NMLS MLO EXAM UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

NMLS MLO EXAM UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS

Question:
1. What must a borrower do to avoid having late payments reported to a credit bureau?
Answer:
Pay within 30 days of due date

Question:
2. Max penalty if a borrower is required to use a specific title company or settlement agent?
Answer:
3 times the fee

Question:
3. What should not be over-weighted in an analysis of borrower repayment capacity?
Answer:
Credit scores

Question:
4. Max prepayment penalty on residential mortgages in the first year of the loan
Answer:
3%

Question:
5. What must condominium associations do with respect to property insurance?
Answer:
Keep a "blanket" policy that protects the entire structure

Question:
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

Question:
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

Question:
8. 2/3/6 caps
Answer:
ARM initial adjustment max is 2%, subsequent adjustment period max is 3%, and lifetime cap of 6%

,Question:
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

Question:
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%

Question:
11. On a purchase transaction, what document contains the purchase price for a property?
Answer:
Sales Contract

Question:
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

Question:
13. Overt Discrimination
Answer:
Refusing service to anyone of a certain race, ethnicity, etc.

Question:
14. Under ECOA can you ask how many children a borrower has?
Answer:
No

Question:
15. What document specifies that a property is being used as security in the event of nonpayment of a
debt?
Answer:
Mortgage

Question:
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)

, Question:
17. COFI comes from what region in the country?
Answer:
The 11th Federal Home Loan Bank (Arizona, California, and Nevada)

Question:
18. What disclosure is required to be provided to the applicant within 3 days of application under reg x?
Answer:
Mortgage Loan Servicing Disclosure

Question:
19. Verification of cash used in a closing is documented by:
Answer:
last 2-3 months bank statements

Question:
20. The finance charge is the total cost of:
Answer:
the loan in dollars, including points and mortgage insurance

Question:
21. What IRS forms would you requrest from a borrower who is 40% shareholder in a C-Corporation?
Answer:
Form 1120

Question:
22. Impersonating someone else in an attempt to obtain their personal financial information is called:
Answer:
Pretexting

Question:
23. What type of funding occurs when a lender obtains funds from a line of credit at a commercial bank?
Answer:
Warehouse funding

Question:
24. Late fee for FHA and VA loans
Answer:
4%

Question:
25. Ginnie Mae _____ loans
Answer:
Guarantees