MLO SAFE NMLS CORE REVIEWS ANSWERS AND
QUESTIONS SET A+
✔✔The income that a Rural Development Loan considers is the
___________________________. - ✔✔AMI, the area median income
✔✔Whether intentional or negligent, the misrepresentation or concealment of materials
facts is unethical and considered to be _______________________________. -
✔✔Fraud
✔✔Under Regulation Z, regarding a principal residence, how long is the rescission
period for a (1) refinance , a (2) HELOC and a (3) purchase? - ✔✔1. 3 business days 2.
3 business days. 3. 0-None for a purchase
✔✔After an annual escrow analysis a lender discovers that a borrower, delinquent with
payments, has an excess of $450 in his escrow account. Must the excess be returned
to the borrower? When? - ✔✔No, if the borrower is delinquent with payments, the
lender is not required to return any excess escrow.
✔✔FACTA modifies FCRA regarding ________________ __________________. -
✔✔FACTA requires the disclosure of the credit score.
✔✔Regarding the GLBA and the Do-Not-Call registry, violations are
$_______________________ per incident. - ✔✔$16,000
✔✔The required down payment on an FHA loan is __________% of the lesser of the
sales price of the property or appraised value. - ✔✔3.5%
✔✔The Truth in Lending Act (TILA) is implemented by regulation
____________________. - ✔✔Regulation Z
,✔✔There is an extended right of rescission period of ___________ years if the
borrower is not properly notified of his/her right to rescind. - ✔✔Three years
✔✔Enticing a buyer with one loan product and then selling or supplying another is
called _____________________________. - ✔✔Bait and Switch
✔✔RESPA disclosures apply to _______________________ Real Estate collateralized
loans on _____ to _________ unit properties. - ✔✔all residential properties, 1-4 units.
✔✔The conservator of FNMA and FHLMC is ____________________. - ✔✔The FHFA,
Federal Housing Finance Agency
✔✔Does the Fair Housing Act provide protection if a single family home is sold or
rented by a private owner without the use of a broker? - ✔✔No, there is no protection by
virtue of the fair housing act if there is no broker.
✔✔Per FNMA a borrower who owns _____________ of the business that's paying
him/her is considered self employed. - ✔✔25%
✔✔Under what circumstances may a mortgage broker ask questions regarding a former
spouse who is a non-applicant? - ✔✔When the applicant is including child support from
the former spouses income.
✔✔Lenders can collect in escrow a _______________cushion for advance tax
payments and insurance premiums. - ✔✔Two Months Escrow, 1/6th of a twelve month
year.
✔✔If a Mortgage Broker violates provision of the GLB Act, the CFPB may bring action
and impose penalties against the Broker up to $__________________. - ✔✔$10,000
✔✔Per the Dodd-Frank Act, the borrower's ability to repay a loan does not apply to 4
types of financing. The 4 exceptions include _____________, _____________,
_____________ and __________. - ✔✔Open End credit loans, timeshare plans,
reverse mortgage and a temporary loan.
✔✔Which Federal Law allows the borrower to challenge the value stated on an
appraisal? - ✔✔ECOA
✔✔Per the Federal Fair Housing Act, the phrase that must be included in a broadcast
advertisement is _________________________. - ✔✔Equal Housing Lender
✔✔Per RESPA, a loan application must include ____________________.
a. a property address
, b. an estimate of value
c. Both a and b
d. Neither a or b - ✔✔b. Both A and B
✔✔While generally prohibited, a higher priced loan can include prepayment penalties
for up to __________ years. - ✔✔2 Years
✔✔A borrower earns $10,000 per month and has installment debt and revolving charge
payments of $1,400 per month. Per FHA guidelines this borrowers maximum allowable
housing expense is _______________. - ✔✔$2,900. $10,000 X 43% = $4,300 - $1,400
= $2,900
FHA ratios 31/43
Use the lesser of the front/back end
Front=$10,000 X 31%=$3,100
✔✔The amount of money that the VA will guarantee is called the
_______________________. - ✔✔Entitlement
✔✔Sheryl and Marty jointly own their primary residence which they are refinancing.
Marty is given the only copy of the notice of the right to rescind. How long do they have
to rescind the transaction? - ✔✔3 Years. All co-owners should receive a rescission
notice. Per TILA (the truth in lending act) the rescission period is expanded to three
years if there has not been complete or proper disclosure of the right to rescind.
✔✔Per the Federal Fair Housing Act what must be displayed in every branch where
mortgage loans are made? - ✔✔The "Equal Housing Opportunity" poster.
✔✔Who are the three largest lenders/investors in the secondary market? - ✔✔FNMA,
GNMA, and FHLMC. Fannie Mae, Ginnie Mae and Freddie Mac
✔✔The Real Estate Settlement Procedures Act (RESPA) is also known as Regulation
_______________. - ✔✔Regulation X
✔✔The ________________ is the purchase price of the property plus the allowable
buyer paid closing costs. - ✔✔Acquisition Cost
✔✔Per Reg Z in 2014, a loan is considered higher priced if the APR exceeds the APOR
by ___________% for a 1st mortgage, ___________% for a jumbo 1st lien or
________% for a subordinate lien. - ✔✔5%, 5%, 5%, all five percent.
✔✔Money paid by a lender to a Mortgage Broker for adding value to the loan is called
__________________. - ✔✔YSP, Yield Spread Premium
QUESTIONS SET A+
✔✔The income that a Rural Development Loan considers is the
___________________________. - ✔✔AMI, the area median income
✔✔Whether intentional or negligent, the misrepresentation or concealment of materials
facts is unethical and considered to be _______________________________. -
✔✔Fraud
✔✔Under Regulation Z, regarding a principal residence, how long is the rescission
period for a (1) refinance , a (2) HELOC and a (3) purchase? - ✔✔1. 3 business days 2.
