MLO SAFE NMLS SAFE TEST
PRACTICE QUESTIONS
WITH CORRECT ANSWERS
QUESTIONPer the Dodd-Frank Acvt, to be a "qualified mortgage"
total points and fees may not exceed ________% of the total loan
amount. - answer-3% (three percent)
QUESTIONPer a provision of the Dodd-Frank Act mortgage
lenders are to determine that a borrower has a reasonable ability
to repay a loan. Does this provision apply to all loans or just
owner occupied loans? - answer-All loans, whether owner
occupied or not.
QUESTIONA loan subject to HOEPA allows prepayment
penalties for the first ______ years of the loan. - answer-2 (two)
years
QUESTIONPer the Dodd-Frank Act an abusive act would include
which of the following:
1. One that materially interferes with the consumers ability to
understand the product or service.
2. One that take unreasonable advantage of a consumers' lack of
understanding.
3. One that takes unreasonable advantage of the consumer's
reasonable reliance on the MLO. - answer-All three would be
considered abusive acts.
,Taking advantage of ill-informed consumers through excessively
high fees, misrepresented loan terms, frequent refinancing that
does not benefit the borrower and other prohibited acts is called
__________________________. - answer-Predatory Lending.
QUESTIONRESPA-Real Estate Settlement Procedures Act -
answer-The Federal Statute that deals with the settlement of
residential mortgage loans.
QUESTIONRESPA's section 9 Prohibits - answer-Home sellers
from requiring home buyers to purchase title insurance from a
particular company providing title services.
QUESTIONThe Dodd-Frank Act modifies ECOA to require a
creditor to furnish a copy of an appraisal developed in connection
with a first mortgage_____________________ and absolutely not
later than ________ business days prior to closing. - answer-upon
completion and 3 business days
QUESTIONTIL (Truth In Lending Disclosure) & GFE (Good Faith
Estimate) - answer-Per the Dodd Frank Act, a single disclosure
form combines these 2 statements.
QUESTIONPer the Dodd-Frank Act if an MLO receives
compensation directly from a consumer, up to how much
additional compensation may be received from a lender in the
same transaction? - answer-$0.00, dual compensation is not
allowed. Compensation must be borrower paid or lender paid.
QUESTIONWhat kinds of reasons are necessary for a lender to
take adverse action with regard to a borrower? - answer-Specific
reasons.
,QUESTIONAdverse action means ______________________. -
answer-A denial or revocation of credit. Also, a change in the
terms of an existing credit arrangement or a refusal to grant credit
in substantially the amount or terms requested.
QUESTIONPer Regulation B, Lenders should retain certain
records for _____________ months. - answer-25 Months
QUESTIONBecause of the impact of the Dodd-Frank Act on a
second mortgage, an APR that exceeds the ________ by more
than _____% is the trigger that defines a high cost loan. - answer-
APOR ( Average Prime Offer Rate), 8.5%
QUESTIONFNMA conforming debt ratios equal
______/________. - answer-28%, maximum housing
expense/36% maximum total obligations
QUESTIONHOEPA stands for ___________________________.
- answer-Home Ownership and Equity Protection Act.
QUESTIONRESPA applies to what type of properties? - answer-
1-4 Unit Residential Properties
QUESTIONOn a conventional mortgage loan, who makes the
final decision regarding approval, denial or counter offer? -
answer-The Underwriter
QUESTIONThe Civil Rights Act of 1866, prohibited public and
private racial discrimination in any property transaction and was
expanded in 1968 in which act? - answer-The Civil Rights Act of
1968, also known as Title VIII of the Civil Rights Act , Also known
as Title VIII, Also Known as The Fair Housing Act
, QUESTIONOf the following, which is not required to be disclosed
on the TIL statement? The (1) APR, (2) Note Rate, (3) Finance
Charge, (4) Amount Financed or (5) Total of Payments - answer-
The note rate is NOT required.
QUESTIONWhich act of 1968 provides guidelines and restrictions
regarding the financing, selling and renting of real property? -
answer-The Civil Rights Act of 1968. AKA, The Civil Rights Act,
AKA Title VIII, AKA The Fair Housing Act
QUESTIONWhich act prohibits asking questions regarding child
bearing intentions or birth control practices? - answer-
ECOA/Regulation B, the Equal Credit Opportunity Act
QUESTIONBased on objective criteria regarding the condition
and value of the property or area, may a lender deny loans in
neighborhoods where property values are declining? - answer-
YES, loans can be denied in a geographic area, but not for
discriminatory reasons relative to the population of the area.
QUESTIONA teaser rate occurs in an ARM when the starting rate
is less than the _____________. - answer-Fully indexed rate.
QUESTIONPer ECOA, is it true that while a lender must consider
reliable alimony, child support or separate maintenance payments
as income, the applicant is not required to disclose such income?
- answer-Yes, it is true. Only income intended to be used for
qualifying has to be disclosed and verified.
QUESTIONOf the following, who make a flood zone
determination?
