MLO SAFE NMLS Safe test Practice
Questions & Verified Answers 100%
Predatory Lending. - correct answer ✔✔Taking advantage of ill-informed consumers through
excessively high fees, misrepresented loan terms, frequent refinancing that does not benefit the
borrower and other prohibited acts is called __________________________.
The Federal Statute that deals with the settlement of residential mortgage loans. - correct
answer ✔✔RESPA-Real Estate Settlement Procedures Act
Home sellers from requiring home buyers to purchase title insurance from a particular company
providing title services. - correct answer ✔✔RESPA's section 9 Prohibits
upon completion and 3 business days - correct answer ✔✔The Dodd-Frank Act modifies ECOA
to require a creditor to furnish a copy of an appraisal developed in connection with a first
mortgage_____________________ and absolutely not later than ________ business days prior
to closing.
Per the Dodd Frank Act, a single disclosure form combines these 2 statements. - correct answer
✔✔TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate)
3% (three percent) - correct answer ✔✔Per the Dodd-Frank Acvt, to be a "qualified mortgage"
total points and fees may not exceed ________% of the total loan amount.
All loans, whether owner occupied or not. - correct answer ✔✔Per a provision of the Dodd-
Frank Act mortgage lenders are to determine that a borrower has a reasonable ability to repay a
loan. Does this provision apply to all loans or just owner occupied loans?
,2 (two) years - correct answer ✔✔A loan subject to HOEPA allows prepayment penalties for the
first ______ years of the loan.
All three would be considered abusive acts. - correct answer ✔✔Per the Dodd-Frank Act an
abusive act would include which of the following:
1. One that materially interferes with the consumers ability to understand the product or
service.
2. One that take unreasonable advantage of a consumers' lack of understanding.
3. One that takes unreasonable advantage of the consumer's reasonable reliance on the MLO.
$0.00, dual compensation is not allowed. Compensation must be borrower paid or lender paid. -
correct answer ✔✔Per the Dodd-Frank Act if an MLO receives compensation directly from a
consumer, up to how much additional compensation may be received from a lender in the same
transaction?
Specific reasons. - correct answer ✔✔What kinds of reasons are necessary for a lender to take
adverse action with regard to a borrower?
A denial or revocation of credit. Also, a change in the terms of an existing credit arrangement or
a refusal to grant credit in substantially the amount or terms requested. - correct answer
✔✔Adverse action means ______________________.
25 Months - correct answer ✔✔Per Regulation B, Lenders should retain certain records for
_____________ months.
APOR ( Average Prime Offer Rate), 8.5% - correct answer ✔✔Because of the impact of the
Dodd-Frank Act on a second mortgage, an APR that exceeds the ________ by more than _____
% is the trigger that defines a high cost loan.
,HMDA, The Home Mortgage Disclosure Act. - correct answer ✔✔Regulation C is known as
________________________.
The HMDA determines whether financial institutions are serving the housing needs of their
communities. It also identifies patterns of discriminatory lending. - correct answer ✔✔What is
the purpose of HMDA?
If there are no kickback or referral fees and the service provider is an attorney, credit reporting
agency or appraiser the lender can require that the borrower uses the provider - correct answer
✔✔Under what circumstances can a lender with an Affiliated Business Arrangement require a
borrower to use a specific third party service provider?
Servicer, 15 (fifteen) days. - correct answer ✔✔If a transfer of servicing occurs, the
_______________ must provide a servicing transfer statement not less than ________ days
before the transfer occurs.
6 (Six) Months - correct answer ✔✔An individual who fails the MLO written exam 3 times must
wait _________ months to retake the exam.
determine shortages and surpluses in the escrow account. - correct answer ✔✔Per RESPA, an
annual escrow statement is required to ______________.
Within 3 (three) Business Days of the Application. - correct answer ✔✔When must the Servicing
Disclosure Statement be provided to the borrower?
$1,000,000 (one million dollars), 30 years in prison - correct answer ✔✔Any party involved in a
federally covered loan that submits fraudulent information is subject to a fine of up to
$___________ and up to __________years in prison.
, 1/6th (2 months), $50 (fifty dollars), 30 (thirty) days. - correct answer ✔✔Per RESPA, an escrow
cushion is limited to a maximum of _________ of the annual payments and surpluses over
$_____must be refunded within ________ days.
$100,000 + interest for the last month. A straight note (term mortgage) is a non-amortizing
interest only mortgage. The balloon would include the entire principal plus the last month's
interest, as interest is paid in arrears. - correct answer ✔✔A seller takes back a $100,000 PMM
@ 5.5% interest. This straight note will balloon after 10 years of payments. How much is the
balloon payment?
28%, maximum housing expense/36% maximum total obligations - correct answer ✔✔FNMA
conforming debt ratios equal ______/________.
Home Ownership and Equity Protection Act. - correct answer ✔✔HOEPA stands for
___________________________.
1-4 Unit Residential Properties - correct answer ✔✔RESPA applies to what type of properties?
The Underwriter - correct answer ✔✔On a conventional mortgage loan, who makes the final
decision regarding approval, denial or counter offer?
The Civil Rights Act of 1968, also known as Title VIII of the Civil Rights Act , Also known as Title
VIII, Also Known as The Fair Housing Act - correct answer ✔✔The Civil Rights Act of 1866,
prohibited public and private racial discrimination in any property transaction and was
expanded in 1968 in which act?
