Loan Originator Practice Exam 6 Questions and Correct Answers Latest Update 2025
The Equal Credit Opportunity Act requires a Notice of Incomplete Application be provided to a
borrower: - Answers "within 30 days of application, if the application is missing required information
ECOA requires the borrower to know the status of his/her loan within 30 days of application. This
includes letting the borrower know, within 30 days, that his/her application needs to be completed in
order for any further consideration of the file.
"
Cindy bought a home and closed on a 6.0% rate for 30 years. The loan includes a payment feature that
allows Cindy to make a $1,400/month payment for the first five years, and a $1,800/month payment for
the remainder of the loan. What type of loan is this? - Answers "fixed rate
This loan is a fixed-rate loan (at 6% for 30 years). The payment example shows an interest-only feature
for the first five years and then a fully-amortized payment for the remainder of the loan.
"
"All of the following are included in the calculation of the APR, except:
Underwriting fees
Buy-down fees
Origination fees
Title insurance fees" - Answers "title insurance fees
In addition to charges paid over the term of the loan (e.g., interest and mortgage insurance premiums
paid over the loan's term), the calculation of the APR includes many prepaid finance charges, including,
among others, underwriting fees, buy-down fees, and origination fees. However, some fees are not
included in the prepaid finance charges used in APR calculations, including title insurance fees.
"
"An acceleration clause is sometimes added to reverse mortgages. This means that the loan could
become due and payable under certain circumstances, which may include all but which of the following?
, A new owner is added to the title
The borrower adds MIP to the loan
New debt against the home is taken out
All or part of the home is rented out" - Answers "the borrower adds MIP to the loan
Reverse mortgages may contain acceleration clauses which can cause a loan to become due and
payable. Reasons for this may include adding an owner to the title, taking out new debt against the
home, or renting out all or part of the home. Some reverse mortgages do include MIP, which helps to
guarantee that the borrower will never owe more than the value of the home.
"
"A loan processor or underwriter is exempt from licensure under all of the following circumstances,
except:
He/she is employed with a licensed mortgage broker
He/she is employed with an exempt mortgage lender
He/she does not represent to the public that he/she can perform any of the activities of a loan
originator
He/she takes applications on behalf of the loan originator" - Answers "he/she takes applications on
behalf of the loan originator
A processor and/or underwriter may only maintain exempt status from licensure if engaged solely in
clerical or support duties while employed with either a licensed or exempt entity. Under no
circumstances may a processor or underwriter engage in the activities of a loan originator.
"
"Civil monetary penalties resulting from the failure to report data for HMDA are:
" - Answers "calculated based on a penalty matrix, which considers good faith, previous violations, and
financial resources of the entity involved.
The Equal Credit Opportunity Act requires a Notice of Incomplete Application be provided to a
borrower: - Answers "within 30 days of application, if the application is missing required information
ECOA requires the borrower to know the status of his/her loan within 30 days of application. This
includes letting the borrower know, within 30 days, that his/her application needs to be completed in
order for any further consideration of the file.
"
Cindy bought a home and closed on a 6.0% rate for 30 years. The loan includes a payment feature that
allows Cindy to make a $1,400/month payment for the first five years, and a $1,800/month payment for
the remainder of the loan. What type of loan is this? - Answers "fixed rate
This loan is a fixed-rate loan (at 6% for 30 years). The payment example shows an interest-only feature
for the first five years and then a fully-amortized payment for the remainder of the loan.
"
"All of the following are included in the calculation of the APR, except:
Underwriting fees
Buy-down fees
Origination fees
Title insurance fees" - Answers "title insurance fees
In addition to charges paid over the term of the loan (e.g., interest and mortgage insurance premiums
paid over the loan's term), the calculation of the APR includes many prepaid finance charges, including,
among others, underwriting fees, buy-down fees, and origination fees. However, some fees are not
included in the prepaid finance charges used in APR calculations, including title insurance fees.
"
"An acceleration clause is sometimes added to reverse mortgages. This means that the loan could
become due and payable under certain circumstances, which may include all but which of the following?
, A new owner is added to the title
The borrower adds MIP to the loan
New debt against the home is taken out
All or part of the home is rented out" - Answers "the borrower adds MIP to the loan
Reverse mortgages may contain acceleration clauses which can cause a loan to become due and
payable. Reasons for this may include adding an owner to the title, taking out new debt against the
home, or renting out all or part of the home. Some reverse mortgages do include MIP, which helps to
guarantee that the borrower will never owe more than the value of the home.
"
"A loan processor or underwriter is exempt from licensure under all of the following circumstances,
except:
He/she is employed with a licensed mortgage broker
He/she is employed with an exempt mortgage lender
He/she does not represent to the public that he/she can perform any of the activities of a loan
originator
He/she takes applications on behalf of the loan originator" - Answers "he/she takes applications on
behalf of the loan originator
A processor and/or underwriter may only maintain exempt status from licensure if engaged solely in
clerical or support duties while employed with either a licensed or exempt entity. Under no
circumstances may a processor or underwriter engage in the activities of a loan originator.
"
"Civil monetary penalties resulting from the failure to report data for HMDA are:
" - Answers "calculated based on a penalty matrix, which considers good faith, previous violations, and
financial resources of the entity involved.
