NMLS MLO Exam Questions and Answers
1.What must a borrower do to avoid having late payments reported to a
credit bureau?
Answer Pay within 30 days of due date
2.Max penalty if a borrower is required to use a specific title company
or settlement agent?
Answer 3 times the fee
3.What should not be over-weighted in an analysis of borrower
repayment capacity?
Answer Credit scores
4.Max prepayment penalty on residential mortgages in the first year of
the loan
Answer 3%
5.What must condominium associations do with respect to property
insur- ance?
Answer Keep a "blanket" policy that protects the entire structure
6.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?
,Answer Before the referral to the title company is made
7.Website to obtain copy of your credit report that the credit bureaus
are required to provide once per year at no charge
Answer annualcreditreport.com
8.2/3/6 caps
Answer ARM initial adjustment max is 2%, subsequent adjustment
period max is 3%, and lifetime cap of 6%
9.What does FHLB stand for and what do they provide?
Answer Federal Home Loan Bank, and they provide advances to
financial institutions for residential mortgage loans
10.According to the Dodd-Frank Act, how much risk must be retained by
the securitizer for a loan that does not meet QRM guidelines?
Answer 5%
11.On a purchase transaction, what document contains the purchase price
for a property?
Answer Sales Contract
12.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?
Answer 60 days after closing
13.Overt Discrimination
Answer Refusing service to anyone of a certain race, ethnicity, etc.
14.Under ECOA can you ask how many children a borrower has?
Answer No
15.What document specifies that a property is being used as security in the
event of nonpayment of a debt?
Answer Mortgage
16.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?
Answer TIP (Total Interest Percentage)
17.COFI comes from what region in the country?
Answer The 11th Federal Home Loan Bank (Arizona, California, and
Nevada)
18.What disclosure is required to be provided to the applicant within 3
days of application under reg x?
Answer Mortgage Loan Servicing Disclosure
, 19.Verification of cash used in a closing is documented by
Answer
last 2-3 months bank statements
20.The finance charge is the total cost of
Answer
the loan in dollars, including points and mortgage insurance
21.What IRS forms would you requrest from a borrower who is 40%
share- holder in a C-Corporation?
Answer Form 1120
22.Impersonating someone else in an attempt to obtain their personal
finan- cial information is called
Answer
Pretexting
23.What type of funding occurs when a lender obtains funds from a line
of credit at a commercial bank?
Answer Warehouse funding
24.Late fee for FHA and VA loans
Answer 4%
25.Ginnie Mae loans
1.What must a borrower do to avoid having late payments reported to a
credit bureau?
Answer Pay within 30 days of due date
2.Max penalty if a borrower is required to use a specific title company
or settlement agent?
Answer 3 times the fee
3.What should not be over-weighted in an analysis of borrower
repayment capacity?
Answer Credit scores
4.Max prepayment penalty on residential mortgages in the first year of
the loan
Answer 3%
5.What must condominium associations do with respect to property
insur- ance?
Answer Keep a "blanket" policy that protects the entire structure
6.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?
,Answer Before the referral to the title company is made
7.Website to obtain copy of your credit report that the credit bureaus
are required to provide once per year at no charge
Answer annualcreditreport.com
8.2/3/6 caps
Answer ARM initial adjustment max is 2%, subsequent adjustment
period max is 3%, and lifetime cap of 6%
9.What does FHLB stand for and what do they provide?
Answer Federal Home Loan Bank, and they provide advances to
financial institutions for residential mortgage loans
10.According to the Dodd-Frank Act, how much risk must be retained by
the securitizer for a loan that does not meet QRM guidelines?
Answer 5%
11.On a purchase transaction, what document contains the purchase price
for a property?
Answer Sales Contract
12.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?
Answer 60 days after closing
13.Overt Discrimination
Answer Refusing service to anyone of a certain race, ethnicity, etc.
14.Under ECOA can you ask how many children a borrower has?
Answer No
15.What document specifies that a property is being used as security in the
event of nonpayment of a debt?
Answer Mortgage
16.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?
Answer TIP (Total Interest Percentage)
17.COFI comes from what region in the country?
Answer The 11th Federal Home Loan Bank (Arizona, California, and
Nevada)
18.What disclosure is required to be provided to the applicant within 3
days of application under reg x?
Answer Mortgage Loan Servicing Disclosure
, 19.Verification of cash used in a closing is documented by
Answer
last 2-3 months bank statements
20.The finance charge is the total cost of
Answer
the loan in dollars, including points and mortgage insurance
21.What IRS forms would you requrest from a borrower who is 40%
share- holder in a C-Corporation?
Answer Form 1120
22.Impersonating someone else in an attempt to obtain their personal
finan- cial information is called
Answer
Pretexting
23.What type of funding occurs when a lender obtains funds from a line
of credit at a commercial bank?
Answer Warehouse funding
24.Late fee for FHA and VA loans
Answer 4%
25.Ginnie Mae loans
