SAFE MLO EXAM 3 PRACTICE QUESTIONS &
ANSWERS
After the crisis of the Great Recession according to Conventional underwriting when can
a borrower repurchase again after a short sale?
5 years from the credit report date
3 years from the credit report date
4 years from the credit report date
7 years from the credit report date
4 years from the credit report date
In order to meet the pre-licensing education requirement, a person shall complete at
least 20 hours of approved education. Which of the following is NOT included in the
minimum educational requirements?
3 hours of Federal law and regulations
2 hours of training related to predatory lending laws
2 hours of training related to nontraditional mortgage products
3 hours of ethics training
The SAFE Act requires
20 hours of pre-licensing education including
3 hours of federal law,
3 hours on ethics and
2 hours on nontraditional mortgage products.
The remaining hours are elective hours.
Trevor is looking to obtain an ARM loan, his MLO is required to disclose what within 3
days of application?
The Home Loan Toolkit
The Goodbye Letter
The Closing Disclosures
The Consumer Handbook on Adjustable Rate Mortgages
Per TILA, the Consumer Handbook on Adjustable Rate Mortgages must be disclosed
within 3 business days of a application on all ARM transactions.
, Q12:
After the crisis of the Great Recession according to Conventional underwriting when can
a borrower repurchase again after a Chapter 7 bankruptcy?
5 years from the discharge date
4 years from the discharge date
7 years from the discharge date
2 years from the discharge date
Borrowers must wait 4 years from a Chapter 7 bankruptcy to apply for conventional
financing.
Q36:
In qualifying the income of a sole proprietor borrower, the originator should consider
which of the following to be most important?
Schedule C net income plus non-cash expenses and depreciation
Expenses reported on Form 2106
Schedule C net income
Form 1040 adjusted gross income
Usually when determining sole proprietor income, you're going to use the net income to
add things back in like depletion and depreciation and subtract meals and
entertainment.
Q40:
If the APR on a fixed rate loan increases from the initially disclosed rate by more than
what, an additional waiting period is triggered before the loan can close?
.250 percent
.125 percent
.500 percent
.375 percent
If the APR goes up by more than 1/8th of a percent (.125) there is a new waiting period
triggered per TRID.
Q43:
Which of the following is NOT a finance charge in a residential mortgage loan?
Loan origination fee
Mortgage broker fee
Appraisal fee
Mortgage insurance premium
A finance charge is a cost of credit.
ANSWERS
After the crisis of the Great Recession according to Conventional underwriting when can
a borrower repurchase again after a short sale?
5 years from the credit report date
3 years from the credit report date
4 years from the credit report date
7 years from the credit report date
4 years from the credit report date
In order to meet the pre-licensing education requirement, a person shall complete at
least 20 hours of approved education. Which of the following is NOT included in the
minimum educational requirements?
3 hours of Federal law and regulations
2 hours of training related to predatory lending laws
2 hours of training related to nontraditional mortgage products
3 hours of ethics training
The SAFE Act requires
20 hours of pre-licensing education including
3 hours of federal law,
3 hours on ethics and
2 hours on nontraditional mortgage products.
The remaining hours are elective hours.
Trevor is looking to obtain an ARM loan, his MLO is required to disclose what within 3
days of application?
The Home Loan Toolkit
The Goodbye Letter
The Closing Disclosures
The Consumer Handbook on Adjustable Rate Mortgages
Per TILA, the Consumer Handbook on Adjustable Rate Mortgages must be disclosed
within 3 business days of a application on all ARM transactions.
, Q12:
After the crisis of the Great Recession according to Conventional underwriting when can
a borrower repurchase again after a Chapter 7 bankruptcy?
5 years from the discharge date
4 years from the discharge date
7 years from the discharge date
2 years from the discharge date
Borrowers must wait 4 years from a Chapter 7 bankruptcy to apply for conventional
financing.
Q36:
In qualifying the income of a sole proprietor borrower, the originator should consider
which of the following to be most important?
Schedule C net income plus non-cash expenses and depreciation
Expenses reported on Form 2106
Schedule C net income
Form 1040 adjusted gross income
Usually when determining sole proprietor income, you're going to use the net income to
add things back in like depletion and depreciation and subtract meals and
entertainment.
Q40:
If the APR on a fixed rate loan increases from the initially disclosed rate by more than
what, an additional waiting period is triggered before the loan can close?
.250 percent
.125 percent
.500 percent
.375 percent
If the APR goes up by more than 1/8th of a percent (.125) there is a new waiting period
triggered per TRID.
Q43:
Which of the following is NOT a finance charge in a residential mortgage loan?
Loan origination fee
Mortgage broker fee
Appraisal fee
Mortgage insurance premium
A finance charge is a cost of credit.
