MLO PRACTICE TEST | 100 COMPLETE
QUESTIONS AND CORECT DETAILED
ANSWERS (VERIFIED ANSWERS) |
ALREADY SCORED A+ | NEW UPDATE 2025
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
4. Will they continue to work after they have children - ANSWER 1. Their race,
a HMDA requirement.
The National Credit Score Disclosure Form provides the following:
1. Statement that the credit score determines loan approval
2. Four reason codes for the credit score
3. A reason for the loan approval status
4. The reason for the loan denial - ANSWER 2. Four reason codes for the credit
score.
The income approach used in valuing property during an appraisal considers the
following:
1. The replacement cost of the property
2. The average meridian income levwels of the community
3. The fair market rental earnings of similar homes
4. The qualifying income potential borrowers - ANSWER 3. The fair market
rental earnings of similar homes
A mortgage broker decides to solicit business from a previous customer who
closed on a home purchase. Which action could result in a $16,000 fine?
1. Contacting the customer 17 months after the purchase transaction closed
,2. Verifying that the customer is not in the no-call-registry before making a sales
call 2 years after the purchase transaction closed
3. The client is listed on the company no-call list and the loan originator calls the
customer just shy of 18 months after the purchase transaction closed.
4. The customer is on the no-call-register and the loan originator calls 14 months
later - ANSWER 3. The client is listed on the company no-call list and the loan
originator calls the customer just shy of 18 months after the purchase transaction
closed. If the customer has requested not to be called then it is a violation to call
the customer.
Which of the following is not a factor in determining an interest rate?
1. Age
2. Time
3. Points
4. Margin - ANSWER 1. Age..age is a prohibited basis under ECOA and can't be
used to determine interest rates. Points are discount fees that are charged to
lower the rate, the longer the time generally higher the rate and margin is the
lenders profit built into the rate
Interest-only mortgages can be all of the following EXCEPT:
1. Can be fixed rate mortgages
2. Can be adjustable rate mortgages
3. Can be junior liens
4. Fully amortized loans - ANSWER 4. Fully amortized loans..means that the
amortization will pay out the loan. With interest only, payments contribute to
interest only and the principal is not reduced.
, Which of the following would not be a penalty for violating RESPA section 8
relating to kickbacks?
1. Three times the value of the referral relating to the kickback and/or unearned
fees.
2. The attorneys fees for the affected person
3. The affected person would have the right to rescind the loan transaction
4. A $10,000 fine and/or 1 year in prison for each violation. - ANSWER 3. The
affected person would have the right to rescind the loan transaction..civil &
criminal liability is provided for violating the prohibition against kickbacks and
unearned fees, including: *Civil liability to the parties affected, equal to three
times the amount of the referral fee, kickback and/or unearned fee*. *The
possibility that the costs associated with any court proceeding and reasonable
attorneys fees could be recovered*. *a fine of no more than $10,000 or
imprisonment for no more than 1 year or both, for each violation.
Who much receive a Notice of Right to Cancel in a refinance transaction?
1. Anyone with ownership interest in the property
2. Only parties who are on the new loan
3. Only parties with 51% or more ownership in the property
4. Only the primary borrower - ANSWER 1. Anyone with ownership interest in
the property...all persons that sign the security instrument must receive a notice
of the right to cancel in any transaction where the security interest in the property
is being used to secure new financing
Under the Gramm Leach Bliley Act, which of the following is considered non
public information?
1. Previous owners of a particular party
2. The street address of a property
QUESTIONS AND CORECT DETAILED
ANSWERS (VERIFIED ANSWERS) |
ALREADY SCORED A+ | NEW UPDATE 2025
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
4. Will they continue to work after they have children - ANSWER 1. Their race,
a HMDA requirement.
The National Credit Score Disclosure Form provides the following:
1. Statement that the credit score determines loan approval
2. Four reason codes for the credit score
3. A reason for the loan approval status
4. The reason for the loan denial - ANSWER 2. Four reason codes for the credit
score.
The income approach used in valuing property during an appraisal considers the
following:
1. The replacement cost of the property
2. The average meridian income levwels of the community
3. The fair market rental earnings of similar homes
4. The qualifying income potential borrowers - ANSWER 3. The fair market
rental earnings of similar homes
A mortgage broker decides to solicit business from a previous customer who
closed on a home purchase. Which action could result in a $16,000 fine?
1. Contacting the customer 17 months after the purchase transaction closed
,2. Verifying that the customer is not in the no-call-registry before making a sales
call 2 years after the purchase transaction closed
3. The client is listed on the company no-call list and the loan originator calls the
customer just shy of 18 months after the purchase transaction closed.
4. The customer is on the no-call-register and the loan originator calls 14 months
later - ANSWER 3. The client is listed on the company no-call list and the loan
originator calls the customer just shy of 18 months after the purchase transaction
closed. If the customer has requested not to be called then it is a violation to call
the customer.
Which of the following is not a factor in determining an interest rate?
1. Age
2. Time
3. Points
4. Margin - ANSWER 1. Age..age is a prohibited basis under ECOA and can't be
used to determine interest rates. Points are discount fees that are charged to
lower the rate, the longer the time generally higher the rate and margin is the
lenders profit built into the rate
Interest-only mortgages can be all of the following EXCEPT:
1. Can be fixed rate mortgages
2. Can be adjustable rate mortgages
3. Can be junior liens
4. Fully amortized loans - ANSWER 4. Fully amortized loans..means that the
amortization will pay out the loan. With interest only, payments contribute to
interest only and the principal is not reduced.
, Which of the following would not be a penalty for violating RESPA section 8
relating to kickbacks?
1. Three times the value of the referral relating to the kickback and/or unearned
fees.
2. The attorneys fees for the affected person
3. The affected person would have the right to rescind the loan transaction
4. A $10,000 fine and/or 1 year in prison for each violation. - ANSWER 3. The
affected person would have the right to rescind the loan transaction..civil &
criminal liability is provided for violating the prohibition against kickbacks and
unearned fees, including: *Civil liability to the parties affected, equal to three
times the amount of the referral fee, kickback and/or unearned fee*. *The
possibility that the costs associated with any court proceeding and reasonable
attorneys fees could be recovered*. *a fine of no more than $10,000 or
imprisonment for no more than 1 year or both, for each violation.
Who much receive a Notice of Right to Cancel in a refinance transaction?
1. Anyone with ownership interest in the property
2. Only parties who are on the new loan
3. Only parties with 51% or more ownership in the property
4. Only the primary borrower - ANSWER 1. Anyone with ownership interest in
the property...all persons that sign the security instrument must receive a notice
of the right to cancel in any transaction where the security interest in the property
is being used to secure new financing
Under the Gramm Leach Bliley Act, which of the following is considered non
public information?
1. Previous owners of a particular party
2. The street address of a property
