Loan Originator Exam UPDATED
ACTUAL Exam Questions and
CORRECT Answers
Perfrom clerical and/or support duties under the supervision of a licensed entity - CORRECT
ANSWER - What activity is a loan processor permited to perform without requiring
licensure as a mortgage loan orginator under the SAFE Act?
a unique identifier (NML number) - CORRECT ANSWER - The SAFE act prohibits
individuals from engaging in the business of a residental mortage loan originator without
first obtaining a
Consumer handbook on adjustable rate mortgages (CHARM) - CORRECT ANSWER - What
documents must be provided to a borrower no later than three business days after an inital
mortgage application is recieved if the APR is Variable?
Loan to Value ratio - CORRECT ANSWER - Lenders use a measurement comparing the
amount of a mortgage with the apprasied value of the property, called the?
Transfer of real property - CORRECT ANSWER - Define conveyance?
Conducts appraisals (Uniform standards of professional apparisal practice, opinion estimate of
vale) - CORRECT ANSWER - A licensed appraiser is defined as an individual who?
The title company is not permitted to give anything of value to the recommending person -
CORRECT ANSWER - A person recommends a certain unaffliated title company to a loan
closing. What is true?
10 business days - CORRECT ANSWER - Once the inital Loan Estimate is issued, the
stimate of charges must be made available for at least?
Must close
simultaneously
with the first
mortgage -
,CORRECT ANSWER charcteristic of a purchase money second
mortgage?
- What is a
,The applicant states on the application that the location is a primary residence when the applicant
lives elsewhere - CORRECT ANSWER - A potential red flag of mortgage fraud activity on an
an owner-occupied refinance transaction occurs, when an applicant states on the loan
application?
The Lender and the purchaser - CORRECT - When obtaining a mortagage loan,
ANSWER title insurance is required to protect the?
Loan Estimate - CORRECT ANSWER - Within three business days of a complete
application, he TILA_RESPA Integrated Disclosure rule (TRID) requires the use of?
Both Systems provide credit risk assessment - CORRECT ANSWER - Which of the
following statements is true about the Fannie Mae and Freddie Mac underwriting systems?
If the APR change on a fixed rate loan does not exceed /125% or an ARM .250% - CORRECT
ANSWER - A revised Closing Disclosure is not required before a loan consummation
when
1. Total points and fees do not exceed 3% for loans over $100,000.00. 2. Term does not exceed
30 years. 3. No interest only. 4. No negative amortization. 5. Back end debt ratio not to exceed
43%. - CORRECT ANSWER - 15. Describe a "qualified mortgage"?
Rate sheet from a financial institution that guarantees a specific interest rate for a specific
number of days. - CORRECT ANSWER - Which of the following is the best example of a rate
lock agreement?
Host events for all real estate salespersons regardless of whether they have referred buyers in the
past - CORRECT ANSWER - Regarding real estate salespersons who may refer potential
homebuyers to a mortgage loan originator (MLO), an MLO is permitted to?
3 Business days before consummation. - CORRECT - Borrowers must receive a
ANSWER Closing Disclosure for review no later than?
, Notify the underwriter of the potential change - CORRECT ANSWER - A borrower works at
Company XYZ and was recently approved for a cash-out refinance of her primary residence.
The closing is scheduled for Friday. On Monday of closing week, the mortgage loan originator
(MLO) sees on the local news that XYZ is closing and the employees have been let go. What
should the MLO do?
1. Condominiums. 2. 1 - 4 Family residential properties. 3. Owner occupied primary residence -
CORRECT ANSWER - What property type is eligible for a Federal Housing
Administration (FHA) purchase transaction?
. 1. An MLO license was previously denied, revoked or suspended. 2. A felony in the last 7 years
or a financial felony at any time. - CORRECT ANSWER - What factors make a mortgage loan
originator (MLO) ineligible for licensure or temporary authority to act as an MLO?
The interest rate will remain fixed for 5 years followed by annual adjustments. - CORRECT
ANSWER - When educating a borrower about a 5/1
ARM loan product, the mortgage loan
originator (MLO) should provide the
borrower with which of the following
information?
Ask the borrower for written documentation to dispute the error - CORRECT -
ANSWER If a borrower reports that there is an
error on their credit file, a mortgage loan
originator should take the following
action?
Default on loan payments if market values
decline - CORRECT ANSWER - What is private mortgage insurance
(PMI) intended to cover?
