MLO PRACTICE EXAM | 206 QUESTIONS
AND CORECT DETAILED ANSWERS
(VERIFIED ANSWERS) | ALREADY SCORED
A+ | NEW UPDATE 2025
Per Regulation Z, which of the following advertisements requires full disclosure of
credit terms by an MLO?
(A) "Affordable rates available"
(B) "Stop paying rent"
(C) "Low down payment"
(D) "Assume loan at 6% interest" - ANSWER "Assume loan at 6% interest"
The ____ is responsible for providing a centralized and standardized system for
mortgage licensing. - ANSWER National Mortgage Licensing System & Registry
Which is the largest secondary market lender? - ANSWER Federal National
Mortgage Association aka Fannie Mae
If real estate agent Stefani accepted flyers from a mortgage company (containing
market information about her and MLO Craig) and Stefani distributes the flyers at
an open house, who is in violation of REPSA? - ANSWER Both MLO Craig and
agent Stefani are violating RESPA
Which of the following may an MLO's compensation NOT be based?
(1) long-term loan performance
,(2) overall loan volume
(3) a flat fee fixed in advance
(4) APR - ANSWER APR
A ___ agreement is a written agreement between lien holders on a property that
changes the priority of mortgages, judgments, and other liens. - ANSWER
Subordination
RESPA and TILA regulations both mandate that only the ___ be collected prior to
the borrower's receipt of all mandated disclosures. - ANSWER Credit report fee
Roy is a veteran who is buying a home with a VA loan. The mortgage loan amount
is $132,000. What is the maximum amount the lender can charge for the costs
and services for originating th loan? - ANSWER $1,320
A lender who refuses to make loans on property in certain neighborhoods is
demonstrating the discriminatory practice of: - ANSWER Redlining
According to the GLB Act, an individual who obtains or has obtained a financial
product or service from a financial institution is a: - ANSWER Consumer
When the loan exceeds the maximum ___ established by Fannie Mae and Freddie
Mac for conforming mortgage loans, the loan is called a jumbo loan. - ANSWER
Loan amount
A convertible arm allows a borrower to change: - ANSWER from an adjustable
rate mortgage to a fixed rate mortgage
,An MLO realizes that his customer will not qualify for a loan, so he convinces her
to apply using her mother's identity and financial data. Because the mother knows
that her information is being used, she is considered a: - ANSWER Straw buyer
A company may call a consumer for up to ___ after the consumer makes an
inquiry or submits an application to the company, even if the consumer's phone
number is on the National Do Not Call Registry. - ANSWER 3 months
The VA provides guaranty on eligible home loans for up to ______ of the loan
amount. - ANSWER VA will guarantee up to 50 percent of a home loan up to
$45,000. For loans between $45,000 and $144,000, the minimum guaranty
amount is $22,500, with a maximum guaranty, of up to 40 percent of the loan up
to $36,000, subject to the amount of entitlement a veteran has available.
MLO Jack advertises low-interest rates and APR; however, when qualified
applicants come in, he sells them on a different loan with a slightly higher rate and
more fees. This is most likely an illegal advertising tactic called: - ANSWER Bait
and switch
A mortgage broker rents office space from a title company at a discount in
exchange for referring customers for settlement services. Which statement is
TRUE about this act? - ANSWER The mortgage broker's act is a violation of
RESPA section 8 specific to unlawfully giving anything of value in exchange for
referrals.
Under the Fair Credit Reporting Act, consumer reporting agencies generally may
not report negative credit information that is more than ___ years old. -
ANSWER Seven
, MLO Wyatt takes an application and suspects that a SSN provided by the
consumer may not be valid. What should Wyatt do? - ANSWER Take the
application and verify the validity of the SSN
Consumer reporting agencies have responsibilities for:
(A) Providing consumer credit information to people with a legitimate business
need
(B) deleting disputed data in the credit file
(C) reporting negative information more than 7 years old
(D) providing consumer credit information upon request of an employer or
potential employer - ANSWER Providing consumer credit information to
people with a legitimate business need
The ___ enforces the majority of mortgage lending laws and regulations. -
ANSWER CFPB, Consumer Financial Protection Bureau
As set forth by Regulation Z, which of the following is an allowable action between
an MLO and an appraiser?
(A) asking an appraiser to consider additional information about the dwelling or
comparable properties
(B) conditioning an appraiser's compensation on loan consummation
(C) telling an appraiser a minimum reported value of a dwelling that is needed for
loan approval
(D) failing to compensate an appraiser because the appraiser did not value a
dwelling at a certain amount - ANSWER asking an appraiser to consider
additional information about the dwelling or comparable properties
AND CORECT DETAILED ANSWERS
(VERIFIED ANSWERS) | ALREADY SCORED
A+ | NEW UPDATE 2025
Per Regulation Z, which of the following advertisements requires full disclosure of
credit terms by an MLO?
