MLO MODULE EXAM QUESTIONS AND
CORECT DETAILED ANSWERS (VERIFIED
ANSWERS) | ALREADY SCORED A+ | NEW
UPDATE 2025
The Consumer Financial Protection Bureau was created by the
a. Federal Home Loan Bank Act.
b. National Housing Act.
c. Federal Reserve Act.
d. Dodd-Frank Act. - ANSWER Dodd-Frank Act
What entity enforces the majority of mortgage lending laws and regulations?
a. Consumer Financial Protection Bureau
b .Federal Deposit Insurance Corporation
c. Federal National Mortgage Association
d. Federal House Finance Agency - ANSWER The Consumer Financial Protection
Bureau enforces the majority of mortgage lending laws and regulations.
________ loans have more risks than allowed in the conforming market.
a. Subprime
b. Mortgage
c. Variable-rate
d. Adjustable - ANSWER Subprime loans have more risks than allowed in the
conforming market.
,All of the following are examples of a primary market mortgage lender EXCEPT a
a. savings and loans association.
b. federal home loan mortgage corporation.
c. credit union.
d. commercial bank. - ANSWER The federal home loan mortgage corporation is
a secondary (not primary) market entity.
The Consumer Financial Protection Act combined consumer protection
responsibilities under the CFPB from the following agencies EXCEPT the
a. Federal Trade Commission.
b. Department of Housing and Urban Development.
c. Department of Commerce.
d. Federal Deposit Insurance Corporation. - ANSWER The Consumer Financial
Protection Act consolidated consumer protection responsibilities previously
handled by the Office of the Comptroller of the Currency, Office of Thrift
Supervision, Federal Deposit Insurance Corporation, Federal Reserve, National
Credit Union Administration, the Department of Housing and Urban Development,
and Federal Trade Commission under the CFPB.
Which is NOT a function of the secondary market?
a. standardize loan criteria
b. provide lenders with money to make more loans
c. serve as a depository for consumer assets
d. moderate effects of local real estate cycles - ANSWER Secondary markets are
non-depository entities that purchase closed loans, which conform to the
,guidelines set by the secondary market. They are not depository institutions and
cannot accept consumer deposits.
Which statement about Ginnie Mae is TRUE?
a. Ginnie Mae is a participant in the primary market.
b.Ginnie Mae is a private corporation. c. Ginnie Mae guarantees mortgage-backed
securities. d. Ginnie Mae buys loans from commercial banks and mortgage
companies. - ANSWER Ginnie Mae guarantees investors the timely payment of
principal and interest on MBSs backed by federally-insured or guaranteed loans —
mainly loans insured by the FHA or guaranteed by the VA.
Which entity was established in 1932 as a cooperative to finance housing in local
communities?
a. Federal Home Loan Mortgage Corporation
b. Federal Housing Finance Agency
c. Federal Home Loan Banks
d.Government National Mortgage Association - ANSWER Created by Congress,
the Federal Home Loan Banks have been the largest source of funding for
mortgage lending for eight decades and were established in 1932 as a cooperative
to finance housing in local communities.
The _____ insures deposits in banks and thrift institutions.
a. FHFA
b. CFPB
c. FDIC
d. FHA - ANSWER The FDIC insures deposits in banks and thrift institutions.
, Bob and Mary are providing a gift to their daughter, Amy, as down payment for
the purchase of her new home. They provide a current bank statement for their
account, a copy of their check to Amy, and a copy of the deposit slip into Amy's
account. Amy provides a current ledger from her checking account that verifies
the deposit was made and the amount of the current balance. What key
document is missing?
a. letter from Amy's bank stating the gift funds have been deposited
b. gift letter signed by the donor stating no repayment is expected
c. agreement signed by all parties stating when the gift is to be repaid
d. copy of the deposit receipt from the settlement agent - ANSWER If an
applicant lacks the necessary funds to close a transaction, a gift of the required
amount may be acceptable. The gift should be confirmed by means of a gift letter
signed by the donor. The letter should clearly state that the money represents a
gift and does not have to be repaid. In addition to the gift letter, lenders want to
verify that the donor has the funds available to provide the gift by seeing a copy of
the gift check, a recent bank statement from the donors showing they have the
ability to give the gift and a copy of the deposit receipt showing funds have been
deposited and are available for closing.
Underwriting involves all of the following EXCEPT
a. considering job history.
b. completing a title search.
c. evaluating credit scores.
d. evaluating credit history. - ANSWER Underwriting involves evaluating credit
scores, credit history, appraisals, job history, and other measures of strength or
weakness in the borrower and the collateral. Completing a title search is typically
completed during loan origination or loan processing.
