SAFE MORTGAGE LOAN ORIGINATOR TEST UPDATED ACTUAL
EXAM QUESTIONS AND CORRECT ANSWERS
Question 1.
Prequalification
Correct Answer: an estimate of the loan amt. for which the buyer can qualify
based on his in-come/credit under the lenders standards
Question 2.
USDA ratio
Correct Answer: 29/41
Question 3.
FHA ratio
Correct Answer: 31/43
Question 4.
Asset based loan
Correct Answer: -loans based on borrowers equity -bad when lenders fail to
consider ability to repay
Question 5.
High Cost Loan
Correct Answer: Reg Z - Sec. 1026.32 -APR will exceed by more than 6.5% for
first lien loans or by more than 8.5% for subordinate -APOR - average prime
offer rate 1. 5% 2. 6.5% 3. 8.5%
Question 6.
RESPA - Section 8
Correct Answer: Nothing of value for referrals - No kickbacks
Question 7.
Respa - Esign Act
Correct Answer: can use electronic signature with permission of borrower
Question 8.
Gramm Leach Bliley
, Correct Answer: -borrower notification must state who company shares info with
-consumers can opt-out of info sharing (send notice to consumer) -Protects from
phishing -Safeguard Rules
Question 9.
Safeguard Rules
Correct Answer: -company and staff need to protect the consumers identity
-lock up files -part of GLB act
Question 10.
second mortgage
Correct Answer: -All money upfront -no escrow as long as first mortgage is
paying it
Question 11.
Subordination Clause
Correct Answer: A contract clause that puts a mortgage in the first lien position
over an earlier recorded mortgage
Question 12.
Denial Of License
Correct Answer: -any non-financial felony in the past 7 years -financial felony
ever -financial misdemeanor (state decides) -License has been revoked in
another state -default on a federal student loan
Question 13.
Income
Correct Answer: -Need to years history and 3 more years expected income -do
not include sporadic overtime and bonuses -likelihood of continued income
Question 14.
TILA - Respa Integrated Disclosure
Correct Answer: -TRID -LE must be disclosed within 3 business days -cannot
require documentation from borrower without "intent to proceed" -Appraisal is
considered 0% tolerance
EXAM QUESTIONS AND CORRECT ANSWERS
Question 1.
Prequalification
Correct Answer: an estimate of the loan amt. for which the buyer can qualify
based on his in-come/credit under the lenders standards
Question 2.
USDA ratio
Correct Answer: 29/41
Question 3.
FHA ratio
Correct Answer: 31/43
Question 4.
Asset based loan
Correct Answer: -loans based on borrowers equity -bad when lenders fail to
consider ability to repay
Question 5.
High Cost Loan
Correct Answer: Reg Z - Sec. 1026.32 -APR will exceed by more than 6.5% for
first lien loans or by more than 8.5% for subordinate -APOR - average prime
offer rate 1. 5% 2. 6.5% 3. 8.5%
Question 6.
RESPA - Section 8
Correct Answer: Nothing of value for referrals - No kickbacks
Question 7.
Respa - Esign Act
Correct Answer: can use electronic signature with permission of borrower
Question 8.
Gramm Leach Bliley
, Correct Answer: -borrower notification must state who company shares info with
-consumers can opt-out of info sharing (send notice to consumer) -Protects from
phishing -Safeguard Rules
Question 9.
Safeguard Rules
Correct Answer: -company and staff need to protect the consumers identity
-lock up files -part of GLB act
Question 10.
second mortgage
Correct Answer: -All money upfront -no escrow as long as first mortgage is
paying it
Question 11.
Subordination Clause
Correct Answer: A contract clause that puts a mortgage in the first lien position
over an earlier recorded mortgage
Question 12.
Denial Of License
Correct Answer: -any non-financial felony in the past 7 years -financial felony
ever -financial misdemeanor (state decides) -License has been revoked in
another state -default on a federal student loan
Question 13.
Income
Correct Answer: -Need to years history and 3 more years expected income -do
not include sporadic overtime and bonuses -likelihood of continued income
Question 14.
TILA - Respa Integrated Disclosure
Correct Answer: -TRID -LE must be disclosed within 3 business days -cannot
require documentation from borrower without "intent to proceed" -Appraisal is
considered 0% tolerance
