NMLS Practice Exam #3 questions with correct
solutions 2024\2025
The preferred debt-to-income ratio for applicants for VA loans is:
- 35%
- 43%
- 50%
- 41%
- correct answer 41%
When would a license be suspended without a hearing?
- If a licensee fails to renew
- If a licensee fails to request a hearing with the state regulator
- If a licensee has failed to complete pre-licensing requirements
- If a licensee has already executed a right to a hearing for a previous violation
- correct answer If a licensee fails to request a hearing with the state regulator
After a borrower allows the assumption of his or her VA loan, he or she may use his or her VA privilege
again only after:
- Five years have passed
- The home is sold to a new owner
- The original VA loan is satisfied
- The original VA loan is moved from his or her name into the name of the assuming borrower
- correct answer The original VA loan is satisfied
,During initial application for a license, loan originators must make disclosure of all of the following,
except:
- Regulatory history
- Criminal history
- Civil and administrative records
- Three-year history of loan production
- correct answer Three-year history of loan production
In order to qualify for an adjustable-rate mortgage, a consumer must be able to show that he or she can:
- Make regularly scheduled payments that are calculated using the loan's introductory rate
- Make amortizing payments that are calculated using the fully indexed rate for the ARM
- Make amortizing payments that are calculated using the loan's rate after the first interest rate
adjustment occurs
- Make regularly scheduled payments that are calculated using the fixed interest rate for which the
consumer would be eligible
- correct answer Make amortizing payments that are calculated using the fully indexed rate for the ARM
Wilbur Green is applying for a loan originator license. His credit report indicates that he has a number of
judgments filed against him, all related to a serious medical condition his wife suffered four years prior.
Will Wilbur be denied a license because of the judgments?
- Yes, current outstanding judgments show a lack of financial responsibility
- Yes, because they indicate a pattern of seriously delinquent accounts within the past three years
- No, because the judgments are a result of medical expenses, they will not be held against him
- The judgments will not be held against him because they were entered more than three years ago
- correct answer No, because the judgments are a result of medical expenses, they will not be held
against him
The most commonly used type of reverse mortgage is known as a:
,- Proprietary loan
- Home equity conversion mortgage
- Single-purpose conforming mortgage
- Interest-only loan
- correct answer Home equity conversion mortgage
What legislation was enacted because of anecdotal evidence that women were not treated on an equal
basis with men in credit markets, particularly in mortgage credit markets?
- HOEPA
- FACTA
- ECOA
- Fair Housing Act
- correct answer ECOA
Money paid by a buyer to a seller at the time of entering into a contract to indicate intent and ability to
carry out the contract is called:
- Down payment
- Earnest money
- Escrow funds
- Service release premium
- correct answer Earnest money
The Pois have just closed on their mortgage loan at a formal settlement meeting. What is mortgage loan
originator Leilani's responsibility after loan closing?
- She must provide any required re-disclosures
- None; Leilani's tasks are complete
- She must provide another set of disclosures, showing final costs and expenses
, - She must record the transaction with the county recorder
- correct answer None; Leilani's tasks are complete
In order for a small creditor to originate a balloon payment qualified mortgage, the small creditor must
hold the loan in its portfolio for:
- Twelve months
- Three years
- Two years
- Five years
- correct answer Three years
Mortgage loan originator Trevor Tibbs has accepted a loan application for a dwelling that is a mobile
home not permanently affixed to the land. Does this mobile home meet the requirements necessary for
it to be considered security for a residential mortgage loan?
- Yes, a dwelling includes a structure whether or not that structure is attached to real property
- No, dwellings must be permanently attached to real property
- No, mobile homes are classified as personal property, not real property
- Yes, as long as the real property upon which the mobile home will be located is in the borrower's
name, the loan may be a residential mortgage loan
- correct answer Yes, a dwelling includes a structure whether or not that structure is attached to real
property
UFMIP is paid:
- in full when the loan reaches maturity.
- at the end of each year of the loan term.
- in full at the time of closing.
- at the end of each month.
