MLO SAFE NMLS EXAM PREP STUDY GUIDE
SUMMARY ACTUAL EXAM SOLVED
QUESTIONS VERIFIED ANSWERS GRADED A
PLUS REVISED EDITION
◉Max penalty if a borrower is required to use a specific title company
or settlement agent? Answer: 3 times the fee
◉What should not be over-weighted in an analysis of borrower
repayment capacity? Answer: Credit scores
◉Max prepayment penalty on residential mortgages in the first year of
the loan Answer: 3%
◉What must condominium associations do with respect to property
insurance? Answer: 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? Answer: 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 Answer:
annualcreditreport.com
◉2/3/6 caps Answer: 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? Answer:
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? Answer:
5%
◉On a purchase transaction, what document contains the purchase price
for a property? Answer: 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? Answer: 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? Answer:
5%
◉Overt Discrimination Answer: Refusing service to anyone of a certain
race, ethnicity, etc.
◉Under ECOA can you ask how many children a borrower has?
Answer: No
◉What document specifies that a property is being used as security in
the event of nonpayment of a debt? Answer: 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?
Answer: TIP (Total Interest Percentage)
◉COFI comes from what region in the country? Answer: 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? Answer: Mortgage Loan Servicing
Disclosure
, ◉Verification of cash used in a closing is documented by: Answer: last
2-3 months bank statements
◉The finance charge is the total cost of: Answer: 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? Answer: Form 1120
◉Impersonating someone else in an attempt to obtain their personal
financial information is called: Answer: Pretexting
◉What type of funding occurs when a lender obtains funds from a line
of credit at a commercial bank? Answer: Warehouse funding
◉Late fee for FHA and VA loans Answer: 4%
◉Ginnie Mae _____ loans Answer: Guarantees
◉A mortgage on personal property is: Answer: Chattel mortgage
◉Who can transfer title insurance policy? Answer: Mortgagee
SUMMARY ACTUAL EXAM SOLVED
QUESTIONS VERIFIED ANSWERS GRADED A
PLUS REVISED EDITION
◉Max penalty if a borrower is required to use a specific title company
or settlement agent? Answer: 3 times the fee
◉What should not be over-weighted in an analysis of borrower
repayment capacity? Answer: Credit scores
◉Max prepayment penalty on residential mortgages in the first year of
the loan Answer: 3%
◉What must condominium associations do with respect to property
insurance? Answer: 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? Answer: 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 Answer:
annualcreditreport.com
◉2/3/6 caps Answer: 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? Answer:
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? Answer:
5%
◉On a purchase transaction, what document contains the purchase price
for a property? Answer: 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? Answer: 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? Answer:
5%
◉Overt Discrimination Answer: Refusing service to anyone of a certain
race, ethnicity, etc.
◉Under ECOA can you ask how many children a borrower has?
Answer: No
◉What document specifies that a property is being used as security in
the event of nonpayment of a debt? Answer: 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?
Answer: TIP (Total Interest Percentage)
◉COFI comes from what region in the country? Answer: 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? Answer: Mortgage Loan Servicing
Disclosure
, ◉Verification of cash used in a closing is documented by: Answer: last
2-3 months bank statements
◉The finance charge is the total cost of: Answer: 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? Answer: Form 1120
◉Impersonating someone else in an attempt to obtain their personal
financial information is called: Answer: Pretexting
◉What type of funding occurs when a lender obtains funds from a line
of credit at a commercial bank? Answer: Warehouse funding
◉Late fee for FHA and VA loans Answer: 4%
◉Ginnie Mae _____ loans Answer: Guarantees
◉A mortgage on personal property is: Answer: Chattel mortgage
◉Who can transfer title insurance policy? Answer: Mortgagee
