Mortgage Educators California 20hr MLO
Course Notes Study Set with All
Answers and Illustrations Given
property taxes are superior to all other taxes meaning.... - ✔✔they are paid first
Federal Reserve System (1913) - ✔✔It is the central banking system of the
United States. It was created in 1913 with the enactment of the Federal Reserve
Act, largely in response to a series of financial panics, particularly a severe panic
in 1907; This was the first step to creating the mortgage industry lending
Federal Home Loan Bank Act (1932) - ✔✔Gave Federal Home Loan Banks
authority to lend money to thrifts, S&Ls, credit unions, savings banks to finance
home mortgages in their neighborhoods
Banking Act (1933) - ✔✔The law that established the Federal Deposit Insurance
Corporation (FDIC) to insure bank deposits. It also prohibited commercial banks
from selling insurance or acting as investment banks. Ensures deposits and
protects consumers against bank default.
Department Of Housing And Urban Development (HUD) (1965) - ✔✔Provides
financial incentives to renovate and build within certain urban areas, improves
the nations communities and enforces fair housing laws
1|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
,Community Reinvestment Act (CRA) (1977) - ✔✔A congressional act that
encourages mortgage originators to actively lend in their communities and that
requires financial institutions to evaluate the "fairness" of their lending
practices. Analyzes banks success or failure in reaching out to lending
communities it serves.
What year did FNMA (Federal National Mortgage Association) become a GSE
(Government Sponsored Entity)? - ✔✔1968
Government National Mortgage Association (GNMA) - ✔✔Commonly known as
"Ginnie Mae," this agency of HUD operates in the secondary mortgage market.
It is involved with special government financing programs. Created in 1968
FNMA (Fannie Mae) - ✔✔Federal National Mortgage Association, a major
secondary money market player. It is privately owned, but Federally regulated.
FHLMC (Federal Home Loan Mortgage Corporation) - ✔✔The Federal Home
Loan Mortgage Corporation, commonly known as Freddie Mac. The company
buys mortgages from lending institutions, pools them with other loans and then
sells shares to investors; an independent stock company which creates a
secondary market in conventional residential loans and in FHA and VA loans by
purchasing mortgages. Works hand in hand with FNMA
2|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
,When did the housing bubble peak? - ✔✔July 2006
Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) *aka The
Dodd-Frank Act* - ✔✔Put in place many of the regulations we have in the
mortgage industry today
What created the CFPB (Consumer Financial Protection Bureau)? - ✔✔The
Dodd-Frank Act
Consumer Financial Protection Bureau (CFPB) - ✔✔A U.S. government agency
that helps protect consumers by regulating financial products and services, like
mortgages, credit cards, banks, credit unions and student loans. Proposes new
regulations, supervises the mortgage industry and enforces federal law to avoid
another recession incident.
NMLS - ✔✔Nationwide Mortgage Licensing System and Registry
Mortgage Loan Originator (MLO) - ✔✔Real estate licensee who conducts
mortgage loan origination activities and is required to register annually on the
Nationwide Mortgage Licensing System & Registry (NMLS). Individual who
receives compensation or gain for taking residential mortgage loan applications
or offers and negotiates terms of a residential mortgage loan.
3|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
, True or False: The Great Recession was caused, in large part, by predatory
lending practices? - ✔✔True
Two Types of MLO's - ✔✔Licensed MLOs and Registered MLOs
Conference of State Bank Supervisors (CSBS) - ✔✔A national organization of
state bank supervisors who are charged with ensuring that state banking
institutions adhere to certain standards. The organization played a major role in
the formation of the NMLS-R and in the drafting of the model licensing law. Also
helped develop the American Association Of Residential Mortgage Regulators
Does the NMLS issue licenses? - ✔✔NO. It is merely a database that keeps track
of all services provided and information.
What do processors and underwriters do ? - ✔✔These unlicensed positions help
MLOs perform data entry to complete or start the loan process for the client.
Loan Processor - ✔✔One who is responsible for verifying information contained
in a prospective borrower's loan file and for coordinating aspects of the loan
process to make it go smoothly in order. Application, Document, Employment,
Verification Then is sent to the underwriter who approves or denies.
Underwriter - ✔✔A person who evaluates and classifies risks to accept or reject
them on behalf of the insurer. Either Approves or Denies.