ACTUAL Exam Questions and
CORRECT Answers
Perfrom clerical and/or support duties under the supervision of a licensed entity - CORRECT
ANSWER - What activity is a loan processor permited to perform without requiring
licensure as a mortgage loan orginator under the SAFE Act?
a unique identifier (NML number) - CORRECT ANSWER - The SAFE act prohibits
individuals from engaging in the business of a residental mortage loan originator without
first obtaining a
Consumer handbook on adjustable rate mortgages (CHARM) - CORRECT ANSWER - What
documents must be provided to a borrower no later than three business days after an inital
mortgage application is recieved if the APR is Variable?
Loan to Value ratio - CORRECT ANSWER - Lenders use a measurement comparing the
amount of a mortgage with the apprasied value of the property, called the?
Transfer of real property - CORRECT ANSWER - Define conveyance?
Conducts appraisals (Uniform standards of professional apparisal practice, opinion estimate of
vale) - CORRECT ANSWER - A licensed appraiser is defined as an individual who?
The title company is not permitted to give anything of value to the recommending person -
CORRECT ANSWER - A person recommends a certain unaffliated title company to a loan
closing. What is true?
10 business days - CORRECT ANSWER - Once the inital Loan Estimate is issued, the
stimate of charges must be made available for at least?
Must close
simultaneously
with the first
mortgage -
,CORRECT ANSWER charcteristic of a purchase money second
mortgage?
- What is a
,The applicant states on the application that the location is a primary residence when the applicant
lives elsewhere - CORRECT ANSWER - A potential red flag of mortgage fraud activity on an
an owner-occupied refinance transaction occurs, when an applicant states on the loan
application?
The Lender and the purchaser - CORRECT - When obtaining a mortagage loan,
ANSWER title insurance is required to protect the?
Loan Estimate - CORRECT ANSWER - Within three business days of a complete
application, he TILA_RESPA Integrated Disclosure rule (TRID) requires the use of?
Both Systems provide credit risk assessment - CORRECT ANSWER - Which of the
following statements is true about the Fannie Mae and Freddie Mac underwriting systems?
If the APR change on a fixed rate loan does not exceed /125% or an ARM .250% - CORRECT
ANSWER - A revised Closing Disclosure is not required before a loan consummation
when
1. Total points and fees do not exceed 3% for loans over $100,000.00. 2. Term does not exceed
30 years. 3. No interest only. 4. No negative amortization. 5. Back end debt ratio not to exceed
43%. - CORRECT ANSWER - 15. Describe a "qualified mortgage"?
Rate sheet from a financial institution that guarantees a specific interest rate for a specific
number of days. - CORRECT ANSWER - Which of the following is the best example of a rate
lock agreement?
Host events for all real estate salespersons regardless of whether they have referred buyers in the
past - CORRECT ANSWER - Regarding real estate salespersons who may refer potential
homebuyers to a mortgage loan originator (MLO), an MLO is permitted to?
3 Business days before consummation. - CORRECT - Borrowers must receive a
ANSWER Closing Disclosure for review no later than?
, Notify the underwriter of the potential change - CORRECT ANSWER - A borrower works at
Company XYZ and was recently approved for a cash-out refinance of her primary residence.
The closing is scheduled for Friday. On Monday of closing week, the mortgage loan originator
(MLO) sees on the local news that XYZ is closing and the employees have been let go. What
should the MLO do?
1. Condominiums. 2. 1 - 4 Family residential properties. 3. Owner occupied primary residence -
CORRECT ANSWER - What property type is eligible for a Federal Housing
Administration (FHA) purchase transaction?
. 1. An MLO license was previously denied, revoked or suspended. 2. A felony in the last 7 years
or a financial felony at any time. - CORRECT ANSWER - What factors make a mortgage loan
originator (MLO) ineligible for licensure or temporary authority to act as an MLO?
The interest rate will remain fixed for 5 years followed by annual adjustments. - CORRECT
ANSWER - When educating a borrower about a 5/1
ARM loan product, the mortgage loan
originator (MLO) should provide the
borrower with which of the following
information?
Ask the borrower for written documentation to dispute the error - CORRECT -
ANSWER If a borrower reports that there is an
error on their credit file, a mortgage loan
originator should take the following
action?
Default on loan payments if market values
decline - CORRECT ANSWER - What is private mortgage insurance
(PMI) intended to cover?
