NMLS S.A.F.E. Exam 3 questions well
answered already passed
During initial application, loan originators must make disclosure of all of the following, except:
A. Regulatory history
B. Criminal history
C. Civil and administrative records
D. Three-year history of loan production - correct answer ✔✔D. Three-year history of loan
production
The process of pooling together similar types of loans to create mortgage-backed securities for
sale in the secondary financial markets is called:
A. Diversification
B. Capitalization
C. Securitization
D. Collateralization - correct answer ✔✔C. Securitization
Which of the following features would be permitted for a non-qualified mortgage, but not for a
qualified mortgage?
A. A term of 15 years
B. An adjustable interest rate
C. A debt-to-income ratio of 43%
D. An interest-only option - correct answer ✔✔D. An interest-only option
,What federal legislation requires loan originators to collect demographic data to ensure that
creditors are not engaging in discriminatory lending?
A. ECOA
B. HMDA
C. GLB Act
D. FCRA - correct answer ✔✔B. HMDA
Which of the following is true?
A. Open-end credit plans, timeshare plans, and reverse mortgage loans are exempt from the
ATR Rule
B. Open-end credit plans, timeshare plans, and closed-end consumer credit loans are exempt
from the ATR Rule
C. Open-end credit plans are covered by the ATR Rule
D. Reverse mortgage loans are covered by the ATR Rule - correct answer ✔✔A. Open-end credit
plans, timeshare plans, and reverse mortgage loans are exempt from the ATR Rule
A first-lien mortgage loan will exceed the HOEPA APR threshold and qualify as a high-cost
mortgage if its APR is:
A. 1.5 percentage points above the average prime offer rate for a comparable transaction
B. 6.5 percentage points above the average prime offer rate for a comparable transaction
C. 3 percentage points above the average prime offer rate for a comparable transaction
D. 4.5 percentage points above the average prime offer rate for a comparable transaction -
correct answer ✔✔B. 6.5 percentage points above the average prime offer rate for a
comparable transaction
,Which of the following forms is the appraisal form used for investment properties?
A. 1007
B. 1073
C. 1004
D. 1005 - correct answer ✔✔A. 1007
Leslee is a loan processor who is not required to perform her duties at the direction of or
subject to the supervision and instruction of an individual who is licensed or exempt. Leslee is
a(n):
A. Registered loan originator
B. Mortgage loan originator
C. Independent contractor
D. Licensed loan processor - correct answer ✔✔C. Independent contractor
The Truth in Lending Act protects consumers in the mortgage market by:
A. Using disclosures to ensure that consumers make informed choices for loan products
B. Prohibiting subprime mortgage loan transactions
C. Regulating the interest rates that creditors can charge for conventional mortgage loans
D. Limiting the cost of settlement services by imposing caps on amounts charged - correct
answer ✔✔A. Using disclosures to ensure that consumers make informed choices for loan
products
By adding together the margin and index, the result is known as the:
, A. True index
B. Rate ceiling
C. Start rate
D. Fully indexed rate - correct answer ✔✔D. Fully indexed rate
Bob Bachman is applying for a mortgage with MZ Mortgage. He is referred by MZ Mortgage to a
title company in which MZ Mortgage has a 10% ownership interest. At what point must Bob be
made aware of the relationship between the two companies?
A. At the time of the referral
B. It is not necessary, because MZ Mortgage owns less than 25% of the title company
C. Within three business days of application
D. Within three business days after the referral - correct answer ✔✔A. At the time of the
referral
An interest-only loan might be suitable for any of the following, except:
A. A corporate executive who receives large quarterly bonuses
B. A part-time hourly worker who may get overtime in the summer and plans to pay principal at
that time
C. An investor who would prefer to pay as little as possible while holding the property
D. A self-employed borrower whose company is busiest during a six-month period over the
holidays - correct answer ✔✔B. A part-time hourly worker who may get overtime in the
summer and plans to pay principal at that time
Which of the following is not permitted for a HOEPA loan?
answered already passed
During initial application, loan originators must make disclosure of all of the following, except:
A. Regulatory history
B. Criminal history
C. Civil and administrative records
D. Three-year history of loan production - correct answer ✔✔D. Three-year history of loan
production
The process of pooling together similar types of loans to create mortgage-backed securities for
sale in the secondary financial markets is called:
A. Diversification
B. Capitalization
C. Securitization
D. Collateralization - correct answer ✔✔C. Securitization
Which of the following features would be permitted for a non-qualified mortgage, but not for a
qualified mortgage?
