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A borrower received $1,000 per month in rental income. How much of the income may be used to
qualify the borrower for a loan?
A. $1,000
B. $800
C. $750
D. $1,250 - (answer)C. $750
Generally, 75% of rental income may be used to qualify a borrower for a loan. This formula is based on
an industry standard that taxes, insurance, and maintenance costs will equal about 25% of the income
that a property generates. In this case, 75% x $1,000 = $750.
What is Freddie Mac's automated underwriting system called?
A. Desktop Originator
B. Underwriter Assistant
C. Loan Product Advisor
D. AUS - (answer)C. Loan Product Advisor
Freddie Mac's automated underwriting system is called Loan Product Advisor (formerly known as Loan
Prospector), while Fannie Mae's is called Desktop Underwriter.
Which of the following contains only items which should be used in calculating a borrower's debt-to-
income ratio?
A. Monthly rent expense on current home, credit card payment, car insurance
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B. Car payment, boat payment, child support obligations
C. Property tax payment, utility payment, cable bill
D. Mortgage insurance payment, average grocery costs, electric bill - (answer)B. Car payment, boat
payment, child support obligations
A debt-to-income ratio compares an applicant's total monthly debt to his or her total monthly income.
Total monthly debt would include simultaneous loans, debt obligations, alimony, and child support.
Typical living expenses (e.g., utilities, health and disability insurance, food, phone or cable bills, etc.) are
not included when calculating DTI.
Which of the following would NOT be required if a mortgage company wishes to utilize electronic
signatures on required disclosures?
A. Borrowers must be given the option to receive the disclosures in paper form
B. Borrowers must be able to withdraw their consent to receive the disclosures electronically
C. The company must record the IP address from which the documents were accessed
D. The company must disclose hardware and software requirements to borrowers - (answer)C. The
company must record the IP address from which the documents were accessed
Under the Electronic Signatures in Global and National Commerce Act (the E-SIGN Act), before obtaining
a consumer's consent, a financial institution must provide a clear and conspicuous statement to
consumers, informing them of their right or option to have the record provided or made available on
paper or in a non-electronic form. The statement must also explain the consumer's right to withdraw
consent, including applicable conditions, consequences, and fees. Consumers must also be provided with
information about the hardware and software required to allow them to access and retain the electronic
records.
Under the S.A.F.E. Act, a licensed loan originator's responsibilities with regard to recordkeeping include
all of the following, except:
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A. Not knowingly withholding, removing, or destroying any books or records
B. Making all of the licensee's records available to borrowers upon demand
C. Permitting interviews of principals, loan originators, and independent contractors by state regulators
D. Making records and books available to the state regulator - (answer)B. Making all of the licensee's
records available to borrowers upon demand
Licensed loan originators and those required to be licensed must make records and books available to
their state regulator and permit interviews of officers, principals, employees, independent contractors,
agents and customers. They may not knowingly withhold, abstract, remove, mutilate, destroy, or secrete
any books, records, or other information during an investigation or examination. Loan originators are not
required to make all of their records available to borrowers upon demand.
Which of the following federal regulations prohibits discrimination based on race, color, religion, sex,
marital status, or national origin in a credit transaction?
A. Regulation C
B. Regulation B
C. Regulation Z
D. Regulation G - (answer)B. Regulation B
Regulation B implements the provisions of the Equal Credit Opportunity Act (ECOA), which ensures that
all persons, consumers, and businesses are given an equal chance to obtain credit by prohibiting
discrimination based on criteria including race, color, religion, national origin, sex, marital status, and age
(provided the individual is of age to enter into a contract).
According to the standard deed of trust, how soon must a borrower on an owner-occupied loan occupy
the property?
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A. Within 30 days of closing
B. Within 90 days of closing
C. Within 60 days of closing
D. Within 15 days of closing - (answer)C. Within 60 days of closing
Under most deed of trust, including most FHA and VA loans, a borrower who intends to occupy the
property as his/her residence must move in within 60 days after closing.
Which of the following would convey a property?
A. Deed rider
B. Warranty deed
C. Note
D. Deed of trust - (answer)B. Warranty deed
A warranty deed conveys full ownership of land, and is commonly used in purchase and sales
transactions of real estate. In addition to conveying property ownership, a warranty deed contains the
promise of clear title, meaning the property is free of encumbrances.
With respect to FHA loans, the FHA:
A. Guarantees the loans, thereby protecting the lender
B. Acts as the lender
C. Issues private mortgage insurance
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A borrower received $1,000 per month in rental income. How much of the income may be used to
qualify the borrower for a loan?
