NMLS SAFE 2026 EXAM REVIEW WITH
COMPLETE QUESTIONS AND CORRECT
ANSWERS GRADED A+
(D) wait to see if there is anymore suspicious activity Correct
Answer An MLO takes an application and becomes suspicious of
the applicants Soc Sec. #; what should the MLO do?
(A) contact the police
(B) deny loan
(C) call soc sec admin and verify Soc Sec #
(D) wait to see if there is anymore suspicious activity
B). A Liability Correct Answer A young couple is applying for a
loan for a new home purchase. A portion of their down payment is
a loan from a Grandparent for $25,000. The money was already
given to them and placed in their account three months prior to
the loan application. The loan payments won't start for one year,
how should the $25,000 be reported on the mortgage application?
A. Asset
B. A Liability
C. Gift of funds
D. Not reported at all
,A.) Ignore the situation as it may be a family matter Correct
Answer What action should an MLO take if during a refinance
involving a mother and son the MLO gets the feeling the mother is
hesitant about the refinance?
a.) Ignore the situation as it may be a family matter
b.) Pull the mother aside to discuss
c.) Refer the transaction to the AML department
d.) Pull the son aside to discuss
D.)Terminate both Correct Answer MLO went on a vacation and
had her LOA meet with her client. When the MLO came back it
was found that the LOA was signing documents as the MLO,
turns out this practice was happening often and with MLO's
permission. What should be done?
a.Terminate the LO
b.)Terminate LOA
c.)Report to authorities
d.)Terminate both
C.) Ask the borrower to obtain a statement of terms Correct
Answer A borrower applies for a loan and while in process notifies
the MLO they have just financed the purchase of a car for their
daughter who plans to make the payments. The payments do not
,show on the borrower's current credit report. What action should
the MLO take?
a. Don't report the information since it is not on credit
b. Advise the UW and let them handle it
c. Ask the borrower to obtain a statement of terms
d. Turn the loan down
Fraud for profit - think insider
Fraud for housing - think consumer Correct Answer 2 types of
fraud:
B.) The applicants currently own & live in a property in the same
neighborhood as the property for the loan Correct Answer Which
of the following could be an indication of possible fraud on an
application for an owner occupied purchase transaction?
a. The applicants currently live with their parents
b. The applicants currently own & live in a property in the same
neighborhood as the property for the loan
c. The property is out of state
d. There are 4 applicants on the application
Property Flipping Correct Answer Usually involves an appraiser
and a group of people who buy and resell to each other at
inflated prices and ultimately to another person.
, Air Loan Correct Answer A loan on a fictitious home that does not
exist on the land
C.) Stated Loans Correct Answer Which is not an example of
fraud?
a. shot gunning
b. straw buyer
c- stated loans
d- silent seconds
c.) If sufficient use the income on the tax return Correct Answer A
borrower who is employed as a waiter applied for a mortgage
loan. He told the MLO that he did not report all his tip income on
his tax return. What step should the MLO take ?
a.) Contact the employer to verify the tip income
b.) Tell the borrower to re-do his taxes correctly
c.) If sufficient use the income on the tax return
d.) Use the tip income anyway
b.) Ask the borrower if they have undeclared assets Correct
Answer The client's appraisal comes in lower than expected
causing the borrower to bring $10,000 to the closing to complete
COMPLETE QUESTIONS AND CORRECT
ANSWERS GRADED A+
(D) wait to see if there is anymore suspicious activity Correct
Answer An MLO takes an application and becomes suspicious of
the applicants Soc Sec. #; what should the MLO do?
(A) contact the police
(B) deny loan
(C) call soc sec admin and verify Soc Sec #
(D) wait to see if there is anymore suspicious activity
B). A Liability Correct Answer A young couple is applying for a
loan for a new home purchase. A portion of their down payment is
a loan from a Grandparent for $25,000. The money was already
given to them and placed in their account three months prior to
the loan application. The loan payments won't start for one year,
how should the $25,000 be reported on the mortgage application?
A. Asset
B. A Liability
C. Gift of funds
D. Not reported at all
,A.) Ignore the situation as it may be a family matter Correct
Answer What action should an MLO take if during a refinance
involving a mother and son the MLO gets the feeling the mother is
hesitant about the refinance?
a.) Ignore the situation as it may be a family matter
b.) Pull the mother aside to discuss
c.) Refer the transaction to the AML department
d.) Pull the son aside to discuss
D.)Terminate both Correct Answer MLO went on a vacation and
had her LOA meet with her client. When the MLO came back it
was found that the LOA was signing documents as the MLO,
turns out this practice was happening often and with MLO's
permission. What should be done?
a.Terminate the LO
b.)Terminate LOA
c.)Report to authorities
d.)Terminate both
C.) Ask the borrower to obtain a statement of terms Correct
Answer A borrower applies for a loan and while in process notifies
the MLO they have just financed the purchase of a car for their
daughter who plans to make the payments. The payments do not
,show on the borrower's current credit report. What action should
the MLO take?
a. Don't report the information since it is not on credit
b. Advise the UW and let them handle it
c. Ask the borrower to obtain a statement of terms
d. Turn the loan down
Fraud for profit - think insider
Fraud for housing - think consumer Correct Answer 2 types of
fraud:
B.) The applicants currently own & live in a property in the same
neighborhood as the property for the loan Correct Answer Which
of the following could be an indication of possible fraud on an
application for an owner occupied purchase transaction?
a. The applicants currently live with their parents
b. The applicants currently own & live in a property in the same
neighborhood as the property for the loan
c. The property is out of state
d. There are 4 applicants on the application
Property Flipping Correct Answer Usually involves an appraiser
and a group of people who buy and resell to each other at
inflated prices and ultimately to another person.
, Air Loan Correct Answer A loan on a fictitious home that does not
exist on the land
C.) Stated Loans Correct Answer Which is not an example of
fraud?
a. shot gunning
b. straw buyer
c- stated loans
d- silent seconds
c.) If sufficient use the income on the tax return Correct Answer A
borrower who is employed as a waiter applied for a mortgage
loan. He told the MLO that he did not report all his tip income on
his tax return. What step should the MLO take ?
a.) Contact the employer to verify the tip income
b.) Tell the borrower to re-do his taxes correctly
c.) If sufficient use the income on the tax return
d.) Use the tip income anyway
b.) Ask the borrower if they have undeclared assets Correct
Answer The client's appraisal comes in lower than expected
causing the borrower to bring $10,000 to the closing to complete
