Mortgage Loan Originator Exam UPDATED
ACTUAL Exam Questions and CORRECT
Answers
HOEPA - Home Ownership and Equity Protection Act - CORRECT ANSWER - Enacted
in 1994 as an amendment to the Truth in Lending Act (TILA) to address abusive practices in
refinances and closed-end home equity loans with high interest rates or high fees
HOEPA Loans allow prepayment penalty during the first 3 years after the loan is consummated.
Uniform Residential Loan Application - CORRECT ANSWER - Standard form developed
and required by Fannie Mae and Freddie Mac.
5 different forms: URLA form, URLA-Additional Borrower, URLA-Continuation Sheet, URLA-
Unmarried Addendum, and URLA-Lender Information Form
According to the Fair Credit reporting act, if adverse action is taken against a credit applicant
because of information on a credit report, - CORRECT ANSWER - the lender who used
that report is required to provide to the consumer the name, address, and telephone number of the
consumer reporting agency that furnished the report.
Lenders that generate mortgage loans may receive some degree of legal protection against
borrower lawsuits. The level of protection they receive will depend on the type of loan they
make. What type of mortgage loan gives the lender the greatest level of protection against
borrower lawsuits? - CORRECT ANSWER - Safe Harbor Qualified Mortgage Loan gives
the lender the greatest level of protection against borrower lawsuits.
Regulation B - CORRECT ANSWER - AKA ECOA (Equal Credit Opportunity Act)
The Annual Percentage Rate as to disclosed under the TILA is - CORRECT ANSWER -
The cost of a borrower's credit calculated as an annual rate.
,What are the protected classes of the Equal Credit Opportunity Act? - CORRECT
ANSWER - race, color, religion, national origin, sex, marital status, age, receipt of public
assistance, or good faith exercise of any rights
Who must receive a Notice of Right to Rescind in a refinance transaction? - CORRECT
ANSWER - Anyone with an ownership interest in the property
Under what circumstance is a creditor permitted to provide a customer with an updated loan
estimate? - CORRECT ANSWER - Common reasons you may receive a revised Loan
Estimate include: The home was appraised at less than the sales price. Your lender could not
document your overtime, bonus, or other irregular income. You decided to get a different kind of
loan or change your down payment amount.
Subordination Clause - CORRECT ANSWER - A clause which permits the placing of a
mortgage at a later date which takes priority over an existing mortgage.
Where do funds for FHA loans come from? - CORRECT ANSWER - Approved Lenders
Ralph has applied for a residential mortgage loan. His application indicates that he has worked
for his mother's corporation for the past 15 years as a w-2 employee. Ralph recently received and
holds 20% of the corporation's stock - CORRECT ANSWER - Ralph should use 2 years of
his personal tax returns since he is employed by a family member to verify his employment.
To comply with the FACTA, a residential mortgage loan originator: - CORRECT
ANSWER - Should implement a written identity theft prevention program
John has purchased a home for a sales price of $300,000. He has been approved for a mortgage
with an 85% LTV and a loan amount of $255,000. The maximum amount the Real estate agent
may contribute toward the borrower's settlement costs per - CORRECT ANSWER -
FNMA guidelines is $18,000 (6% of the value of the subject property.)
, What is the name of the independent entity through which mortgage lenders order residential real
estate valuation services for properties on which they are considering extending loans to
homebuyers? - CORRECT ANSWER - The Appraisal Management Company
An applicant for a mortgage loan is a salaried employee who is paid $1,350 every two weeks, In
addition, she indicates that she receives $500 a month in alimony. - CORRECT
ANSWER - The gross monthly income you can use to qualify her is $3,550.
1350 X 26 (pay periods) = 35100 per year / 12 months = 2925 base per month. $500 alimony is
non taxable and can be grossed up 125% to determine adjusted gross income. 500 X 1.25 = 625
adjusted gross per month in alimony income. => 625+2925=$3,550 total monthly income
How long could a chapter 7 bankruptcy show on a credit report? - CORRECT ANSWER -
A maximum of 10 years.
Where should mortgage call reports be submitted to? - CORRECT ANSWER - Mortgage
call reports must be submitted to the NMLS quarterly
Gramm-Leach-Bliley Act (GLBA) - CORRECT ANSWER - A U.S. law that requires
banks and financial institutions to alert customers of their policies and practices in disclosing
customer information.
Equal Credit Opportunity Act (ECOA) - CORRECT ANSWER - The federal law that
prohibits discrimination in the extension of credit because of race, color, religion, national origin,
sex, age, or marital status.
gives the consumer the right to receive a copy of the appraisal report on a dwelling that is to used
as collateral for a loan.
A non-depository mortgage loan originator - CORRECT ANSWER - offers or negotiate
terms of a residential mortgage loan for compensation or gain is not exempt from SAFE
licensing.