CORECT DETAILED ANSWERS (VERIFIED
ANSWERS) | ALREADY SCORED A+ | NEW
UPDATE 2025
The Consumer Financial Protection Bureau was created by the
a. Federal Home Loan Bank Act.
b. National Housing Act.
c. Federal Reserve Act.
d. Dodd-Frank Act. - ANSWER Dodd-Frank Act
What entity enforces the majority of mortgage lending laws and regulations?
a. Consumer Financial Protection Bureau
b .Federal Deposit Insurance Corporation
c. Federal National Mortgage Association
d. Federal House Finance Agency - ANSWER The Consumer Financial Protection
Bureau enforces the majority of mortgage lending laws and regulations.
________ loans have more risks than allowed in the conforming market.
a. Subprime
b. Mortgage
c. Variable-rate
d. Adjustable - ANSWER Subprime loans have more risks than allowed in the
conforming market.
,All of the following are examples of a primary market mortgage lender EXCEPT a
a. savings and loans association.
b. federal home loan mortgage corporation.
c. credit union.
d. commercial bank. - ANSWER The federal home loan mortgage corporation is
a secondary (not primary) market entity.
The Consumer Financial Protection Act combined consumer protection
responsibilities under the CFPB from the following agencies EXCEPT the
a. Federal Trade Commission.
b. Department of Housing and Urban Development.
c. Department of Commerce.
d. Federal Deposit Insurance Corporation. - ANSWER The Consumer Financial
Protection Act consolidated consumer protection responsibilities previously
handled by the Office of the Comptroller of the Currency, Office of Thrift
Supervision, Federal Deposit Insurance Corporation, Federal Reserve, National
Credit Union Administration, the Department of Housing and Urban Development,
and Federal Trade Commission under the CFPB.
Which is NOT a function of the secondary market?
a. standardize loan criteria
b. provide lenders with money to make more loans
c. serve as a depository for consumer assets
d. moderate effects of local real estate cycles - ANSWER Secondary markets are
non-depository entities that purchase closed loans, which conform to the
,guidelines set by the secondary market. They are not depository institutions and
cannot accept consumer deposits.
Which statement about Ginnie Mae is TRUE?
a. Ginnie Mae is a participant in the primary market.
b.Ginnie Mae is a private corporation. c. Ginnie Mae guarantees mortgage-backed
securities. d. Ginnie Mae buys loans from commercial banks and mortgage
companies. - ANSWER Ginnie Mae guarantees investors the timely payment of
principal and interest on MBSs backed by federally-insured or guaranteed loans —
mainly loans insured by the FHA or guaranteed by the VA.
Which entity was established in 1932 as a cooperative to finance housing in local
communities?
a. Federal Home Loan Mortgage Corporation
b. Federal Housing Finance Agency
c. Federal Home Loan Banks
d.Government National Mortgage Association - ANSWER Created by Congress,
the Federal Home Loan Banks have been the largest source of funding for
mortgage lending for eight decades and were established in 1932 as a cooperative
to finance housing in local communities.
The _____ insures deposits in banks and thrift institutions.
a. FHFA
b. CFPB
c. FDIC
d. FHA - ANSWER The FDIC insures deposits in banks and thrift institutions.
, Bob and Mary are providing a gift to their daughter, Amy, as down payment for
the purchase of her new home. They provide a current bank statement for their
account, a copy of their check to Amy, and a copy of the deposit slip into Amy's
account. Amy provides a current ledger from her checking account that verifies
the deposit was made and the amount of the current balance. What key
document is missing?
a. letter from Amy's bank stating the gift funds have been deposited
b. gift letter signed by the donor stating no repayment is expected
c. agreement signed by all parties stating when the gift is to be repaid
d. copy of the deposit receipt from the settlement agent - ANSWER If an
applicant lacks the necessary funds to close a transaction, a gift of the required
amount may be acceptable. The gift should be confirmed by means of a gift letter
signed by the donor. The letter should clearly state that the money represents a
gift and does not have to be repaid. In addition to the gift letter, lenders want to
verify that the donor has the funds available to provide the gift by seeing a copy of
the gift check, a recent bank statement from the donors showing they have the
ability to give the gift and a copy of the deposit receipt showing funds have been
deposited and are available for closing.
Underwriting involves all of the following EXCEPT
a. considering job history.
b. completing a title search.
c. evaluating credit scores.
d. evaluating credit history. - ANSWER Underwriting involves evaluating credit
scores, credit history, appraisals, job history, and other measures of strength or
weakness in the borrower and the collateral. Completing a title search is typically
completed during loan origination or loan processing.