A. A term of 15 years
B. An adjustable interest rate
C. A debt-to-income ratio of 43%
D. An interest-only option - correct answer ✔✔D. An interest-only option
,What federal legislation requires loan originators to collect demographic data to ensure that
creditors are not engaging in discriminatory lending?
A. ECOA
B. HMDA
C. GLB Act
D. FCRA - correct answer ✔✔B. HMDA
Which of the following is true?
A. Open-end credit plans, timeshare plans, and reverse mortgage loans are exempt from the
ATR Rule
B. Open-end credit plans, timeshare plans, and closed-end consumer credit loans are exempt
from the ATR Rule
C. Open-end credit plans are covered by the ATR Rule
D. Reverse mortgage loans are covered by the ATR Rule - correct answer ✔✔A. Open-end credit
plans, timeshare plans, and reverse mortgage loans are exempt from the ATR Rule
A first-lien mortgage loan will exceed the HOEPA APR threshold and qualify as a high-cost
mortgage if its APR is:
A. 1.5 percentage points above the average prime offer rate for a comparable transaction
B. 6.5 percentage points above the average prime offer rate for a comparable transaction
C. 3 percentage points above the average prime offer rate for a comparable transaction
D. 4.5 percentage points above the average prime offer rate for a comparable transaction -
correct answer ✔✔B. 6.5 percentage points above the average prime offer rate for a
comparable transaction
,Which of the following forms is the appraisal form used for investment properties?
A. 1007
B. 1073
C. 1004
D. 1005 - correct answer ✔✔A. 1007
Leslee is a loan processor who is not required to perform her duties at the direction of or
subject to the supervision and instruction of an individual who is licensed or exempt. Leslee is
a(n):
A. Registered loan originator
B. Mortgage loan originator
C. Independent contractor
D. Licensed loan processor - correct answer ✔✔C. Independent contractor
The Truth in Lending Act protects consumers in the mortgage market by:
A. Using disclosures to ensure that consumers make informed choices for loan products
B. Prohibiting subprime mortgage loan transactions
C. Regulating the interest rates that creditors can charge for conventional mortgage loans
D. Limiting the cost of settlement services by imposing caps on amounts charged - correct
answer ✔✔A. Using disclosures to ensure that consumers make informed choices for loan
products
By adding together the margin and index, the result is known as the:
, A. True index
B. Rate ceiling
C. Start rate
D. Fully indexed rate - correct answer ✔✔D. Fully indexed rate
Bob Bachman is applying for a mortgage with MZ Mortgage. He is referred by MZ Mortgage to a
title company in which MZ Mortgage has a 10% ownership interest. At what point must Bob be
made aware of the relationship between the two companies?
A. At the time of the referral
B. It is not necessary, because MZ Mortgage owns less than 25% of the title company
C. Within three business days of application
D. Within three business days after the referral - correct answer ✔✔A. At the time of the
referral
An interest-only loan might be suitable for any of the following, except:
A. A corporate executive who receives large quarterly bonuses
B. A part-time hourly worker who may get overtime in the summer and plans to pay principal at
that time
C. An investor who would prefer to pay as little as possible while holding the property
D. A self-employed borrower whose company is busiest during a six-month period over the
holidays - correct answer ✔✔B. A part-time hourly worker who may get overtime in the
summer and plans to pay principal at that time
Which of the following is not permitted for a HOEPA loan?
