NMLS SAFE EXAM NEWEST QUESTION
BANK QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) | A+
GRADE
An MLO takes an application and becomes suspicious of
the applicants Soc Sec. #; what should the MLO do?
(A) contact the police
(B) deny loan
(C) call soc sec admin and verify Soc Sec #
(D) wait to see if there is anymore suspicious activity
Correct Answer (D) wait to see if there is anymore
suspicious activity
A young couple is applying for a loan for a new home
purchase. A portion of their down payment is a loan from a
Grandparent for $25,000. The money was already given to
them and placed in their account three months prior to the
loan application. The loan payments won't start for one
year, how should the $25,000 be reported on the
mortgage application?
A. Asset
B. A Liability
C. Gift of funds
D. Not reported at all Correct Answer B). A Liability
What action should an MLO take if during a refinance
involving a mother and son the MLO gets the feeling the
mother is hesitant about the refinance?
,a.) Ignore the situation as it may be a family matter
b.) Pull the mother aside to discuss
c.) Refer the transaction to the AML department
d.) Pull the son aside to discuss Correct Answer A.) Ignore
the situation as it may be a family matter
MLO went on a vacation and had her LOA meet with her
client. When the MLO came back it was found that the
LOA was signing documents as the MLO, turns out this
practice was happening often and with MLO's permission.
What should be done?
a.Terminate the LO
b.)Terminate LOA
c.)Report to authorities
d.)Terminate both Correct Answer D.)Terminate both
A borrower applies for a loan and while in process notifies
the MLO they have just financed the purchase of a car for
their daughter who plans to make the payments. The
payments do not show on the borrower's current credit
report. What action should the MLO take?
a. Don't report the information since it is not on credit
b. Advise the UW and let them handle it
c. Ask the borrower to obtain a statement of terms
d. Turn the loan down Correct Answer C.) Ask the
borrower to obtain a statement of terms
2 types of fraud: Correct Answer Fraud for profit - think
insider
Fraud for housing - think consumer
,Which of the following could be an indication of possible
fraud on an application for an owner occupied purchase
transaction?
a. The applicants currently live with their parents
b. The applicants currently own & live in a property in the
same neighborhood as the property for the loan
c. The property is out of state
d. There are 4 applicants on the application Correct
Answer B.) The applicants currently own & live in a
property in the same neighborhood as the property for the
loan
Usually involves an appraiser and a group of people who
buy and resell to each other at
inflated prices and ultimately to another person. Correct
Answer Property Flipping
A loan on a fictitious home that does not exist on the land
Correct Answer Air Loan
Which is not an example of fraud?
a. shot gunning
b. straw buyer
c- stated loans
d- silent seconds Correct Answer C.) Stated Loans
A borrower who is employed as a waiter applied for a
mortgage loan. He told the MLO that he did not report all
his tip income on his tax return. What step should the MLO
take ?
a.) Contact the employer to verify the tip income
, b.) Tell the borrower to re-do his taxes correctly
c.) If sufficient use the income on the tax return
d.) Use the tip income anyway Correct Answer c.) If
sufficient use the income on the tax return
The client's appraisal comes in lower than expected
causing the borrower to bring $10,000 to the closing to
complete the refinance. The borrower advises the MLO he
only has $8,000 available to close. What should the MLO
advise the client to do?
a.) Ask a relative for the rest
b.) Ask the borrower if they have undeclared assets
c.) Loan the borrower $2,000 and have them repay after
closing
d.) Tell the borrower to take a cash advance on one of the
credit cards being paid off. Correct Answer b.) Ask the
borrower if they have undeclared assets
Concerning FHA loans, a mortgage insurance premium is
required until/for:
A. One year.
B. Seven years.
C. Five years.
D. 78-80% LTV, as long as the loan is no more than 0x30
in the last twelve months. Correct Answer 5 years
Courtney would like to purchase a home from Chuck.
