NMLS MLO Exam; Questions and Answers Rated A+
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan
that does not meet QRM guidelines? CORRECT ANS-5%
Overt Discrimination CORRECT ANS-Refusing service to anyone of a certain race, ethnicity,
etc.
Under ECOA can you ask how many children a borrower has? CORRECT ANS-No
What document specifies that a property is being used as security in the event of
nonpayment of a debt? CORRECT ANS-Mortgage
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? CORRECT ANS-TIP (Total Interest
Percentage)
COFI comes from what region in the country? CORRECT ANS-The 11th Federal Home Loan
Bank (Arizona, California, and Nevada)
, NMLS MLO Exam; Questions and Answers Rated A+
What disclosure is required to be provided to the applicant within 3 days of application under
reg x? CORRECT ANS-Mortgage Loan Servicing Disclosure
Verification of cash used in a closing is documented by: CORRECT ANS-last 2-3 months
bank statements
The finance charge is the total cost of: CORRECT ANS-the loan in dollars, including points
and mortgage insurance
What IRS forms would you requrest from a borrower who is 40% shareholder in a C-
Corporation? CORRECT ANS-Form 1120
Impersonating someone else in an attempt to obtain their personal financial information is
called: CORRECT ANS-Pretexting
What type of funding occurs when a lender obtains funds from a line of credit at a
commercial bank? CORRECT ANS-Warehouse funding
, NMLS MLO Exam; Questions and Answers Rated A+
What must a borrower do to avoid having late payments reported to a credit bureau?
CORRECT ANS-Pay within 30 days of due date
Max penalty if a borrower is required to use a specific title company or settlement agent?
CORRECT ANS-3 times the fee
What should not be over-weighted in an analysis of borrower repayment capacity?
CORRECT ANS-Credit scores
Max prepayment penalty on residential mortgages in the first year of the loan CORRECT
ANS-3%
What must condominium associations do with respect to property insurance? CORRECT
ANS-Keep a "blanket" policy that protects the entire structure
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? CORRECT ANS-
Before the referral to the title company is made
, NMLS MLO Exam; Questions and Answers Rated A+
Website to obtain copy of your credit report that the credit bureaus are required to provide
once per year at no charge CORRECT ANS-annualcreditreport.com
2/3/6 caps CORRECT ANS-ARM initial adjustment max is 2%, subsequent adjustment
period max is 3%, and lifetime cap of 6%
What does FHLB stand for and what do they provide? CORRECT ANS-Federal Home Loan
Bank, and they provide advances to financial institutions for residential mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan
that does not meet QRM guidelines? CORRECT ANS-5%
On a purchase transaction, what document contains the purchase price for a property?
CORRECT ANS-Sales Contract
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
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan
that does not meet QRM guidelines? CORRECT ANS-5%
Overt Discrimination CORRECT ANS-Refusing service to anyone of a certain race, ethnicity,
etc.
Under ECOA can you ask how many children a borrower has? CORRECT ANS-No
What document specifies that a property is being used as security in the event of
nonpayment of a debt? CORRECT ANS-Mortgage
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? CORRECT ANS-TIP (Total Interest
Percentage)
COFI comes from what region in the country? CORRECT ANS-The 11th Federal Home Loan
Bank (Arizona, California, and Nevada)
, NMLS MLO Exam; Questions and Answers Rated A+
What disclosure is required to be provided to the applicant within 3 days of application under
reg x? CORRECT ANS-Mortgage Loan Servicing Disclosure
Verification of cash used in a closing is documented by: CORRECT ANS-last 2-3 months
bank statements
The finance charge is the total cost of: CORRECT ANS-the loan in dollars, including points
and mortgage insurance
What IRS forms would you requrest from a borrower who is 40% shareholder in a C-
Corporation? CORRECT ANS-Form 1120
Impersonating someone else in an attempt to obtain their personal financial information is
called: CORRECT ANS-Pretexting
What type of funding occurs when a lender obtains funds from a line of credit at a
commercial bank? CORRECT ANS-Warehouse funding
, NMLS MLO Exam; Questions and Answers Rated A+
What must a borrower do to avoid having late payments reported to a credit bureau?
CORRECT ANS-Pay within 30 days of due date
Max penalty if a borrower is required to use a specific title company or settlement agent?
CORRECT ANS-3 times the fee
What should not be over-weighted in an analysis of borrower repayment capacity?
CORRECT ANS-Credit scores
Max prepayment penalty on residential mortgages in the first year of the loan CORRECT
ANS-3%
What must condominium associations do with respect to property insurance? CORRECT
ANS-Keep a "blanket" policy that protects the entire structure
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? CORRECT ANS-
Before the referral to the title company is made
, NMLS MLO Exam; Questions and Answers Rated A+
Website to obtain copy of your credit report that the credit bureaus are required to provide
once per year at no charge CORRECT ANS-annualcreditreport.com
2/3/6 caps CORRECT ANS-ARM initial adjustment max is 2%, subsequent adjustment
period max is 3%, and lifetime cap of 6%
What does FHLB stand for and what do they provide? CORRECT ANS-Federal Home Loan
Bank, and they provide advances to financial institutions for residential mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan
that does not meet QRM guidelines? CORRECT ANS-5%
On a purchase transaction, what document contains the purchase price for a property?
CORRECT ANS-Sales Contract
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
