+
✔✔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.
✔✔FNMA conforming debt ratios equal ______/________. - ✔✔28%, maximum
housing expense/36% maximum total obligations
✔✔HOEPA stands for ___________________________. - ✔✔Home Ownership and
Equity Protection Act.
✔✔RESPA applies to what type of properties? - ✔✔1-4 Unit Residential Properties
✔✔On a conventional mortgage loan, who makes the final decision regarding approval,
denial or counter offer? - ✔✔The Underwriter
✔✔The Civil Rights Act of 1866, prohibited public and private racial discrimination 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
✔✔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.
✔✔Which act of 1968 provides guidelines and restrictions regarding the financing,
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
,✔✔Which act prohibits asking questions regarding child bearing intentions or birth
control practices? - ✔✔ECOA/Regulation B, the Equal Credit Opportunity Act
✔✔Based on objective criteria regarding the condition and value of the property 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.
✔✔A teaser rate occurs in an ARM when the starting rate is less than the
_____________. - ✔✔Fully indexed rate.
✔✔Per ECOA, is it true that while a lender must consider reliable alimony, child support
or separate maintenance payments as income, the applicant is not required to disclose
such income? - ✔✔Yes, it is true. Only income intended to be used for qualifying has to
be disclosed and verified.
✔✔Of the following, who make a flood zone determination?
1. The Lender
2. The Appraiser
3. The Surveyor
4. The Underwriter - ✔✔2. The Appraiser makes the flood zone determination.
✔✔Force-placed insurance protects the _________________.
a. Lender
b. borrower
c. both - ✔✔a. lender
✔✔FHA requires mortgage insurance on all loans for a period of ______________
years. - ✔✔5 (five) years.
✔✔A property sells for $300,000 and requires a 20% down payment. The origination fee
will be two points. How much is the origination fee? - ✔✔$4,800, $300,000 X 20% =
$60,000 down payment
$300,000 X 80% LTV = $240,000,
$240,000 X 2% = $4,800
✔✔HOEPA prohibits ____________________ amortization. - ✔✔Negative. Increasing
the principal balance, usually because of not paying sufficient interest which then is
added to the principal balance of the loa.
✔✔How often does the external Do Not Call list get updated? - ✔✔Every 3 months or
90 days.
, ✔✔What does VA stand for? - ✔✔The Department of Veteran's Affairs
✔✔The three functions of a direct endorser include ______________ ,
__________________ and ________________. - ✔✔Originate, underwrite and close
loans.
✔✔What is the down payment requirement on a VA guaranteed loan? - ✔✔0, Zero.
There is no down payment required.
✔✔The APR is also know at the _____________ rate. - ✔✔Effective rate.
✔✔The term of a loan effects the APR. The longer the term the ______________ the
APR. - ✔✔Lower.
✔✔Business days exclude ________________ and _________________. -
✔✔Sundays and Federal Holidays.
✔✔Per the TILA the three business days Right of Rescission applies to the
_____________________ of a ______________________ dwelling. - ✔✔The refinance
of a primary residence.
✔✔GLBA stand for the ________________. - ✔✔GRAMM-LEACH-BLILEY ACT
✔✔A "qualified" mortgage is one with points and fees not exceeding
______________% of the loan amount, do not have terms that exceed
__________________ year and do not result in _________________ amortization. -
✔✔3%, 30 years and negative amortization
✔✔On qualified mortgages, prepayment penalties are prohibited except for some
_____________ loans. - ✔✔Fixed rate
✔✔With regard to a credit score, the Dodd-Frank Act amended the FCRA to require
creditors to provide the score to a consumer at $ ______________ cost. - ✔✔$0, no
charge
✔✔From a banks perspective, the term that describes depositors withdrawing their
funds is _______________________. - ✔✔Disintermediation
✔✔What is a 360/180 loan? - ✔✔This loan would require payments as if amortized over
30 years but will become due or balloon in 15 years.
