THE SAFE MORTGAGE LOAN
ORIGINATOR NATIONAL EXAM STUDY
GUIDE PRACTICE EXAM 1 WITH
CORRECT SOLUTIONS
1. A discount point is BEST described as a charge the borrower pays to: - ANSWER-A.
A lender to decrease the interest rate on the mortgage loan
2. A buyer has made an earnest money payment of $5,000. The buyer pays an
additional $2,000 in option money to be credited at closing on a property with a sale
price of $160,000. If the required down payment is 20%, how much additional money
will the buyer need to provide toward the down payment at closing? - ANSWER-D.
$25,000
3. If an applicant works 40 hours every week and is paid $13.52 per hour, what is the
applicant's monthly income? - ANSWER-B. $2,343.47
4. The requirement for private mortgage insurance is generally discontinued when the
loan-to-value ratio falls below: - ANSWER-C. 80 %
5. Which of the following documents itemizes all settlement costs including lender
charges? - ANSWER-B. HUD-1/Closing Disclosure
6. According to the Truth-in-Lending Act (TILA), the term "refinance" applies to: -
ANSWER-D. The satisfaction of an existing obligation and its replacement by a new
obligation
7. What does a loan originator use to determine the estimated value of a property based
on an analytical comparison of similar property sales? - ANSWER-A. An appraisal
8. Which of the following methods of disclosure does NOT meet the requirements of the
Equal Credit Opportunity Act (ECOA)? - ANSWER-C. Telephone
9. The term "20 basis points" expressed as a percentage is: - ANSWER-B. 0.20%
10. According to the Truth-in-Lending Act (TILA), which of the following fees is
EXCLUDED from the calculation of the annual percentage rate? - ANSWER-A. Hazard
insurance
11. FHA loans are: - ANSWER-B. 100% insured
, 12. The late fee for a conventional loan is: - ANSWER-C. 5 % of principal and interest
13. A funding fee is required for a: - ANSWER-B. VA loan
14. A Mortgage Insurance Premium is required on: - ANSWER-A. FHA loans
15. The mortgagee is the: - ANSWER-B. Lender
16. The borrower does NOT sign which document: - ANSWER-A. Deed
17. Which document is usually NOT recorded? - ANSWER-B. Note
18. A mortgagee title insurance policy is NOT : - ANSWER-C. Optional
19. Which parties sign the deed? - ANSWER-B. Grantor and two witnesses
20. When the mortgagor and mortgagee title insurance policies are issued at the same
time, this is known as: - ANSWER-A. Simultaneous issue
21. A shrubbery hedge is one example of an: - ANSWER-D. Acceptable title
impediment
22. A loan on personal property only is known as: - ANSWER-B. Chattel mortgage
23. Which of the following is NOT a characteristic of a Tenants in Common form of
ownership: - ANSWER-C. Right of survivorship
24. PITI payments do NOT include which of the following: - ANSWER-B. Funding Fee
25. Who does Fannie Mae hold responsible for the quality of an appraisal? - ANSWER-
D. Lender
26. Which law is known as Regulation B? - ANSWER-C. Equal Credit Opportunity Act
27. Which law prohibits discrimination by lenders? - ANSWER-C. Equal Credit
Opportunity Act
28. A property sold for $200,000 and was appraised at $180,000. The borrower
received a loan for $150,000. What is the loan-to-value? - ANSWER-B. 83.3 %
29. How many days does a lender have to send an adverse action notice? - ANSWER-
C. 30
30. The GFE/Loan Estimate must be mailed or given to the borrower within how many
days after receiving the signed application? - ANSWER-A. 3 business days
ORIGINATOR NATIONAL EXAM STUDY
GUIDE PRACTICE EXAM 1 WITH
CORRECT SOLUTIONS
1. A discount point is BEST described as a charge the borrower pays to: - ANSWER-A.
A lender to decrease the interest rate on the mortgage loan
2. A buyer has made an earnest money payment of $5,000. The buyer pays an
additional $2,000 in option money to be credited at closing on a property with a sale
price of $160,000. If the required down payment is 20%, how much additional money
will the buyer need to provide toward the down payment at closing? - ANSWER-D.
$25,000
3. If an applicant works 40 hours every week and is paid $13.52 per hour, what is the
applicant's monthly income? - ANSWER-B. $2,343.47
4. The requirement for private mortgage insurance is generally discontinued when the
loan-to-value ratio falls below: - ANSWER-C. 80 %
5. Which of the following documents itemizes all settlement costs including lender
charges? - ANSWER-B. HUD-1/Closing Disclosure
6. According to the Truth-in-Lending Act (TILA), the term "refinance" applies to: -
ANSWER-D. The satisfaction of an existing obligation and its replacement by a new
obligation
7. What does a loan originator use to determine the estimated value of a property based
on an analytical comparison of similar property sales? - ANSWER-A. An appraisal
8. Which of the following methods of disclosure does NOT meet the requirements of the
Equal Credit Opportunity Act (ECOA)? - ANSWER-C. Telephone
9. The term "20 basis points" expressed as a percentage is: - ANSWER-B. 0.20%
10. According to the Truth-in-Lending Act (TILA), which of the following fees is
EXCLUDED from the calculation of the annual percentage rate? - ANSWER-A. Hazard
insurance
11. FHA loans are: - ANSWER-B. 100% insured
, 12. The late fee for a conventional loan is: - ANSWER-C. 5 % of principal and interest
13. A funding fee is required for a: - ANSWER-B. VA loan
14. A Mortgage Insurance Premium is required on: - ANSWER-A. FHA loans
15. The mortgagee is the: - ANSWER-B. Lender
16. The borrower does NOT sign which document: - ANSWER-A. Deed
17. Which document is usually NOT recorded? - ANSWER-B. Note
18. A mortgagee title insurance policy is NOT : - ANSWER-C. Optional
19. Which parties sign the deed? - ANSWER-B. Grantor and two witnesses
20. When the mortgagor and mortgagee title insurance policies are issued at the same
time, this is known as: - ANSWER-A. Simultaneous issue
21. A shrubbery hedge is one example of an: - ANSWER-D. Acceptable title
impediment
22. A loan on personal property only is known as: - ANSWER-B. Chattel mortgage
23. Which of the following is NOT a characteristic of a Tenants in Common form of
ownership: - ANSWER-C. Right of survivorship
24. PITI payments do NOT include which of the following: - ANSWER-B. Funding Fee
25. Who does Fannie Mae hold responsible for the quality of an appraisal? - ANSWER-
D. Lender
26. Which law is known as Regulation B? - ANSWER-C. Equal Credit Opportunity Act
27. Which law prohibits discrimination by lenders? - ANSWER-C. Equal Credit
Opportunity Act
28. A property sold for $200,000 and was appraised at $180,000. The borrower
received a loan for $150,000. What is the loan-to-value? - ANSWER-B. 83.3 %
29. How many days does a lender have to send an adverse action notice? - ANSWER-
C. 30
30. The GFE/Loan Estimate must be mailed or given to the borrower within how many
days after receiving the signed application? - ANSWER-A. 3 business days
