MLO PRACTICE EXAM WITH COMPLETE
QUESTIONS AND CORECT DETAILED
ANSWERS (VERIFIED ANSWERS) |
ALREADY SCORED A+ | NEW UPDATE 2025
Not a condition for becoming an MLO? - ANSWER State and federal bank
ground check
What are the renewal requirements for MLOs? - ANSWER License application
renewal each year November 1 through December 31 attesting to the accuracy of
application information
An MLO did not complete CE required to submit license renewal prior to
expiration on December 31st, what course of action must MLO complete? -
ANSWER Cease active mortgage origination, complete continuing education
and apply for license reinstatement before March 1
During transitional licensing period MLO takes 8 loan applications. Two closed and
six are in the process. MLO is denied licensing and temporty authory is revoked.
What happens to 8 loans? - ANSWER Closed loans are closed, other 6 go to the
company. No compensation paid to MLO denied licensing on unclosed loans
_____ requires states to establish and adopt minimum provisions and uniform
standards for the licesning and registration of mortgage lending businesses,
mortgage brokers, and mortgage loan originators. Additionally, this system has
been designed to streamline process of licensing mortgage professionals who do
business in multiple jurisdictions. - ANSWER The Secure and Fair Enforcement
for Mortgage Licensing Act (SAFE Act)
,Qualified Mortgages (QM) are prohibited from having this attribute or feature? -
ANSWER Negative Amortization
What assets can be taken from estate other thansubject property to pay off
reverse mortgage balance with lender? - ANSWER Only the home
Loan program that does not require information, nor verify accuracy of income,
credit payment history or mortgage payment history includes: - ANSWER
Reverse Mortgage (these are based on collateral as method of repayment for 62
year old and older, since payment isn't expected until home is sold)
Which method is best approach to evaluate value of single family residential
rental property? - ANSWER Market approach
Loan level price adjustments (LLPA) represent what impact for a loan? -
ANSWER An adjustment to pricing of loan to lender meaning borrower can pay
discount points to get the same LTV
Which is loan secured by more than one piece of real estate as collateral? -
ANSWER Blanket mortgage is secured by more than one piece of real estate
property for collateral as security payment of blanket mortgage
Maximum loan amount on reverse mortgage is determined by which 4 factors? -
ANSWER Age, current interest rates, appraisal value of home, government
imposed lending limits
,What is mortgage clause with purpose of permitting borrower who has paid a
mortgage to force a release of a lien? - ANSWER Defeasance
Charging a rate in excess of maximum permissible by state law is known as what
term? - ANSWER Usury
Qualified Mortgages include any loan eligible for purchase by? - ANSWER A
government sponsored enterprise or FHA
What loans can be most readily assumed? - ANSWER VA loans, other veterans
with VA entitlement can assume loan relatively easily
Which of following is not accurate regarding seller concessions available to buyer
of real property? - ANSWER FNMA investment property maximum 3% with
20% down payment
Maximum amount of seller concession for any FNMA loan is 2%
What is best way to avoid FHA upfront Mortgage insurance premium of 1.75%? -
ANSWER Accept a HELOC
What is maximum debt to income for qualified mortgage? - ANSWER 43%
What is maximum loan for Reverse Mortgages? - ANSWER 66% for persons
aged 75+ up to maximum loan limit for area
, What best describes a jumbo loan? - ANSWER Loan exceeds FNMA and FHLMC
maximum loan limits and not eligible for sale as conforming loan
Which flood zones denotes a 1% chance of flooding known as base flood or 100-
year flood zone and requires flood hazard insurance? - ANSWER Zone A
Also Zone V. Both these zones require mandatory flood insurance.
Which appraisal approach is most commonly used for owner occupied property? -
ANSWER Sales comparison approach (aka market approach).
MARS entities have been pursued by which agency? - ANSWER FTC
Which sets forth escrow requirements for higher priced mortgage loans? -
ANSWER Truth in Lending Act
Which are prohibited by RESPA? - ANSWER Referral fees.
