MLO SAFE NMLS safe test practice
questions with complete solution latest
update
Taking advantage of ill-informed consumers through excessively high fees,
misrepresented loan terms, frequent refinancing that does not benefit the
borrower and other prohibited acts is called __________________________.
- correct answer ✔Predatory Lending.
RESPA-Real Estate Settlement Procedures Act - correct answer ✔The
Federal Statute that deals with the settlement of residential mortgage loans.
RESPA's section 9 Prohibits - correct answer ✔Home sellers from requiring
home buyers to purchase title insurance from a particular company providing
title services.
The Dodd-Frank Act modifies ECOA to require a creditor to furnish a copy of
an appraisal developed in connection with a first
mortgage_____________________ and absolutely not later than ________
business days prior to closing. - correct answer ✔upon completion and 3
business days
TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) - correct
answer ✔Per the Dodd Frank Act, a single disclosure form combines these 2
statements.
Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and fees
may not exceed ________% of the total loan amount. - correct answer ✔3%
(three percent)
,Per a provision of the Dodd-Frank Act mortgage lenders are to determine that
a borrower has a reasonable ability to repay a loan. Does this provision apply
to all loans or just owner occupied loans? - correct answer ✔All loans,
whether owner occupied or not.
A loan subject to HOEPA allows prepayment penalties for the first ______
years of the loan. - correct answer ✔2 (two) years
Per the Dodd-Frank Act an abusive act would include which of the following:
1. One that materially interferes with the consumers ability to understand the
product or service.
2. One that take unreasonable advantage of a consumers' lack of
understanding.
3. One that takes unreasonable advantage of the consumer's reasonable
reliance on the MLO. - correct answer ✔All three would be considered
abusive acts.
Per the Dodd-Frank Act if an MLO receives compensation directly from a
consumer, up to how much additional compensation may be received from a
lender in the same transaction? - correct answer ✔$0.00, dual compensation
is not allowed. Compensation must be borrower paid or lender paid.
What kinds of reasons are necessary for a lender to take adverse action with
regard to a borrower? - correct answer ✔Specific reasons.
Adverse action means ______________________. - correct answer ✔A
denial or revocation of credit. Also, a change in the terms of an existing credit
arrangement or a refusal to grant credit in substantially the amount or terms
requested.
,Per Regulation B, Lenders should retain certain records for _____________
months. - correct answer ✔25 Months
Because of the impact of the Dodd-Frank Act on a second mortgage, an APR
that exceeds the ________ by more than _____% is the trigger that defines a
high cost loan. - correct answer ✔APOR ( Average Prime Offer Rate), 8.5%
Regulation C is known as ________________________. - correct answer
✔HMDA, The Home Mortgage Disclosure Act.
What is the purpose of HMDA? - correct answer ✔The HMDA determines
whether financial institutions are serving the housing needs of their
communities. It also identifies patterns of discriminatory lending.
Under what circumstances can a lender with an Affiliated Business
Arrangement require a borrower to use a specific third party service provider?
- correct answer ✔If there are no kickback or referral fees and the service
provider is an attorney, credit reporting agency or appraiser the lender can
require that the borrower uses the provider
If a transfer of servicing occurs, the _______________ must provide a
servicing transfer statement not less than ________ days before the transfer
occurs. - correct answer ✔Servicer, 15 (fifteen) days.
An individual who fails the MLO written exam 3 times must wait _________
months to retake the exam. - correct answer ✔6 (Six) Months
Per RESPA, an annual escrow statement is required to ______________. -
correct answer ✔determine shortages and surpluses in the escrow account.
, When must the Servicing Disclosure Statement be provided to the borrower? -
correct answer ✔Within 3 (three) Business Days of the Application.
Any party involved in a federally covered loan that submits fraudulent
information is subject to a fine of up to $___________ and up to
__________years in prison. - correct answer ✔$1,000,000 (one million
dollars), 30 years in prison
Per RESPA, an escrow cushion is limited to a maximum of _________ of the
annual payments and surpluses over $_____must be refunded within
________ days. - correct answer ✔1/6th (2 months), $50 (fifty dollars), 30
(thirty) days.
A seller takes back a $100,000 PMM @ 5.5% interest. This straight note will
balloon after 10 years of payments. How much is the balloon payment? -
correct answer ✔$100,000 + interest for the last month. A straight note (term
mortgage) is a non-amortizing interest only mortgage. The balloon would
include the entire principal plus the last month's interest, as interest is paid in
arrears.
FNMA conforming debt ratios equal ______/________. - correct answer
✔28%, maximum housing expense/36% maximum total obligations
HOEPA stands for ___________________________. - correct answer
✔Home Ownership and Equity Protection Act.
