SOMB 1 PRACTICE TEST 2025 QUESTIONS AND ANSWERS
What is the process of transferring loan documents to a warehouse bank or an investor called? -
CORRECT ANSWER✅✅✅Shipping
Which of the following is a responsibility of the underwriter? - CORRECT ANSWER✅✅✅Accept or
reject loan applications
Which of the following is a responsibility of the closer? - CORRECT ANSWER✅✅✅- conclude a
transaction
- interact with the title and escrow companies
What does the Mortgage Banking Association Canon of Ethics say concerning competition? - CORRECT
ANSWER✅✅✅It supports healthy competition in the real estate finance industry
What does the Mortgage Bankers Association Canon of Ethics contain ethical standards pertaining to? -
CORRECT ANSWER✅✅✅- Honesty in advertising
- Confidentiality
- Compliance with laws
Factors that affect an investor's appetite for certain loan products? - CORRECT ANSWER✅✅✅- Risk
of default or loss
- Exaggerated prepayment speeds
- Costs to service based upon structure
- Risk for potential fraud
- Liquidity
A jumbo or super jumbo loan is considered to be a ____________________ loan product, while a loan
that is eligible for purchase by Fannie Mae or Freddie Mac is most likely a _______________ loan
product. - CORRECT ANSWER✅✅✅Non-comforming; conforming
, FHA charges a _____________ to protect lenders in the event the borrower fails to repay the mortgage
loan - CORRECT ANSWER✅✅✅Mortgage Insurance Premium (MIP)
The increased number of payments that come with a bi-weekly mortgage results in the following: -
CORRECT ANSWER✅✅✅- Total interest cost on the loan is reduced
- Principal amortizes more quickly
- Loan is paid off faster
Adjustable Rate Mortgage characteristics - CORRECT ANSWER✅✅✅- Amount of monthly payments
may change when the interest rate adjusts
- ARMs may have an annual and lifetime cap governing how much the interest rate may change
An Alt-A product that does not cause the balance of the loan to decrease and does not build equity in
the home unless the value increases - CORRECT ANSWER✅✅✅Interest Only
Wholesale lenders can perfrom - CORRECT ANSWER✅✅✅- Underwriting
- Closing
- Funding
Wholesale production is more risky for the mortgage lender because - CORRECT ANSWER✅✅✅Loan
quality might be more difficult to monitor
Wholesale lending may involve table funding, which means - CORRECT ANSWER✅✅✅A third-party
originator closes the loan in its own name for simultaneous assignment to the investo who advanced
money to fund the closing
Wholesale production channels allow mortgage lenders to - CORRECT ANSWER✅✅✅Reach groups
of customers that they would not have otherwise reached
Stages of loan production - CORRECT ANSWER✅✅✅- Origination
- Processing
What is the process of transferring loan documents to a warehouse bank or an investor called? -
CORRECT ANSWER✅✅✅Shipping
Which of the following is a responsibility of the underwriter? - CORRECT ANSWER✅✅✅Accept or
reject loan applications
Which of the following is a responsibility of the closer? - CORRECT ANSWER✅✅✅- conclude a
transaction
- interact with the title and escrow companies
What does the Mortgage Banking Association Canon of Ethics say concerning competition? - CORRECT
ANSWER✅✅✅It supports healthy competition in the real estate finance industry
What does the Mortgage Bankers Association Canon of Ethics contain ethical standards pertaining to? -
CORRECT ANSWER✅✅✅- Honesty in advertising
- Confidentiality
- Compliance with laws
Factors that affect an investor's appetite for certain loan products? - CORRECT ANSWER✅✅✅- Risk
of default or loss
- Exaggerated prepayment speeds
- Costs to service based upon structure
- Risk for potential fraud
- Liquidity
A jumbo or super jumbo loan is considered to be a ____________________ loan product, while a loan
that is eligible for purchase by Fannie Mae or Freddie Mac is most likely a _______________ loan
product. - CORRECT ANSWER✅✅✅Non-comforming; conforming
, FHA charges a _____________ to protect lenders in the event the borrower fails to repay the mortgage
loan - CORRECT ANSWER✅✅✅Mortgage Insurance Premium (MIP)
The increased number of payments that come with a bi-weekly mortgage results in the following: -
CORRECT ANSWER✅✅✅- Total interest cost on the loan is reduced
- Principal amortizes more quickly
- Loan is paid off faster
Adjustable Rate Mortgage characteristics - CORRECT ANSWER✅✅✅- Amount of monthly payments
may change when the interest rate adjusts
- ARMs may have an annual and lifetime cap governing how much the interest rate may change
An Alt-A product that does not cause the balance of the loan to decrease and does not build equity in
the home unless the value increases - CORRECT ANSWER✅✅✅Interest Only
Wholesale lenders can perfrom - CORRECT ANSWER✅✅✅- Underwriting
- Closing
- Funding
Wholesale production is more risky for the mortgage lender because - CORRECT ANSWER✅✅✅Loan
quality might be more difficult to monitor
Wholesale lending may involve table funding, which means - CORRECT ANSWER✅✅✅A third-party
originator closes the loan in its own name for simultaneous assignment to the investo who advanced
money to fund the closing
Wholesale production channels allow mortgage lenders to - CORRECT ANSWER✅✅✅Reach groups
of customers that they would not have otherwise reached
Stages of loan production - CORRECT ANSWER✅✅✅- Origination
- Processing
