NMLS S.A.F.E. Exam 6 questions with
complete solutions already passed
_____ are responsible for ensuring that loan applicants meet the requirements established by
lenders and investors for loan programs.
A. Loan processors
B. Loan originators
C. Investors
D. Underwriters - correct answer ✔✔D. Underwriters
Which of the following is considered "reasonably reliable" evidence to verify the repayment
ability of a borrower?
A. IRS W-2s, tax returns, and payroll receipts
B. IRS W-2s, tax receipts, and bank deposit receipts
C. Previous mortgage statements and canceled checks
D. Tax returns, Comptroller's certification, and CPA letter - correct answer ✔✔A. IRS W-2s, tax
returns, and payroll receipts
Civil monetary penalties resulting from the failure to report data for HMDA are:
A. $1,000 per violation, with a maximum of $300,000 in fines annually
B. Calculated based on a penalty matrix, which considers good faith, previous violations, and
financial resources of the entity involved
C. Calculated based on a percentage of total loan amounts of mortgages in violation
,D. $11,000 per violation, but can be increased to $25,000 for willful and knowing violations -
correct answer ✔✔B. Calculated based on a penalty matrix, which considers good faith,
previous violations, and financial resources of the entity involved
Sharing a borrower's personal financial information for purposes other than what it was
provided for is a violation of what act?
A. GLB Act
B. S.A.F.E. Act
C. TILA
D. Homeowners Protection Act - correct answer ✔✔A. GLB Act
Which document actually contains the borrower's promise to repay the loan?
A. The deed
B. The note
C. The mortgage
D. The TIL - correct answer ✔✔B. The note
Neither the mortgage nor the deed of trust actually contain the borrower's contractual promise
to repay the loan. The note, or promissory note, is the borrower's promise to repay the loan.
Which federal law includes provisions that address misleading and deceptive advertising
practices?
A. TILA
B. RESPA
C. HMDA
,D. ECOA - correct answer ✔✔A. TILA
The act of guiding homebuyers in a particular direction based on demographics is prohibited by:
A. ECOA and RESPA
B. The Fair Housing Act and ECOA
C. TILA and RESPA
D. RESPA and the Fair Housing Act - correct answer ✔✔B. The Fair Housing Act and ECOA
Using misleading language in an advertisement (for example, using language that suggests that
an advertised loan is "fixed" when it actually is not) is a practice specifically prohibited under:
A. Regulation B
B. Regulation Z
C. FCRA
D. Regulation C - correct answer ✔✔B. Regulation Z
A loan processor or underwriter is exempt from licensure under all of the following
circumstances, except:
A. He/she is employed with a licensed mortgage broker
B. He/she is employed with an exempt mortgage lender
C. He/she does not represent to the public that he/she can perform any of the activities of a
loan originator
D. He/she takes applications on behalf of the loan originator - correct answer ✔✔D. He/she
takes applications on behalf of the loan originator
, The Smiths are buying a house for $200,000. After their 10% down payment, they have also
decided to pay two discount points. What is the dollar amount of the discount points?
A. $4,000
B. $3,800
C. $3,600
D. $2,000 - correct answer ✔✔C. $3,600
Discount points are calculated based on the loan amount, which is determined by subtracting
any down payment (in this case, $20,000) from the purchase price ($200,000). Each discount
point is 1% of the loan amount. In this transaction, the Smiths are obtaining a $180,000 loan
and buying two discount points, equal to 2% of the loan amount. $180,000 × 0.02 = $3,600.
What is the name of the disclosure required for HELOCs?
A. Financial Advantages of Second Mortgages
B. CHARM Booklet
C. Your Home Loan Toolkit: A Step-by-Step Guide
D. What You Should Know about Home Equity Lines of Credit - correct answer ✔✔D. What You
Should Know about Home Equity Lines of Credit
The diligent matching of loan programs with the current financial circumstances of each
customer is known as:
A. Tangible net benefit
B. Loan standards
C. Finance corroboration
D. Loan suitability - correct answer ✔✔D. Loan suitability
complete solutions already passed
_____ are responsible for ensuring that loan applicants meet the requirements established by
lenders and investors for loan programs.