RESPA applies to what type of properties? - correct answer ✔1-4 Unit
Residential Properties
On a conventional mortgage loan, who makes the final decision regarding
approval, denial or counter offer? - correct answer ✔The Underwriter
questions with complete solution latest
update
Taking advantage of ill-informed consumers through excessively high fees,
misrepresented loan terms, frequent refinancing that does not benefit the
borrower and other prohibited acts is called __________________________.
- correct answer ✔Predatory Lending.
RESPA-Real Estate Settlement Procedures Act - correct answer ✔The
Federal Statute that deals with the settlement of residential mortgage loans.
RESPA's section 9 Prohibits - correct answer ✔Home sellers from requiring
home buyers to purchase title insurance from a particular company providing
title services.
The Dodd-Frank Act modifies ECOA to require a creditor to furnish a copy of
an appraisal developed in connection with a first
mortgage_____________________ and absolutely not later than ________
business days prior to closing. - correct answer ✔upon completion and 3
business days
TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) - correct
answer ✔Per the Dodd Frank Act, a single disclosure form combines these 2
statements.
Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and fees
may not exceed ________% of the total loan amount. - correct answer ✔3%
(three percent)
,Per a provision of the Dodd-Frank Act mortgage lenders are to determine that
a borrower has a reasonable ability to repay a loan. Does this provision apply
to all loans or just owner occupied loans? - correct answer ✔All loans,
whether owner occupied or not.
A loan subject to HOEPA allows prepayment penalties for the first ______
years of the loan. - correct answer ✔2 (two) years
Per the Dodd-Frank Act an abusive act would include which of the following:
1. One that materially interferes with the consumers ability to understand the
product or service.
2. One that take unreasonable advantage of a consumers' lack of
understanding.
3. One that takes unreasonable advantage of the consumer's reasonable
reliance on the MLO. - correct answer ✔All three would be considered
abusive acts.
Per the Dodd-Frank Act if an MLO receives compensation directly from a
consumer, up to how much additional compensation may be received from a
lender in the same transaction? - correct answer ✔$0.00, dual compensation
is not allowed. Compensation must be borrower paid or lender paid.
What kinds of reasons are necessary for a lender to take adverse action with
regard to a borrower? - correct answer ✔Specific reasons.
Adverse action means ______________________. - correct answer ✔A
denial or revocation of credit. Also, a change in the terms of an existing credit
arrangement or a refusal to grant credit in substantially the amount or terms
requested.
,Per Regulation B, Lenders should retain certain records for _____________
months. - correct answer ✔25 Months
Because of the impact of the Dodd-Frank Act on a second mortgage, an APR
that exceeds the ________ by more than _____% is the trigger that defines a
high cost loan. - correct answer ✔APOR ( Average Prime Offer Rate), 8.5%
Regulation C is known as ________________________. - correct answer
✔HMDA, The Home Mortgage Disclosure Act.
What is the purpose of HMDA? - correct answer ✔The HMDA determines
whether financial institutions are serving the housing needs of their
communities. It also identifies patterns of discriminatory lending.
Under what circumstances can a lender with an Affiliated Business
Arrangement require a borrower to use a specific third party service provider?
- correct answer ✔If there are no kickback or referral fees and the service
provider is an attorney, credit reporting agency or appraiser the lender can
require that the borrower uses the provider
If a transfer of servicing occurs, the _______________ must provide a
servicing transfer statement not less than ________ days before the transfer
occurs. - correct answer ✔Servicer, 15 (fifteen) days.
An individual who fails the MLO written exam 3 times must wait _________
months to retake the exam. - correct answer ✔6 (Six) Months
Per RESPA, an annual escrow statement is required to ______________. -
correct answer ✔determine shortages and surpluses in the escrow account.
, When must the Servicing Disclosure Statement be provided to the borrower? -
correct answer ✔Within 3 (three) Business Days of the Application.
Any party involved in a federally covered loan that submits fraudulent
information is subject to a fine of up to $___________ and up to
__________years in prison. - correct answer ✔$1,000,000 (one million
dollars), 30 years in prison
Per RESPA, an escrow cushion is limited to a maximum of _________ of the
annual payments and surpluses over $_____must be refunded within
________ days. - correct answer ✔1/6th (2 months), $50 (fifty dollars), 30
(thirty) days.
A seller takes back a $100,000 PMM @ 5.5% interest. This straight note will
balloon after 10 years of payments. How much is the balloon payment? -
correct answer ✔$100,000 + interest for the last month. A straight note (term
mortgage) is a non-amortizing interest only mortgage. The balloon would
include the entire principal plus the last month's interest, as interest is paid in
arrears.
FNMA conforming debt ratios equal ______/________. - correct answer
✔28%, maximum housing expense/36% maximum total obligations
HOEPA stands for ___________________________. - correct answer
✔Home Ownership and Equity Protection Act.
RESPA applies to what type of properties? - correct answer ✔1-4 Unit
Residential Properties
On a conventional mortgage loan, who makes the final decision regarding
approval, denial or counter offer? - correct answer ✔The Underwriter