The note rate is NOT required. - correct answer ✔✔Of the following, which is not required to be
disclosed on the TIL statement? The (1) APR, (2) Note Rate, (3) Finance Charge, (4) Amount
Financed or (5) Total of Payments
Questions & Verified Answers 100%
Predatory Lending. - correct answer ✔✔Taking advantage of ill-informed consumers through
excessively high fees, misrepresented loan terms, frequent refinancing that does not benefit the
borrower and other prohibited acts is called __________________________.
The Federal Statute that deals with the settlement of residential mortgage loans. - correct
answer ✔✔RESPA-Real Estate Settlement Procedures Act
Home sellers from requiring home buyers to purchase title insurance from a particular company
providing title services. - correct answer ✔✔RESPA's section 9 Prohibits
upon completion and 3 business days - correct answer ✔✔The Dodd-Frank Act modifies ECOA
to require a creditor to furnish a copy of an appraisal developed in connection with a first
mortgage_____________________ and absolutely not later than ________ business days prior
to closing.
Per the Dodd Frank Act, a single disclosure form combines these 2 statements. - correct answer
✔✔TIL (Truth In Lending Disclosure) & GFE (Good Faith Estimate)
3% (three percent) - correct answer ✔✔Per the Dodd-Frank Acvt, to be a "qualified mortgage"
total points and fees may not exceed ________% of the total loan amount.
All loans, whether owner occupied or not. - correct answer ✔✔Per a provision of the Dodd-
Frank Act mortgage lenders are to determine that a borrower has a reasonable ability to repay a
loan. Does this provision apply to all loans or just owner occupied loans?
,2 (two) years - correct answer ✔✔A loan subject to HOEPA allows prepayment penalties for the
first ______ years of the loan.
All three would be considered abusive acts. - correct answer ✔✔Per the Dodd-Frank Act an
abusive act would include which of the following:
1. One that materially interferes with the consumers ability to understand the product or
service.
2. One that take unreasonable advantage of a consumers' lack of understanding.
3. One that takes unreasonable advantage of the consumer's reasonable reliance on the MLO.
$0.00, dual compensation is not allowed. Compensation must be borrower paid or lender paid. -
correct answer ✔✔Per the Dodd-Frank Act if an MLO receives compensation directly from a
consumer, up to how much additional compensation may be received from a lender in the same
transaction?
Specific reasons. - correct answer ✔✔What kinds of reasons are necessary for a lender to take
adverse action with regard to a borrower?
A denial or revocation of credit. Also, a change in the terms of an existing credit arrangement or
a refusal to grant credit in substantially the amount or terms requested. - correct answer
✔✔Adverse action means ______________________.
25 Months - correct answer ✔✔Per Regulation B, Lenders should retain certain records for
_____________ months.
APOR ( Average Prime Offer Rate), 8.5% - correct answer ✔✔Because of the impact of the
Dodd-Frank Act on a second mortgage, an APR that exceeds the ________ by more than _____
% is the trigger that defines a high cost loan.
,HMDA, The Home Mortgage Disclosure Act. - correct answer ✔✔Regulation C is known as
________________________.
The HMDA determines whether financial institutions are serving the housing needs of their
communities. It also identifies patterns of discriminatory lending. - correct answer ✔✔What is
the purpose of HMDA?
If there are no kickback or referral fees and the service provider is an attorney, credit reporting
agency or appraiser the lender can require that the borrower uses the provider - correct answer
✔✔Under what circumstances can a lender with an Affiliated Business Arrangement require a
borrower to use a specific third party service provider?
Servicer, 15 (fifteen) days. - correct answer ✔✔If a transfer of servicing occurs, the
_______________ must provide a servicing transfer statement not less than ________ days
before the transfer occurs.
6 (Six) Months - correct answer ✔✔An individual who fails the MLO written exam 3 times must
wait _________ months to retake the exam.
determine shortages and surpluses in the escrow account. - correct answer ✔✔Per RESPA, an
annual escrow statement is required to ______________.
Within 3 (three) Business Days of the Application. - correct answer ✔✔When must the Servicing
Disclosure Statement be provided to the borrower?
$1,000,000 (one million dollars), 30 years in prison - correct answer ✔✔Any party involved in a
federally covered loan that submits fraudulent information is subject to a fine of up to
$___________ and up to __________years in prison.
, 1/6th (2 months), $50 (fifty dollars), 30 (thirty) days. - correct answer ✔✔Per RESPA, an escrow
cushion is limited to a maximum of _________ of the annual payments and surpluses over
$_____must be refunded within ________ days.
$100,000 + interest for the last month. A straight note (term mortgage) is a non-amortizing
interest only mortgage. The balloon would include the entire principal plus the last month's
interest, as interest is paid in arrears. - correct answer ✔✔A seller takes back a $100,000 PMM
@ 5.5% interest. This straight note will balloon after 10 years of payments. How much is the
balloon payment?
28%, maximum housing expense/36% maximum total obligations - correct answer ✔✔FNMA
conforming debt ratios equal ______/________.
Home Ownership and Equity Protection Act. - correct answer ✔✔HOEPA stands for
___________________________.
1-4 Unit Residential Properties - correct answer ✔✔RESPA applies to what type of properties?
The Underwriter - correct answer ✔✔On a conventional mortgage loan, who makes the final
decision regarding approval, denial or counter offer?
The Civil Rights Act of 1968, also known as Title VIII of the Civil Rights Act , Also known as Title
VIII, Also Known as The Fair Housing Act - correct answer ✔✔The Civil Rights Act of 1866,
prohibited public and private racial discrimination in any property transaction and was
expanded in 1968 in which act?
The note rate is NOT required. - correct answer ✔✔Of the following, which is not required to be
disclosed on the TIL statement? The (1) APR, (2) Note Rate, (3) Finance Charge, (4) Amount
Financed or (5) Total of Payments