A. $1,000
B. $800
C. $750
D. $1,250 - (answer)C. $750
Generally, 75% of rental income may be used to qualify a borrower for a loan. This formula is based on
an industry standard that taxes, insurance, and maintenance costs will equal about 25% of the income
that a property generates. In this case, 75% x $1,000 = $750.
What is Freddie Mac's automated underwriting system called?
A. Desktop Originator
B. Underwriter Assistant
C. Loan Product Advisor
D. AUS - (answer)C. Loan Product Advisor
Freddie Mac's automated underwriting system is called Loan Product Advisor (formerly known as Loan
Prospector), while Fannie Mae's is called Desktop Underwriter.
Which of the following contains only items which should be used in calculating a borrower's debt-to-
income ratio?
A. Monthly rent expense on current home, credit card payment, car insurance
,National and UST Mortgage Practice Exam 1 2026 Update|Complete
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Already Passed A+
B. Car payment, boat payment, child support obligations
C. Property tax payment, utility payment, cable bill
D. Mortgage insurance payment, average grocery costs, electric bill - (answer)B. Car payment, boat
payment, child support obligations
A debt-to-income ratio compares an applicant's total monthly debt to his or her total monthly income.
Total monthly debt would include simultaneous loans, debt obligations, alimony, and child support.
Typical living expenses (e.g., utilities, health and disability insurance, food, phone or cable bills, etc.) are
not included when calculating DTI.
Which of the following would NOT be required if a mortgage company wishes to utilize electronic
signatures on required disclosures?
A. Borrowers must be given the option to receive the disclosures in paper form
B. Borrowers must be able to withdraw their consent to receive the disclosures electronically
C. The company must record the IP address from which the documents were accessed
D. The company must disclose hardware and software requirements to borrowers - (answer)C. The
company must record the IP address from which the documents were accessed
Under the Electronic Signatures in Global and National Commerce Act (the E-SIGN Act), before obtaining
a consumer's consent, a financial institution must provide a clear and conspicuous statement to
consumers, informing them of their right or option to have the record provided or made available on
paper or in a non-electronic form. The statement must also explain the consumer's right to withdraw
consent, including applicable conditions, consequences, and fees. Consumers must also be provided with
information about the hardware and software required to allow them to access and retain the electronic
records.
Under the S.A.F.E. Act, a licensed loan originator's responsibilities with regard to recordkeeping include
all of the following, except:
,National and UST Mortgage Practice Exam 1 2026 Update|Complete
Exam Set Questions And Verified Answers | Get It 100% Accurate!!|
Already Passed A+
A. Not knowingly withholding, removing, or destroying any books or records
B. Making all of the licensee's records available to borrowers upon demand
C. Permitting interviews of principals, loan originators, and independent contractors by state regulators
D. Making records and books available to the state regulator - (answer)B. Making all of the licensee's
records available to borrowers upon demand
Licensed loan originators and those required to be licensed must make records and books available to
their state regulator and permit interviews of officers, principals, employees, independent contractors,
agents and customers. They may not knowingly withhold, abstract, remove, mutilate, destroy, or secrete
any books, records, or other information during an investigation or examination. Loan originators are not
required to make all of their records available to borrowers upon demand.
Which of the following federal regulations prohibits discrimination based on race, color, religion, sex,
marital status, or national origin in a credit transaction?
A. Regulation C
B. Regulation B
C. Regulation Z
D. Regulation G - (answer)B. Regulation B
Regulation B implements the provisions of the Equal Credit Opportunity Act (ECOA), which ensures that
all persons, consumers, and businesses are given an equal chance to obtain credit by prohibiting
discrimination based on criteria including race, color, religion, national origin, sex, marital status, and age
(provided the individual is of age to enter into a contract).
According to the standard deed of trust, how soon must a borrower on an owner-occupied loan occupy
the property?
, National and UST Mortgage Practice Exam 1 2026 Update|Complete
Exam Set Questions And Verified Answers | Get It 100% Accurate!!|
Already Passed A+
A. Within 30 days of closing
B. Within 90 days of closing
C. Within 60 days of closing
D. Within 15 days of closing - (answer)C. Within 60 days of closing
Under most deed of trust, including most FHA and VA loans, a borrower who intends to occupy the
property as his/her residence must move in within 60 days after closing.
Which of the following would convey a property?
A. Deed rider
B. Warranty deed
C. Note
D. Deed of trust - (answer)B. Warranty deed
A warranty deed conveys full ownership of land, and is commonly used in purchase and sales
transactions of real estate. In addition to conveying property ownership, a warranty deed contains the
promise of clear title, meaning the property is free of encumbrances.
With respect to FHA loans, the FHA:
A. Guarantees the loans, thereby protecting the lender
B. Acts as the lender
C. Issues private mortgage insurance
