MLO SAFE NMLS Safe Test Practice Questions
With All Correct & Verified Answers
1.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 .-
: Predatory Lending.
2.RESPA-Real Estate Settlement Procedures Act: The Federal Statute that
deals with the settlement of residential mortgage loans.
3.RESPA's section 9 Prohibits: Home sellers from requiring home
buyers to purchase title insurance from a particular company
providing title services.
4.The Dodd-Frank Act modifies ECOA to require a creditor to
furnish a copy of an appraisal developed in connection with a first
mort-
gage and absolutely not later than busi-
ness days prior to closing.: upon completion and 3 business days
5.TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate): Per the
Dodd Frank Act, a single disclosure form combines these 2 statements.
6.Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and
fees may not exceed % of the total loan amount.: 3% (three percent)
7.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?: All loans,
whether owner occupied or not.
8.A loan subject to HOEPA allows prepayment penalties for the first
years of the loan.: 2 (two) years
9.Per the Dodd-Frank Act an abusive act would include which of the
follow- ing:
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
understand- ing.
3. One that takes unreasonable advantage of the consumer's
reasonable reliance on the MLO.: All three would be considered
abusive acts.
10.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?: $0.00, dual compensation is not
allowed. Compensation must be borrower paid or lender paid.
11.What kinds of reasons are necessary for a lender to take adverse
action with regard to a borrower?: Specific reasons.
, MLO SAFE NMLS Safe Test Practice Questions
With All Correct & Verified Answers
12.Adverse action means .: 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.
, MLO SAFE NMLS Safe Test Practice Questions
With All Correct & Verified Answers
13.Per Regulation B, Lenders should retain certain records for
months.: 25 Months
14.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.: APOR ( Average Prime Offer Rate), 8.5%
15.Regulation C is known as .: HMDA, The
Home Mortgage Disclosure Act.
16.What is the purpose of HMDA?: The HMDA determines whether
financial institutions are serving the housing needs of their
communities. It also identifies patterns of discriminatory lending.
17.Under what circumstances can a lender with an Affiliated Business
Arrangement require a borrower to use a specific third party service
provider?: 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
18.If a transfer of servicing occurs, the must provide a
servicing transfer statement not less than days before the
transfer occurs.: Servicer, 15 (fifteen) days.
19.An individual who fails the MLO written exam 3 times must wait
months to retake the exam.: 6 (Six) Months
20.Per RESPA, an annual escrow statement is required to .: -
determine shortages and surpluses in the escrow account.
21.When must the Servicing Disclosure Statement be provided to the
borrow- er?: Within 3 (three) Business Days of the Application.
22.Any party involved in a federally covered loan that submits
fraudu- lent information is subject to a fine of up to $ and up to
years in prison.: $1,000,000 (one million dollars), 30 years in
prison
23.Per RESPA, an escrow cushion is limited to a maximum of
of the annual payments and surpluses over $ must be refunded
within
days.: 1/6th (2 months), $50 (fifty dollars), 30 (thirty) days.
24.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?-
: $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
, MLO SAFE NMLS Safe Test Practice Questions
With All Correct & Verified Answers
arrears.
25.FNMA conforming debt ratios equal / .: 28%,
maximum housing expense/36% maximum total obligations
26.HOEPA stands for .: Home Ownership
and Equity Protection Act.
With All Correct & Verified Answers
1.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 .-
: Predatory Lending.
2.RESPA-Real Estate Settlement Procedures Act: The Federal Statute that
deals with the settlement of residential mortgage loans.
3.RESPA's section 9 Prohibits: Home sellers from requiring home
buyers to purchase title insurance from a particular company
providing title services.
4.The Dodd-Frank Act modifies ECOA to require a creditor to
furnish a copy of an appraisal developed in connection with a first
mort-
gage and absolutely not later than busi-
ness days prior to closing.: upon completion and 3 business days
5.TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate): Per the
Dodd Frank Act, a single disclosure form combines these 2 statements.
6.Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and
fees may not exceed % of the total loan amount.: 3% (three percent)
7.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?: All loans,
whether owner occupied or not.
8.A loan subject to HOEPA allows prepayment penalties for the first
years of the loan.: 2 (two) years
9.Per the Dodd-Frank Act an abusive act would include which of the
follow- ing:
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
understand- ing.
3. One that takes unreasonable advantage of the consumer's
reasonable reliance on the MLO.: All three would be considered
abusive acts.
10.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?: $0.00, dual compensation is not
allowed. Compensation must be borrower paid or lender paid.
11.What kinds of reasons are necessary for a lender to take adverse
action with regard to a borrower?: Specific reasons.
, MLO SAFE NMLS Safe Test Practice Questions
With All Correct & Verified Answers
12.Adverse action means .: 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.
, MLO SAFE NMLS Safe Test Practice Questions
With All Correct & Verified Answers
13.Per Regulation B, Lenders should retain certain records for
months.: 25 Months
14.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.: APOR ( Average Prime Offer Rate), 8.5%
15.Regulation C is known as .: HMDA, The
Home Mortgage Disclosure Act.
16.What is the purpose of HMDA?: The HMDA determines whether
financial institutions are serving the housing needs of their
communities. It also identifies patterns of discriminatory lending.
17.Under what circumstances can a lender with an Affiliated Business
Arrangement require a borrower to use a specific third party service
provider?: 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
18.If a transfer of servicing occurs, the must provide a
servicing transfer statement not less than days before the
transfer occurs.: Servicer, 15 (fifteen) days.
19.An individual who fails the MLO written exam 3 times must wait
months to retake the exam.: 6 (Six) Months
20.Per RESPA, an annual escrow statement is required to .: -
determine shortages and surpluses in the escrow account.
21.When must the Servicing Disclosure Statement be provided to the
borrow- er?: Within 3 (three) Business Days of the Application.
22.Any party involved in a federally covered loan that submits
fraudu- lent information is subject to a fine of up to $ and up to
years in prison.: $1,000,000 (one million dollars), 30 years in
prison
23.Per RESPA, an escrow cushion is limited to a maximum of
of the annual payments and surpluses over $ must be refunded
within
days.: 1/6th (2 months), $50 (fifty dollars), 30 (thirty) days.
24.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?-
: $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
, MLO SAFE NMLS Safe Test Practice Questions
With All Correct & Verified Answers
arrears.
25.FNMA conforming debt ratios equal / .: 28%,
maximum housing expense/36% maximum total obligations
26.HOEPA stands for .: Home Ownership
and Equity Protection Act.