RESPA was enacted to eliminate referral fees and kickbacks
A mortgage clause permitting a mortgagee to call entire balance due as result of
default is called what? - ANSWER Acceleration
What are the new TRID forms named and when are they issued? - ANSWER
Loan Estimate 3 days after trigger and Loan Closing Form 3 days prior to
consummation
QUESTIONS AND CORECT DETAILED
ANSWERS (VERIFIED ANSWERS) |
ALREADY SCORED A+ | NEW UPDATE 2025
Not a condition for becoming an MLO? - ANSWER State and federal bank
ground check
What are the renewal requirements for MLOs? - ANSWER License application
renewal each year November 1 through December 31 attesting to the accuracy of
application information
An MLO did not complete CE required to submit license renewal prior to
expiration on December 31st, what course of action must MLO complete? -
ANSWER Cease active mortgage origination, complete continuing education
and apply for license reinstatement before March 1
During transitional licensing period MLO takes 8 loan applications. Two closed and
six are in the process. MLO is denied licensing and temporty authory is revoked.
What happens to 8 loans? - ANSWER Closed loans are closed, other 6 go to the
company. No compensation paid to MLO denied licensing on unclosed loans
_____ requires states to establish and adopt minimum provisions and uniform
standards for the licesning and registration of mortgage lending businesses,
mortgage brokers, and mortgage loan originators. Additionally, this system has
been designed to streamline process of licensing mortgage professionals who do
business in multiple jurisdictions. - ANSWER The Secure and Fair Enforcement
for Mortgage Licensing Act (SAFE Act)
,Qualified Mortgages (QM) are prohibited from having this attribute or feature? -
ANSWER Negative Amortization
What assets can be taken from estate other thansubject property to pay off
reverse mortgage balance with lender? - ANSWER Only the home
Loan program that does not require information, nor verify accuracy of income,
credit payment history or mortgage payment history includes: - ANSWER
Reverse Mortgage (these are based on collateral as method of repayment for 62
year old and older, since payment isn't expected until home is sold)
Which method is best approach to evaluate value of single family residential
rental property? - ANSWER Market approach
Loan level price adjustments (LLPA) represent what impact for a loan? -
ANSWER An adjustment to pricing of loan to lender meaning borrower can pay
discount points to get the same LTV
Which is loan secured by more than one piece of real estate as collateral? -
ANSWER Blanket mortgage is secured by more than one piece of real estate
property for collateral as security payment of blanket mortgage
Maximum loan amount on reverse mortgage is determined by which 4 factors? -
ANSWER Age, current interest rates, appraisal value of home, government
imposed lending limits
,What is mortgage clause with purpose of permitting borrower who has paid a
mortgage to force a release of a lien? - ANSWER Defeasance
Charging a rate in excess of maximum permissible by state law is known as what
term? - ANSWER Usury
Qualified Mortgages include any loan eligible for purchase by? - ANSWER A
government sponsored enterprise or FHA
What loans can be most readily assumed? - ANSWER VA loans, other veterans
with VA entitlement can assume loan relatively easily
Which of following is not accurate regarding seller concessions available to buyer
of real property? - ANSWER FNMA investment property maximum 3% with
20% down payment
Maximum amount of seller concession for any FNMA loan is 2%
What is best way to avoid FHA upfront Mortgage insurance premium of 1.75%? -
ANSWER Accept a HELOC
What is maximum debt to income for qualified mortgage? - ANSWER 43%
What is maximum loan for Reverse Mortgages? - ANSWER 66% for persons
aged 75+ up to maximum loan limit for area
, What best describes a jumbo loan? - ANSWER Loan exceeds FNMA and FHLMC
maximum loan limits and not eligible for sale as conforming loan
Which flood zones denotes a 1% chance of flooding known as base flood or 100-
year flood zone and requires flood hazard insurance? - ANSWER Zone A
Also Zone V. Both these zones require mandatory flood insurance.
Which appraisal approach is most commonly used for owner occupied property? -
ANSWER Sales comparison approach (aka market approach).
MARS entities have been pursued by which agency? - ANSWER FTC
Which sets forth escrow requirements for higher priced mortgage loans? -
ANSWER Truth in Lending Act
Which are prohibited by RESPA? - ANSWER Referral fees.
RESPA was enacted to eliminate referral fees and kickbacks
A mortgage clause permitting a mortgagee to call entire balance due as result of
default is called what? - ANSWER Acceleration
What are the new TRID forms named and when are they issued? - ANSWER
Loan Estimate 3 days after trigger and Loan Closing Form 3 days prior to
consummation