ACTUAL Exam Questions and CORRECT
Answers
HOEPA - Home Ownership and Equity Protection Act - CORRECT ANSWER - Enacted
in 1994 as an amendment to the Truth in Lending Act (TILA) to address abusive practices in
refinances and closed-end home equity loans with high interest rates or high fees
HOEPA Loans allow prepayment penalty during the first 3 years after the loan is consummated.
Uniform Residential Loan Application - CORRECT ANSWER - Standard form developed
and required by Fannie Mae and Freddie Mac.
5 different forms: URLA form, URLA-Additional Borrower, URLA-Continuation Sheet, URLA-
Unmarried Addendum, and URLA-Lender Information Form
According to the Fair Credit reporting act, if adverse action is taken against a credit applicant
because of information on a credit report, - CORRECT ANSWER - the lender who used
that report is required to provide to the consumer the name, address, and telephone number of the
consumer reporting agency that furnished the report.
Lenders that generate mortgage loans may receive some degree of legal protection against
borrower lawsuits. The level of protection they receive will depend on the type of loan they
make. What type of mortgage loan gives the lender the greatest level of protection against
borrower lawsuits? - CORRECT ANSWER - Safe Harbor Qualified Mortgage Loan gives
the lender the greatest level of protection against borrower lawsuits.
Regulation B - CORRECT ANSWER - AKA ECOA (Equal Credit Opportunity Act)
The Annual Percentage Rate as to disclosed under the TILA is - CORRECT ANSWER -
The cost of a borrower's credit calculated as an annual rate.
,What are the protected classes of the Equal Credit Opportunity Act? - CORRECT
ANSWER - race, color, religion, national origin, sex, marital status, age, receipt of public
assistance, or good faith exercise of any rights
Who must receive a Notice of Right to Rescind in a refinance transaction? - CORRECT
ANSWER - Anyone with an ownership interest in the property
Under what circumstance is a creditor permitted to provide a customer with an updated loan
estimate? - CORRECT ANSWER - Common reasons you may receive a revised Loan
Estimate include: The home was appraised at less than the sales price. Your lender could not
document your overtime, bonus, or other irregular income. You decided to get a different kind of
loan or change your down payment amount.
Subordination Clause - CORRECT ANSWER - A clause which permits the placing of a
mortgage at a later date which takes priority over an existing mortgage.
Where do funds for FHA loans come from? - CORRECT ANSWER - Approved Lenders
Ralph has applied for a residential mortgage loan. His application indicates that he has worked
for his mother's corporation for the past 15 years as a w-2 employee. Ralph recently received and
holds 20% of the corporation's stock - CORRECT ANSWER - Ralph should use 2 years of
his personal tax returns since he is employed by a family member to verify his employment.
To comply with the FACTA, a residential mortgage loan originator: - CORRECT
ANSWER - Should implement a written identity theft prevention program
John has purchased a home for a sales price of $300,000. He has been approved for a mortgage
with an 85% LTV and a loan amount of $255,000. The maximum amount the Real estate agent
may contribute toward the borrower's settlement costs per - CORRECT ANSWER -
FNMA guidelines is $18,000 (6% of the value of the subject property.)
, What is the name of the independent entity through which mortgage lenders order residential real
estate valuation services for properties on which they are considering extending loans to
homebuyers? - CORRECT ANSWER - The Appraisal Management Company
An applicant for a mortgage loan is a salaried employee who is paid $1,350 every two weeks, In
addition, she indicates that she receives $500 a month in alimony. - CORRECT
ANSWER - The gross monthly income you can use to qualify her is $3,550.
1350 X 26 (pay periods) = 35100 per year / 12 months = 2925 base per month. $500 alimony is
non taxable and can be grossed up 125% to determine adjusted gross income. 500 X 1.25 = 625
adjusted gross per month in alimony income. => 625+2925=$3,550 total monthly income
How long could a chapter 7 bankruptcy show on a credit report? - CORRECT ANSWER -
A maximum of 10 years.
Where should mortgage call reports be submitted to? - CORRECT ANSWER - Mortgage
call reports must be submitted to the NMLS quarterly
Gramm-Leach-Bliley Act (GLBA) - CORRECT ANSWER - A U.S. law that requires
banks and financial institutions to alert customers of their policies and practices in disclosing
customer information.
Equal Credit Opportunity Act (ECOA) - CORRECT ANSWER - The federal law that
prohibits discrimination in the extension of credit because of race, color, religion, national origin,
sex, age, or marital status.
gives the consumer the right to receive a copy of the appraisal report on a dwelling that is to used
as collateral for a loan.
A non-depository mortgage loan originator - CORRECT ANSWER - offers or negotiate
terms of a residential mortgage loan for compensation or gain is not exempt from SAFE
licensing.
