NMLS MLO Exam Review Questions with
100% Correct Answers
What must a borrower do to avoid having late payments reported to a credit bureau?
Pay within 30 days of due date
Max penalty if a borrower is required to use a specific title company or settlement
agent?
3 times the fee
What should not be over-weighted in an analysis of borrower repayment capacity?
Credit scores
Max prepayment penalty on residential mortgages in the first year of the loan
3%
What must condominium associations do with respect to property insurance?
Keep a "blanket" policy that protects the entire structure
If a lender is planning on referring a borrower to a title company that the lender has
ownership in, when must the AFBA must be provided to the borrower?
Before the referral to the title company is made
Website to obtain copy of your credit report that the credit bureaus are required to
provide once per year at no charge
annualcreditreport.com
2/3/6 caps
,ARM initial adjustment max is 2%, subsequent adjustment period max is 3%, and lifetime
cap of 6%
What does FHLB stand for and what do they provide?
Federal Home Loan Bank, and they provide advances to financial institutions for residential
mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by the securitizer
for a loan that does not meet QRM guidelines?
5%
On a purchase transaction, what document contains the purchase price for a property?
Sales Contract
After a loan has been closed and funded, the creditor notices a tolerance violation with a
fee between the LE and CD. How long does the creditor have to reimburse the borrower
for the overcharge before being considered in violation of the TRID rule?
60 days after closing
According to the Dodd-Frank Act, how much risk must be retained by the securitizer
for a loan that does not meet QRM guidelines?
5%
Overt Discrimination
Refusing service to anyone of a certain race, ethnicity, etc.
Under ECOA can you ask how many children a borrower has?
No
, What document specifies that a property is being used as security in the event of
nonpayment of a debt?
Mortgage
On the LE, which piece of data tells applicants how much they will be paying in interest
over the life of the loan as a percentage of the loan?
TIP (Total Interest Percentage)
COFI comes from what region in the country?
The 11th Federal Home Loan Bank (Arizona, California, and Nevada)
What disclosure is required to be provided to the applicant within 3 days of application
under reg x?
Mortgage Loan Servicing Disclosure
Verification of cash used in a closing is documented by:
last 2-3 months bank statements
The finance charge is the total cost of:
the loan in dollars, including points and mortgage insurance
What IRS forms would you requrest from a borrower who is 40% shareholder in a C-
Corporation?
Form 1120
Impersonating someone else in an attempt to obtain their personal financial information
is called:
Pretexting
100% Correct Answers
What must a borrower do to avoid having late payments reported to a credit bureau?
Pay within 30 days of due date
Max penalty if a borrower is required to use a specific title company or settlement
agent?
3 times the fee
What should not be over-weighted in an analysis of borrower repayment capacity?
Credit scores
Max prepayment penalty on residential mortgages in the first year of the loan
3%
What must condominium associations do with respect to property insurance?
Keep a "blanket" policy that protects the entire structure
If a lender is planning on referring a borrower to a title company that the lender has
ownership in, when must the AFBA must be provided to the borrower?
Before the referral to the title company is made
Website to obtain copy of your credit report that the credit bureaus are required to
provide once per year at no charge
annualcreditreport.com
2/3/6 caps
,ARM initial adjustment max is 2%, subsequent adjustment period max is 3%, and lifetime
cap of 6%
What does FHLB stand for and what do they provide?
Federal Home Loan Bank, and they provide advances to financial institutions for residential
mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by the securitizer
for a loan that does not meet QRM guidelines?
5%
On a purchase transaction, what document contains the purchase price for a property?
Sales Contract
After a loan has been closed and funded, the creditor notices a tolerance violation with a
fee between the LE and CD. How long does the creditor have to reimburse the borrower
for the overcharge before being considered in violation of the TRID rule?
60 days after closing
According to the Dodd-Frank Act, how much risk must be retained by the securitizer
for a loan that does not meet QRM guidelines?
5%
Overt Discrimination
Refusing service to anyone of a certain race, ethnicity, etc.
Under ECOA can you ask how many children a borrower has?
No
, What document specifies that a property is being used as security in the event of
nonpayment of a debt?
Mortgage
On the LE, which piece of data tells applicants how much they will be paying in interest
over the life of the loan as a percentage of the loan?
TIP (Total Interest Percentage)
COFI comes from what region in the country?
The 11th Federal Home Loan Bank (Arizona, California, and Nevada)
What disclosure is required to be provided to the applicant within 3 days of application
under reg x?
Mortgage Loan Servicing Disclosure
Verification of cash used in a closing is documented by:
last 2-3 months bank statements
The finance charge is the total cost of:
the loan in dollars, including points and mortgage insurance
What IRS forms would you requrest from a borrower who is 40% shareholder in a C-
Corporation?
Form 1120
Impersonating someone else in an attempt to obtain their personal financial information
is called:
Pretexting
