MLO SAFE NMLS Safe Test Practice Questions and
Answers
Per 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?
CORRECT ANS-$0.00, dual compensation is not allowed. Compensation must be borrower
paid or lender paid.
What kinds of reasons are necessary for a lender to take adverse action with regard to a
borrower? CORRECT ANS-Specific reasons.
Adverse action means ______________________. CORRECT ANS-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.
Per Regulation B, Lenders should retain certain records for _____________ months.
CORRECT ANS-25 Months
Because 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. CORRECT ANS-
APOR ( Average Prime Offer Rate), 8.5%
, MLO SAFE NMLS Safe Test Practice Questions and
Answers
Regulation C is known as ________________________. CORRECT ANS-HMDA, The Home
Mortgage Disclosure Act.
What is the purpose of HMDA? CORRECT ANS-The HMDA determines whether financial
institutions are serving the housing needs of their communities. It also identifies patterns of
discriminatory lending.
Under what circumstances can a lender with an Affiliated Business Arrangement require a
borrower to use a specific third party service provider? CORRECT ANS-If there are no
kickback or referral fees and the service provider is an attorney, credit reporting agency or
appraiser the lender can require that the borrower uses the provider
If a transfer of servicing occurs, the _______________ must provide a servicing transfer
statement not less than ________ days before the transfer occurs. CORRECT ANS-Servicer,
15 (fifteen) days.
An individual who fails the MLO written exam 3 times must wait _________ months to retake
the exam. CORRECT ANS-6 (Six) Months
, MLO SAFE NMLS Safe Test Practice Questions and
Answers
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 __________________________. CORRECT ANS-Predatory Lending.
RESPA-Real Estate Settlement Procedures Act CORRECT ANS-The Federal Statute that deals
with the settlement of residential mortgage loans.
RESPA's section 9 Prohibits CORRECT ANS-Home sellers from requiring home buyers to
purchase title insurance from a particular company providing title services.
The 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. CORRECT ANS-upon completion and 3
business days
TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) CORRECT ANS-Per the Dodd
Frank Act, a single disclosure form combines these 2 statements.
, MLO SAFE NMLS Safe Test Practice Questions and
Answers
Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and fees may not exceed
________% of the total loan amount. CORRECT ANS-3% (three percent)
Per 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? CORRECT ANS-All loans, whether owner occupied or not.
A loan subject to HOEPA allows prepayment penalties for the first ______ years of the loan.
CORRECT ANS-2 (two) years
Per 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.
CORRECT ANS-All three would be considered abusive acts.
Answers
Per 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?
CORRECT ANS-$0.00, dual compensation is not allowed. Compensation must be borrower
paid or lender paid.
What kinds of reasons are necessary for a lender to take adverse action with regard to a
borrower? CORRECT ANS-Specific reasons.
Adverse action means ______________________. CORRECT ANS-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.
Per Regulation B, Lenders should retain certain records for _____________ months.
CORRECT ANS-25 Months
Because 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. CORRECT ANS-
APOR ( Average Prime Offer Rate), 8.5%
, MLO SAFE NMLS Safe Test Practice Questions and
Answers
Regulation C is known as ________________________. CORRECT ANS-HMDA, The Home
Mortgage Disclosure Act.
What is the purpose of HMDA? CORRECT ANS-The HMDA determines whether financial
institutions are serving the housing needs of their communities. It also identifies patterns of
discriminatory lending.
Under what circumstances can a lender with an Affiliated Business Arrangement require a
borrower to use a specific third party service provider? CORRECT ANS-If there are no
kickback or referral fees and the service provider is an attorney, credit reporting agency or
appraiser the lender can require that the borrower uses the provider
If a transfer of servicing occurs, the _______________ must provide a servicing transfer
statement not less than ________ days before the transfer occurs. CORRECT ANS-Servicer,
15 (fifteen) days.
An individual who fails the MLO written exam 3 times must wait _________ months to retake
the exam. CORRECT ANS-6 (Six) Months
, MLO SAFE NMLS Safe Test Practice Questions and
Answers
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 __________________________. CORRECT ANS-Predatory Lending.
RESPA-Real Estate Settlement Procedures Act CORRECT ANS-The Federal Statute that deals
with the settlement of residential mortgage loans.
RESPA's section 9 Prohibits CORRECT ANS-Home sellers from requiring home buyers to
purchase title insurance from a particular company providing title services.
The 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. CORRECT ANS-upon completion and 3
business days
TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate) CORRECT ANS-Per the Dodd
Frank Act, a single disclosure form combines these 2 statements.
, MLO SAFE NMLS Safe Test Practice Questions and
Answers
Per the Dodd-Frank Acvt, to be a "qualified mortgage" total points and fees may not exceed
________% of the total loan amount. CORRECT ANS-3% (three percent)
Per 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? CORRECT ANS-All loans, whether owner occupied or not.
A loan subject to HOEPA allows prepayment penalties for the first ______ years of the loan.
CORRECT ANS-2 (two) years
Per 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.
CORRECT ANS-All three would be considered abusive acts.
