RMLO… REAL ESTATE AGENTS (CHAMPIONS)EXAM WITH ANSWERS

RMLO… REAL ESTATE AGENTS
(CHAMPIONS)EXAM WITH ANSWERS




Primary Mortgage Market - correct answer-The market where borrowers and
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mortgage originators come together to negotiate terms and effectuate mortgage
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transaction. Mortgage brokers, mortgage bankers, credit unions and banks are all
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part of the primary mortgage market.
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Secondary Mortgage Market - correct answer-A market for the purchase and sale of
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existing mortgages designed to provide greater liquidity for selling mortgages.
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Commercial Banks - correct answer-Working capital is primarily generated through
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deposits from its clients
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Private Lenders - correct answer-The least regulated category of lender, they can
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fulfill a space in the marketplace for conventional loans.
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Mortgage Companies - correct answer-Rely on commercial banks that grant
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"warehouse" lines of credit to them.
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Federal Housing Finance Agency (FHFA) - correct answer-The Federal agency
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established to restore Fannie Mae & Freddie Mac to a sound & solvent financial
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condition.
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Government National Mortgage (GNMA) Association - correct answer-Guarantee
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that allows mortgage lenders to obtain a better price for their loans in the capital
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markets.
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Pre-licensing education - correct answer-Includes topics on federal law and
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regulations, ethics, non traditional mortgage products, and origination.
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,Unique Identifier - correct answer-a number that permanently identifies each
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mortgage loan originator, whether he is licensed or merely registered.
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S.A.F.E. Act - correct answer-Designed to enhance consumer protection & reduce
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fraud by encouraging states to establish minimum standards for licensing and
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registration of MLOs.
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State-licensed mortgage loan originator - correct answer-An MLO employed by a
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federally insured depository institution is a federally supervised credit union.
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American Association of Residential Mortgage Regulators (AARMR) - correct
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answer-National association of executives and employees of the various states
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charged with the responsibility for administration & regulation of residential mortgage
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lending, servicing and brokering.
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Nationwide Mortgage Licensing System & Registry (NMLSR) - correct answer-All
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loan originators must be licensed through or registered with_____.
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Federal Banking Agencies: - correct answer-1.The Board of Governors of the
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Federal Reserve System
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2. The Comptroller of the Currency
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3. The National Credit Union Administraton
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(NCUA)
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4. The Federal Deposit Insurance Corporation
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(FDIC)
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Regulation G of the SAFE Act establishes - correct answer-A federal registration
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requirement for mortgage loan originators.
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Regulation "H" authorizes: - correct answer-The CFPB to implement the Secure and
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Fair Enforcement for Mortgage Licensing Act of 2008. It also directs the states to
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adopt minimum uniform standards for licensing & registration of residential mortgage
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loan originators.
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All loan originators must be licensed through or registered with: - correct answer-
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NMLSR

Nov. 1st through Dec. 31st of each year... - correct answer-Registered MLOs must
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renew their registration during
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Non-traditional Mortgage Product - correct answer-Any mortgage product other than
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a 30 year fixed rate mortgage.
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Residential Mortgage Loan - correct answer-Any loan primarily for personal, family,
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or household use that is secured by a mortgage, deed of trust, or other equivalent
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, vconsensual security interest on a dwelling or residential real estate upon which a
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vdwelling is constructed or intended to be constructed.
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Federally Registered Loan Originator - correct answer-Is an individual who meets
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the definition of a loan originator and is an employee of a depository institution that is
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regulated by a federal banking agency.
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Mortgage Loan Originator - correct answer-Person who takes a residential mortgage
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loan application.
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Permanently Identifies Loan Originator - correct answer-Unique Identifier
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Stable Income - correct answer-A borrower's gross monthly income from all
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verifiable sources that can reasonably be expected to continue for at least 3 years.
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Credit Score - correct answer-An overall assessment that predicts a borrower's
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credit risk.
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Employee Income - correct answer-A borrower's base pay/regular wages.
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Hard Inquiry - correct answer-Appears on a consumer's credit report and can
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influence their credit score.
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Soft Inquiry - correct answer-Does not appear on credit report or impact consumer's
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credit score.
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Exceptions to the 2 year employment history requirement - correct answer-School
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and military
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"4 R" model used to determine the borrower's monthly income. Are the employment
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& income considered: - correct answer-Regular (earned on consistent basis),
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Recurring (weekly, bi-weekly), Received in cash (W-2, Tax return or Bank
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Statement), Reasonable (is income inline or realistic for occupation?)
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Credit Scoring was first developed in - correct answer-The 1950's
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The "Three C's of Underwriting" - correct answer-Credit Reputation, Capacity and
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Collateral
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Collateral - correct answer-Borrower's total equity or down payment.
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Form 1003 - correct answer-Is completed twice during loan application. First time is
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generally referred to as "initial 1003...at time of application.
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Credit worthiness - correct answer-Often determined from the applicant's credit
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history and experience regarding repayment of loans & use of revolving credit such
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as credit cards.
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The most critical lending component is - correct answer-Establishing
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suitability...matching a borrower with a loan that they are able to repay.
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