MLO Practice Test questions with correct answers

An Approve/Eligible determination: 1. Is an indication that a property appraised for its sales price 2. Authorization to release funds in a refinance transaction 3. An automated loan approval from the Fannie Mae Du system 4. A recommendation that is received by the Freddie Mac loan prospector automated underwriting system. Answer 3. An automated loan approval from the Fannie Mae Du system.. this means that the borrower meets the credit requirements and all other loan factors are acceptable. The LP recommendations are mostly one word answers and the equivalent recommendation under LP would be Accept. If a lender agrees to subordinate a loan, what has occurred? 1. The borrower has a first and second and has refinanced the first. 2. The loan has been denied 3. The second has been paid off 4. The borrower is in foreclosure Answer 1. The borrower has a first and second and has refinanced the first...when the borrowed refinanced a first and there is an existing second the second becomes the first when the old loan is paid off. To avoid this from happening the second position lender will subordinate and remain in second position. Which of the following are you permitted to ask loan applicants under the fair lending laws? 1. Their race 2. Their religion 3. If they plan to have additional children