QUESTIONS SET A+
✔✔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.
✔✔FNMA conforming debt ratios equal ______/________. - ✔✔28%, maximum
housing expense/36% maximum total obligations
✔✔HOEPA stands for ___________________________. - ✔✔Home Ownership and
Equity Protection Act.
✔✔RESPA applies to what type of properties? - ✔✔1-4 Unit Residential Properties
✔✔On a conventional mortgage loan, who makes the final decision regarding approval,
denial or counter offer? - ✔✔The Underwriter
✔✔The Civil Rights Act of 1866, prohibited public and private racial discrimination 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
✔✔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.
✔✔Which act of 1968 provides guidelines and restrictions regarding the financing,
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
,✔✔Which act prohibits asking questions regarding child bearing intentions or birth
control practices? - ✔✔ECOA/Regulation B, the Equal Credit Opportunity Act
✔✔Based on objective criteria regarding the condition and value of the property 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.
✔✔A teaser rate occurs in an ARM when the starting rate is less than the
_____________. - ✔✔Fully indexed rate.
✔✔Per ECOA, is it true that while a lender must consider reliable alimony, child support
or separate maintenance payments as income, the applicant is not required to disclose
such income? - ✔✔Yes, it is true. Only income intended to be used for qualifying has to
be disclosed and verified.
✔✔Of the following, who make a flood zone determination?
1. The Lender
2. The Appraiser
3. The Surveyor
4. The Underwriter - ✔✔2. The Appraiser makes the flood zone determination.
✔✔Force-placed insurance protects the _________________.
a. Lender
b. borrower
c. both - ✔✔a. lender
✔✔FHA requires mortgage insurance on all loans for a period of ______________
years. - ✔✔5 (five) years.
✔✔A property sells for $300,000 and requires a 20% down payment. The origination fee
will be two points. How much is the origination fee? - ✔✔$4,800, $300,000 X 20% =
$60,000 down payment
$300,000 X 80% LTV = $240,000,
$240,000 X 2% = $4,800
✔✔HOEPA prohibits ____________________ amortization. - ✔✔Negative. Increasing
the principal balance, usually because of not paying sufficient interest which then is
added to the principal balance of the loa.
✔✔How often does the external Do Not Call list get updated? - ✔✔Every 3 months or
90 days.
, ✔✔What does VA stand for? - ✔✔The Department of Veteran's Affairs
✔✔The three functions of a direct endorser include ______________ ,
__________________ and ________________. - ✔✔Originate, underwrite and close
loans.
✔✔What is the down payment requirement on a VA guaranteed loan? - ✔✔0, Zero.
There is no down payment required.
✔✔The APR is also know at the _____________ rate. - ✔✔Effective rate.
✔✔The term of a loan effects the APR. The longer the term the ______________ the
APR. - ✔✔Lower.
✔✔Business days exclude ________________ and _________________. -
✔✔Sundays and Federal Holidays.
✔✔Per the TILA the three business days Right of Rescission applies to the
_____________________ of a ______________________ dwelling. - ✔✔The refinance
of a primary residence.
✔✔GLBA stand for the ________________. - ✔✔GRAMM-LEACH-BLILEY ACT
✔✔A "qualified" mortgage is one with points and fees not exceeding
______________% of the loan amount, do not have terms that exceed
__________________ year and do not result in _________________ amortization. -
✔✔3%, 30 years and negative amortization
✔✔On qualified mortgages, prepayment penalties are prohibited except for some
_____________ loans. - ✔✔Fixed rate
✔✔With regard to a credit score, the Dodd-Frank Act amended the FCRA to require
creditors to provide the score to a consumer at $ ______________ cost. - ✔✔$0, no
charge
✔✔From a banks perspective, the term that describes depositors withdrawing their
funds is _______________________. - ✔✔Disintermediation
✔✔What is a 360/180 loan? - ✔✔This loan would require payments as if amortized over
30 years but will become due or balloon in 15 years.