3 business days. 3. 0-None for a purchase
✔✔After an annual escrow analysis a lender discovers that a borrower, delinquent with
payments, has an excess of $450 in his escrow account. Must the excess be returned
to the borrower? When? - ✔✔No, if the borrower is delinquent with payments, the
lender is not required to return any excess escrow.
✔✔FACTA modifies FCRA regarding ________________ __________________. -
✔✔FACTA requires the disclosure of the credit score.
✔✔Regarding the GLBA and the Do-Not-Call registry, violations are
$_______________________ per incident. - ✔✔$16,000
✔✔The required down payment on an FHA loan is __________% of the lesser of the
sales price of the property or appraised value. - ✔✔3.5%
✔✔The Truth in Lending Act (TILA) is implemented by regulation
____________________. - ✔✔Regulation Z
,✔✔There is an extended right of rescission period of ___________ years if the
borrower is not properly notified of his/her right to rescind. - ✔✔Three years
✔✔Enticing a buyer with one loan product and then selling or supplying another is
called _____________________________. - ✔✔Bait and Switch
✔✔RESPA disclosures apply to _______________________ Real Estate collateralized
loans on _____ to _________ unit properties. - ✔✔all residential properties, 1-4 units.
✔✔The conservator of FNMA and FHLMC is ____________________. - ✔✔The FHFA,
Federal Housing Finance Agency
✔✔Does the Fair Housing Act provide protection if a single family home is sold or
rented by a private owner without the use of a broker? - ✔✔No, there is no protection by
virtue of the fair housing act if there is no broker.
✔✔Per FNMA a borrower who owns _____________ of the business that's paying
him/her is considered self employed. - ✔✔25%
✔✔Under what circumstances may a mortgage broker ask questions regarding a former
spouse who is a non-applicant? - ✔✔When the applicant is including child support from
the former spouses income.
✔✔Lenders can collect in escrow a _______________cushion for advance tax
payments and insurance premiums. - ✔✔Two Months Escrow, 1/6th of a twelve month
year.
✔✔If a Mortgage Broker violates provision of the GLB Act, the CFPB may bring action
and impose penalties against the Broker up to $__________________. - ✔✔$10,000
✔✔Per the Dodd-Frank Act, the borrower's ability to repay a loan does not apply to 4
types of financing. The 4 exceptions include _____________, _____________,
_____________ and __________. - ✔✔Open End credit loans, timeshare plans,
reverse mortgage and a temporary loan.
✔✔Which Federal Law allows the borrower to challenge the value stated on an
appraisal? - ✔✔ECOA
✔✔Per the Federal Fair Housing Act, the phrase that must be included in a broadcast
advertisement is _________________________. - ✔✔Equal Housing Lender
✔✔Per RESPA, a loan application must include ____________________.
a. a property address
, b. an estimate of value
c. Both a and b
d. Neither a or b - ✔✔b. Both A and B
✔✔While generally prohibited, a higher priced loan can include prepayment penalties
for up to __________ years. - ✔✔2 Years
✔✔A borrower earns $10,000 per month and has installment debt and revolving charge
payments of $1,400 per month. Per FHA guidelines this borrowers maximum allowable
housing expense is _______________. - ✔✔$2,900. $10,000 X 43% = $4,300 - $1,400
= $2,900
FHA ratios 31/43
Use the lesser of the front/back end
Front=$10,000 X 31%=$3,100
✔✔The amount of money that the VA will guarantee is called the
_______________________. - ✔✔Entitlement
✔✔Sheryl and Marty jointly own their primary residence which they are refinancing.
Marty is given the only copy of the notice of the right to rescind. How long do they have
to rescind the transaction? - ✔✔3 Years. All co-owners should receive a rescission
notice. Per TILA (the truth in lending act) the rescission period is expanded to three
years if there has not been complete or proper disclosure of the right to rescind.
✔✔Per the Federal Fair Housing Act what must be displayed in every branch where
mortgage loans are made? - ✔✔The "Equal Housing Opportunity" poster.
✔✔Who are the three largest lenders/investors in the secondary market? - ✔✔FNMA,
GNMA, and FHLMC. Fannie Mae, Ginnie Mae and Freddie Mac
✔✔The Real Estate Settlement Procedures Act (RESPA) is also known as Regulation
_______________. - ✔✔Regulation X
✔✔The ________________ is the purchase price of the property plus the allowable
buyer paid closing costs. - ✔✔Acquisition Cost
✔✔Per Reg Z in 2014, a loan is considered higher priced if the APR exceeds the APOR
by ___________% for a 1st mortgage, ___________% for a jumbo 1st lien or
________% for a subordinate lien. - ✔✔5%, 5%, 5%, all five percent.
✔✔Money paid by a lender to a Mortgage Broker for adding value to the loan is called
__________________. - ✔✔YSP, Yield Spread Premium