- correct answer in full at the time of closing.
solutions 2024\2025
The preferred debt-to-income ratio for applicants for VA loans is:
- 35%
- 43%
- 50%
- 41%
- correct answer 41%
When would a license be suspended without a hearing?
- If a licensee fails to renew
- If a licensee fails to request a hearing with the state regulator
- If a licensee has failed to complete pre-licensing requirements
- If a licensee has already executed a right to a hearing for a previous violation
- correct answer If a licensee fails to request a hearing with the state regulator
After a borrower allows the assumption of his or her VA loan, he or she may use his or her VA privilege
again only after:
- Five years have passed
- The home is sold to a new owner
- The original VA loan is satisfied
- The original VA loan is moved from his or her name into the name of the assuming borrower
- correct answer The original VA loan is satisfied
,During initial application for a license, loan originators must make disclosure of all of the following,
except:
- Regulatory history
- Criminal history
- Civil and administrative records
- Three-year history of loan production
- correct answer Three-year history of loan production
In order to qualify for an adjustable-rate mortgage, a consumer must be able to show that he or she can:
- Make regularly scheduled payments that are calculated using the loan's introductory rate
- Make amortizing payments that are calculated using the fully indexed rate for the ARM
- Make amortizing payments that are calculated using the loan's rate after the first interest rate
adjustment occurs
- Make regularly scheduled payments that are calculated using the fixed interest rate for which the
consumer would be eligible
- correct answer Make amortizing payments that are calculated using the fully indexed rate for the ARM
Wilbur Green is applying for a loan originator license. His credit report indicates that he has a number of
judgments filed against him, all related to a serious medical condition his wife suffered four years prior.
Will Wilbur be denied a license because of the judgments?
- Yes, current outstanding judgments show a lack of financial responsibility
- Yes, because they indicate a pattern of seriously delinquent accounts within the past three years
- No, because the judgments are a result of medical expenses, they will not be held against him
- The judgments will not be held against him because they were entered more than three years ago
- correct answer No, because the judgments are a result of medical expenses, they will not be held
against him
The most commonly used type of reverse mortgage is known as a:
,- Proprietary loan
- Home equity conversion mortgage
- Single-purpose conforming mortgage
- Interest-only loan
- correct answer Home equity conversion mortgage
What legislation was enacted because of anecdotal evidence that women were not treated on an equal
basis with men in credit markets, particularly in mortgage credit markets?
- HOEPA
- FACTA
- ECOA
- Fair Housing Act
- correct answer ECOA
Money paid by a buyer to a seller at the time of entering into a contract to indicate intent and ability to
carry out the contract is called:
- Down payment
- Earnest money
- Escrow funds
- Service release premium
- correct answer Earnest money
The Pois have just closed on their mortgage loan at a formal settlement meeting. What is mortgage loan
originator Leilani's responsibility after loan closing?
- She must provide any required re-disclosures
- None; Leilani's tasks are complete
- She must provide another set of disclosures, showing final costs and expenses
, - She must record the transaction with the county recorder
- correct answer None; Leilani's tasks are complete
In order for a small creditor to originate a balloon payment qualified mortgage, the small creditor must
hold the loan in its portfolio for:
- Twelve months
- Three years
- Two years
- Five years
- correct answer Three years
Mortgage loan originator Trevor Tibbs has accepted a loan application for a dwelling that is a mobile
home not permanently affixed to the land. Does this mobile home meet the requirements necessary for
it to be considered security for a residential mortgage loan?
- Yes, a dwelling includes a structure whether or not that structure is attached to real property
- No, dwellings must be permanently attached to real property
- No, mobile homes are classified as personal property, not real property
- Yes, as long as the real property upon which the mobile home will be located is in the borrower's
name, the loan may be a residential mortgage loan
- correct answer Yes, a dwelling includes a structure whether or not that structure is attached to real
property
UFMIP is paid:
- in full when the loan reaches maturity.
- at the end of each year of the loan term.
- in full at the time of closing.
- at the end of each month.
- correct answer in full at the time of closing.