Because of her prior credit problems, she is unable to
obtain conventional financing. Chuck decides to sell
Courtney the property, but he will retain the title until the
BANK QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) | A+
GRADE
An MLO takes an application and becomes suspicious of
the applicants Soc Sec. #; what should the MLO do?
(A) contact the police
(B) deny loan
(C) call soc sec admin and verify Soc Sec #
(D) wait to see if there is anymore suspicious activity
Correct Answer (D) wait to see if there is anymore
suspicious activity
A young couple is applying for a loan for a new home
purchase. A portion of their down payment is a loan from a
Grandparent for $25,000. The money was already given to
them and placed in their account three months prior to the
loan application. The loan payments won't start for one
year, how should the $25,000 be reported on the
mortgage application?
A. Asset
B. A Liability
C. Gift of funds
D. Not reported at all Correct Answer B). A Liability
What action should an MLO take if during a refinance
involving a mother and son the MLO gets the feeling the
mother is hesitant about the refinance?
,a.) Ignore the situation as it may be a family matter
b.) Pull the mother aside to discuss
c.) Refer the transaction to the AML department
d.) Pull the son aside to discuss Correct Answer A.) Ignore
the situation as it may be a family matter
MLO went on a vacation and had her LOA meet with her
client. When the MLO came back it was found that the
LOA was signing documents as the MLO, turns out this
practice was happening often and with MLO's permission.
What should be done?
a.Terminate the LO
b.)Terminate LOA
c.)Report to authorities
d.)Terminate both Correct Answer D.)Terminate both
A borrower applies for a loan and while in process notifies
the MLO they have just financed the purchase of a car for
their daughter who plans to make the payments. The
payments do not show on the borrower's current credit
report. What action should the MLO take?
a. Don't report the information since it is not on credit
b. Advise the UW and let them handle it
c. Ask the borrower to obtain a statement of terms
d. Turn the loan down Correct Answer C.) Ask the
borrower to obtain a statement of terms
2 types of fraud: Correct Answer Fraud for profit - think
insider
Fraud for housing - think consumer
,Which of the following could be an indication of possible
fraud on an application for an owner occupied purchase
transaction?
a. The applicants currently live with their parents
b. The applicants currently own & live in a property in the
same neighborhood as the property for the loan
c. The property is out of state
d. There are 4 applicants on the application Correct
Answer B.) The applicants currently own & live in a
property in the same neighborhood as the property for the
loan
Usually involves an appraiser and a group of people who
buy and resell to each other at
inflated prices and ultimately to another person. Correct
Answer Property Flipping
A loan on a fictitious home that does not exist on the land
Correct Answer Air Loan
Which is not an example of fraud?
a. shot gunning
b. straw buyer
c- stated loans
d- silent seconds Correct Answer C.) Stated Loans
A borrower who is employed as a waiter applied for a
mortgage loan. He told the MLO that he did not report all
his tip income on his tax return. What step should the MLO
take ?
a.) Contact the employer to verify the tip income
, b.) Tell the borrower to re-do his taxes correctly
c.) If sufficient use the income on the tax return
d.) Use the tip income anyway Correct Answer c.) If
sufficient use the income on the tax return
The client's appraisal comes in lower than expected
causing the borrower to bring $10,000 to the closing to
complete the refinance. The borrower advises the MLO he
only has $8,000 available to close. What should the MLO
advise the client to do?
a.) Ask a relative for the rest
b.) Ask the borrower if they have undeclared assets
c.) Loan the borrower $2,000 and have them repay after
closing
d.) Tell the borrower to take a cash advance on one of the
credit cards being paid off. Correct Answer b.) Ask the
borrower if they have undeclared assets
Concerning FHA loans, a mortgage insurance premium is
required until/for:
A. One year.
B. Seven years.
C. Five years.
D. 78-80% LTV, as long as the loan is no more than 0x30
in the last twelve months. Correct Answer 5 years
Courtney would like to purchase a home from Chuck.
Because of her prior credit problems, she is unable to
obtain conventional financing. Chuck decides to sell
Courtney the property, but he will retain the title until the