(A) "Affordable rates available"
(B) "Stop paying rent"
(C) "Low down payment"
(D) "Assume loan at 6% interest" - ANSWER "Assume loan at 6% interest"
The ____ is responsible for providing a centralized and standardized system for
mortgage licensing. - ANSWER National Mortgage Licensing System & Registry
Which is the largest secondary market lender? - ANSWER Federal National
Mortgage Association aka Fannie Mae
If real estate agent Stefani accepted flyers from a mortgage company (containing
market information about her and MLO Craig) and Stefani distributes the flyers at
an open house, who is in violation of REPSA? - ANSWER Both MLO Craig and
agent Stefani are violating RESPA
Which of the following may an MLO's compensation NOT be based?
(1) long-term loan performance
,(2) overall loan volume
(3) a flat fee fixed in advance
(4) APR - ANSWER APR
A ___ agreement is a written agreement between lien holders on a property that
changes the priority of mortgages, judgments, and other liens. - ANSWER
Subordination
RESPA and TILA regulations both mandate that only the ___ be collected prior to
the borrower's receipt of all mandated disclosures. - ANSWER Credit report fee
Roy is a veteran who is buying a home with a VA loan. The mortgage loan amount
is $132,000. What is the maximum amount the lender can charge for the costs
and services for originating th loan? - ANSWER $1,320
A lender who refuses to make loans on property in certain neighborhoods is
demonstrating the discriminatory practice of: - ANSWER Redlining
According to the GLB Act, an individual who obtains or has obtained a financial
product or service from a financial institution is a: - ANSWER Consumer
When the loan exceeds the maximum ___ established by Fannie Mae and Freddie
Mac for conforming mortgage loans, the loan is called a jumbo loan. - ANSWER
Loan amount
A convertible arm allows a borrower to change: - ANSWER from an adjustable
rate mortgage to a fixed rate mortgage
,An MLO realizes that his customer will not qualify for a loan, so he convinces her
to apply using her mother's identity and financial data. Because the mother knows
that her information is being used, she is considered a: - ANSWER Straw buyer
A company may call a consumer for up to ___ after the consumer makes an
inquiry or submits an application to the company, even if the consumer's phone
number is on the National Do Not Call Registry. - ANSWER 3 months
The VA provides guaranty on eligible home loans for up to ______ of the loan
amount. - ANSWER VA will guarantee up to 50 percent of a home loan up to
$45,000. For loans between $45,000 and $144,000, the minimum guaranty
amount is $22,500, with a maximum guaranty, of up to 40 percent of the loan up
to $36,000, subject to the amount of entitlement a veteran has available.
MLO Jack advertises low-interest rates and APR; however, when qualified
applicants come in, he sells them on a different loan with a slightly higher rate and
more fees. This is most likely an illegal advertising tactic called: - ANSWER Bait
and switch
A mortgage broker rents office space from a title company at a discount in
exchange for referring customers for settlement services. Which statement is
TRUE about this act? - ANSWER The mortgage broker's act is a violation of
RESPA section 8 specific to unlawfully giving anything of value in exchange for
referrals.
Under the Fair Credit Reporting Act, consumer reporting agencies generally may
not report negative credit information that is more than ___ years old. -
ANSWER Seven
, MLO Wyatt takes an application and suspects that a SSN provided by the
consumer may not be valid. What should Wyatt do? - ANSWER Take the
application and verify the validity of the SSN
Consumer reporting agencies have responsibilities for:
(A) Providing consumer credit information to people with a legitimate business
need
(B) deleting disputed data in the credit file
(C) reporting negative information more than 7 years old
(D) providing consumer credit information upon request of an employer or
potential employer - ANSWER Providing consumer credit information to
people with a legitimate business need
The ___ enforces the majority of mortgage lending laws and regulations. -
ANSWER CFPB, Consumer Financial Protection Bureau
As set forth by Regulation Z, which of the following is an allowable action between
an MLO and an appraiser?
(A) asking an appraiser to consider additional information about the dwelling or
comparable properties
(B) conditioning an appraiser's compensation on loan consummation
(C) telling an appraiser a minimum reported value of a dwelling that is needed for
loan approval
(D) failing to compensate an appraiser because the appraiser did not value a
dwelling at a certain amount - ANSWER asking an appraiser to consider
additional information about the dwelling or comparable properties