A. Loan processors
B. Loan originators
C. Investors
D. Underwriters - correct answer ✔✔D. Underwriters
Which of the following is considered "reasonably reliable" evidence to verify the repayment
ability of a borrower?
A. IRS W-2s, tax returns, and payroll receipts
B. IRS W-2s, tax receipts, and bank deposit receipts
C. Previous mortgage statements and canceled checks
D. Tax returns, Comptroller's certification, and CPA letter - correct answer ✔✔A. IRS W-2s, tax
returns, and payroll receipts
Civil monetary penalties resulting from the failure to report data for HMDA are:
A. $1,000 per violation, with a maximum of $300,000 in fines annually
B. Calculated based on a penalty matrix, which considers good faith, previous violations, and
financial resources of the entity involved
C. Calculated based on a percentage of total loan amounts of mortgages in violation
,D. $11,000 per violation, but can be increased to $25,000 for willful and knowing violations -
correct answer ✔✔B. Calculated based on a penalty matrix, which considers good faith,
previous violations, and financial resources of the entity involved
Sharing a borrower's personal financial information for purposes other than what it was
provided for is a violation of what act?
A. GLB Act
B. S.A.F.E. Act
C. TILA
D. Homeowners Protection Act - correct answer ✔✔A. GLB Act
Which document actually contains the borrower's promise to repay the loan?
A. The deed
B. The note
C. The mortgage
D. The TIL - correct answer ✔✔B. The note
Neither the mortgage nor the deed of trust actually contain the borrower's contractual promise
to repay the loan. The note, or promissory note, is the borrower's promise to repay the loan.
Which federal law includes provisions that address misleading and deceptive advertising
practices?
A. TILA
B. RESPA
C. HMDA
,D. ECOA - correct answer ✔✔A. TILA
The act of guiding homebuyers in a particular direction based on demographics is prohibited by:
A. ECOA and RESPA
B. The Fair Housing Act and ECOA
C. TILA and RESPA
D. RESPA and the Fair Housing Act - correct answer ✔✔B. The Fair Housing Act and ECOA
Using misleading language in an advertisement (for example, using language that suggests that
an advertised loan is "fixed" when it actually is not) is a practice specifically prohibited under:
A. Regulation B
B. Regulation Z
C. FCRA
D. Regulation C - correct answer ✔✔B. Regulation Z
A loan processor or underwriter is exempt from licensure under all of the following
circumstances, except:
A. He/she is employed with a licensed mortgage broker
B. He/she is employed with an exempt mortgage lender
C. He/she does not represent to the public that he/she can perform any of the activities of a
loan originator
D. He/she takes applications on behalf of the loan originator - correct answer ✔✔D. He/she
takes applications on behalf of the loan originator
, The Smiths are buying a house for $200,000. After their 10% down payment, they have also
decided to pay two discount points. What is the dollar amount of the discount points?
A. $4,000
B. $3,800
C. $3,600
D. $2,000 - correct answer ✔✔C. $3,600
Discount points are calculated based on the loan amount, which is determined by subtracting
any down payment (in this case, $20,000) from the purchase price ($200,000). Each discount
point is 1% of the loan amount. In this transaction, the Smiths are obtaining a $180,000 loan
and buying two discount points, equal to 2% of the loan amount. $180,000 × 0.02 = $3,600.
What is the name of the disclosure required for HELOCs?
A. Financial Advantages of Second Mortgages
B. CHARM Booklet
C. Your Home Loan Toolkit: A Step-by-Step Guide
D. What You Should Know about Home Equity Lines of Credit - correct answer ✔✔D. What You
Should Know about Home Equity Lines of Credit
The diligent matching of loan programs with the current financial circumstances of each
customer is known as:
A. Tangible net benefit
B. Loan standards
C. Finance corroboration
D. Loan suitability - correct answer ✔✔D. Loan suitability