4|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
Course Notes Study Set with All
Answers and Illustrations Given
property taxes are superior to all other taxes meaning.... - ✔✔they are paid first
Federal Reserve System (1913) - ✔✔It is the central banking system of the
United States. It was created in 1913 with the enactment of the Federal Reserve
Act, largely in response to a series of financial panics, particularly a severe panic
in 1907; This was the first step to creating the mortgage industry lending
Federal Home Loan Bank Act (1932) - ✔✔Gave Federal Home Loan Banks
authority to lend money to thrifts, S&Ls, credit unions, savings banks to finance
home mortgages in their neighborhoods
Banking Act (1933) - ✔✔The law that established the Federal Deposit Insurance
Corporation (FDIC) to insure bank deposits. It also prohibited commercial banks
from selling insurance or acting as investment banks. Ensures deposits and
protects consumers against bank default.
Department Of Housing And Urban Development (HUD) (1965) - ✔✔Provides
financial incentives to renovate and build within certain urban areas, improves
the nations communities and enforces fair housing laws
1|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
,Community Reinvestment Act (CRA) (1977) - ✔✔A congressional act that
encourages mortgage originators to actively lend in their communities and that
requires financial institutions to evaluate the "fairness" of their lending
practices. Analyzes banks success or failure in reaching out to lending
communities it serves.
What year did FNMA (Federal National Mortgage Association) become a GSE
(Government Sponsored Entity)? - ✔✔1968
Government National Mortgage Association (GNMA) - ✔✔Commonly known as
"Ginnie Mae," this agency of HUD operates in the secondary mortgage market.
It is involved with special government financing programs. Created in 1968
FNMA (Fannie Mae) - ✔✔Federal National Mortgage Association, a major
secondary money market player. It is privately owned, but Federally regulated.
FHLMC (Federal Home Loan Mortgage Corporation) - ✔✔The Federal Home
Loan Mortgage Corporation, commonly known as Freddie Mac. The company
buys mortgages from lending institutions, pools them with other loans and then
sells shares to investors; an independent stock company which creates a
secondary market in conventional residential loans and in FHA and VA loans by
purchasing mortgages. Works hand in hand with FNMA
2|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
,When did the housing bubble peak? - ✔✔July 2006
Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) *aka The
Dodd-Frank Act* - ✔✔Put in place many of the regulations we have in the
mortgage industry today
What created the CFPB (Consumer Financial Protection Bureau)? - ✔✔The
Dodd-Frank Act
Consumer Financial Protection Bureau (CFPB) - ✔✔A U.S. government agency
that helps protect consumers by regulating financial products and services, like
mortgages, credit cards, banks, credit unions and student loans. Proposes new
regulations, supervises the mortgage industry and enforces federal law to avoid
another recession incident.
NMLS - ✔✔Nationwide Mortgage Licensing System and Registry
Mortgage Loan Originator (MLO) - ✔✔Real estate licensee who conducts
mortgage loan origination activities and is required to register annually on the
Nationwide Mortgage Licensing System & Registry (NMLS). Individual who
receives compensation or gain for taking residential mortgage loan applications
or offers and negotiates terms of a residential mortgage loan.
3|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
, True or False: The Great Recession was caused, in large part, by predatory
lending practices? - ✔✔True
Two Types of MLO's - ✔✔Licensed MLOs and Registered MLOs
Conference of State Bank Supervisors (CSBS) - ✔✔A national organization of
state bank supervisors who are charged with ensuring that state banking
institutions adhere to certain standards. The organization played a major role in
the formation of the NMLS-R and in the drafting of the model licensing law. Also
helped develop the American Association Of Residential Mortgage Regulators
Does the NMLS issue licenses? - ✔✔NO. It is merely a database that keeps track
of all services provided and information.
What do processors and underwriters do ? - ✔✔These unlicensed positions help
MLOs perform data entry to complete or start the loan process for the client.
Loan Processor - ✔✔One who is responsible for verifying information contained
in a prospective borrower's loan file and for coordinating aspects of the loan
process to make it go smoothly in order. Application, Document, Employment,
Verification Then is sent to the underwriter who approves or denies.
Underwriter - ✔✔A person who evaluates and classifies risks to accept or reject
them on behalf of the insurer. Either Approves or Denies.
4|Page
©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025.