1. The Lender
2. The Appraiser
3. The Surveyor
PRACTICE QUESTIONS
WITH CORRECT ANSWERS
QUESTIONPer the Dodd-Frank Acvt, to be a "qualified mortgage"
total points and fees may not exceed ________% of the total loan
amount. - answer-3% (three percent)
QUESTIONPer a provision of the Dodd-Frank Act mortgage
lenders are to determine that a borrower has a reasonable ability
to repay a loan. Does this provision apply to all loans or just
owner occupied loans? - answer-All loans, whether owner
occupied or not.
QUESTIONA loan subject to HOEPA allows prepayment
penalties for the first ______ years of the loan. - answer-2 (two)
years
QUESTIONPer the Dodd-Frank Act an abusive act would include
which of the following:
1. One that materially interferes with the consumers ability to
understand the product or service.
2. One that take unreasonable advantage of a consumers' lack of
understanding.
3. One that takes unreasonable advantage of the consumer's
reasonable reliance on the MLO. - answer-All three would be
considered abusive acts.
,Taking advantage of ill-informed consumers through excessively
high fees, misrepresented loan terms, frequent refinancing that
does not benefit the borrower and other prohibited acts is called
__________________________. - answer-Predatory Lending.
QUESTIONRESPA-Real Estate Settlement Procedures Act -
answer-The Federal Statute that deals with the settlement of
residential mortgage loans.
QUESTIONRESPA's section 9 Prohibits - answer-Home sellers
from requiring home buyers to purchase title insurance from a
particular company providing title services.
QUESTIONThe Dodd-Frank Act modifies ECOA to require a
creditor to furnish a copy of an appraisal developed in connection
with a first mortgage_____________________ and absolutely not
later than ________ business days prior to closing. - answer-upon
completion and 3 business days
QUESTIONTIL (Truth In Lending Disclosure) & GFE (Good Faith
Estimate) - answer-Per the Dodd Frank Act, a single disclosure
form combines these 2 statements.
QUESTIONPer the Dodd-Frank Act if an MLO receives
compensation directly from a consumer, up to how much
additional compensation may be received from a lender in the
same transaction? - answer-$0.00, dual compensation is not
allowed. Compensation must be borrower paid or lender paid.
QUESTIONWhat kinds of reasons are necessary for a lender to
take adverse action with regard to a borrower? - answer-Specific
reasons.
,QUESTIONAdverse action means ______________________. -
answer-A denial or revocation of credit. Also, a change in the
terms of an existing credit arrangement or a refusal to grant credit
in substantially the amount or terms requested.
QUESTIONPer Regulation B, Lenders should retain certain
records for _____________ months. - answer-25 Months
QUESTIONBecause of the impact of the Dodd-Frank Act on a
second mortgage, an APR that exceeds the ________ by more
than _____% is the trigger that defines a high cost loan. - answer-
APOR ( Average Prime Offer Rate), 8.5%
QUESTIONFNMA conforming debt ratios equal
______/________. - answer-28%, maximum housing
expense/36% maximum total obligations
QUESTIONHOEPA stands for ___________________________.
- answer-Home Ownership and Equity Protection Act.
QUESTIONRESPA applies to what type of properties? - answer-
1-4 Unit Residential Properties
QUESTIONOn a conventional mortgage loan, who makes the
final decision regarding approval, denial or counter offer? -
answer-The Underwriter
QUESTIONThe Civil Rights Act of 1866, prohibited public and
private racial discrimination in any property transaction and was
expanded in 1968 in which act? - answer-The Civil Rights Act of
1968, also known as Title VIII of the Civil Rights Act , Also known
as Title VIII, Also Known as The Fair Housing Act
, QUESTIONOf the following, which is not required to be disclosed
on the TIL statement? The (1) APR, (2) Note Rate, (3) Finance
Charge, (4) Amount Financed or (5) Total of Payments - answer-
The note rate is NOT required.
QUESTIONWhich act of 1968 provides guidelines and restrictions
regarding the financing, selling and renting of real property? -
answer-The Civil Rights Act of 1968. AKA, The Civil Rights Act,
AKA Title VIII, AKA The Fair Housing Act
QUESTIONWhich act prohibits asking questions regarding child
bearing intentions or birth control practices? - answer-
ECOA/Regulation B, the Equal Credit Opportunity Act
QUESTIONBased on objective criteria regarding the condition
and value of the property or area, may a lender deny loans in
neighborhoods where property values are declining? - answer-
YES, loans can be denied in a geographic area, but not for
discriminatory reasons relative to the population of the area.
QUESTIONA teaser rate occurs in an ARM when the starting rate
is less than the _____________. - answer-Fully indexed rate.
QUESTIONPer ECOA, is it true that while a lender must consider
reliable alimony, child support or separate maintenance payments
as income, the applicant is not required to disclose such income?
- answer-Yes, it is true. Only income intended to be used for
qualifying has to be disclosed and verified.
QUESTIONOf the following, who make a flood zone
determination?
1. The Lender
2. The Appraiser
3. The Surveyor
