1
NMLS MLO Exam Questions with Answers (100%
Correct Answers)
What must a borrower do to avoid having late payments reported to a
credit bureau?— Answer: Pay within 30 days of due date
Max penalty if a borrower is required to use a specific title company or
settlement agent?— Answer: 3 times the fee
What should not be over-weighted in an analysis of borrower
repayment capacity?— Answer: Credit scores
Max prepayment penalty on residential mortgages in the first year of
the loan— Answer: 3%
What must condominium associations do with respect to property
insurance?— Answer: Keep a "blanket" policy that protects the entire
structure
If a lender is planning on referring a borrower to a title company that
the lender has ownership in, when must the AFBA must be provided
to the borrower?— Answer: Before the referral to the title company is
made
© 2025 All rights reserved
,2
Website to obtain copy of your credit report that the credit bureaus are
required to provide once per year at no charge— Answer:
annualcreditreport.com
2/3/6 caps— Answer: ARM initial adjustment max is 2%, subsequent
adjustment period max is 3%, and lifetime cap of 6%
What does FHLB stand for and what do they provide?— Answer:
Federal Home Loan Bank, and they provide advances to financial
institutions for residential mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by
the securitizer for a loan that does not meet QRM guidelines?—
Answer: 5%
On a purchase transaction, what document contains the purchase price
for a property?— Answer: Sales Contract
After a loan has been closed and funded, the creditor notices a
tolerance violation with a fee between the LE and CD. How long does
the creditor have to reimburse the borrower for the overcharge before
being considered in violation of the TRID rule?— Answer: 60 days
after closing
© 2025 All rights reserved
,3
According to the Dodd-Frank Act, how much risk must be retained by
the securitizer for a loan that does not meet QRM guidelines?—
Answer: 5%
Overt Discrimination— Answer: Refusing service to anyone of a
certain race, ethnicity, etc.
Under ECOA can you ask how many children a borrower has?—
Answer: No
What document specifies that a property is being used as security in
the event of nonpayment of a debt?— Answer: Mortgage
On the LE, which piece of data tells applicants how much they will be
paying in interest over the life of the loan as a percentage of the
loan?— Answer: TIP (Total Interest Percentage)
COFI comes from what region in the country?— Answer: The 11th
Federal Home Loan Bank (Arizona, California, and Nevada)
What disclosure is required to be provided to the applicant within 3
days of application under reg x?— Answer: Mortgage Loan Servicing
Disclosure
© 2025 All rights reserved
, 4
Verification of cash used in a closing is documented by:— Answer:
last 2-3 months bank statements
The finance charge is the total cost of:— Answer: the loan in dollars,
including points and mortgage insurance
What IRS forms would you requrest from a borrower who is 40%
shareholder in a C-Corporation?— Answer: Form 1120
Impersonating someone else in an attempt to obtain their personal
financial information is called:— Answer: Pretexting
What type of funding occurs when a lender obtains funds from a line
of credit at a commercial bank?— Answer: Warehouse funding
Late fee for FHA and VA loans— Answer: 4%
Ginnie Mae _____ loans— Answer: Guarantees
A mortgage on personal property is:— Answer: Chattel mortgage
Who can transfer title insurance policy?— Answer: Mortgagee
What document is NOT recorded?— Answer: The Note
The borrower's IOU is:— Answer: The Note
© 2025 All rights reserved
NMLS MLO Exam Questions with Answers (100%
Correct Answers)
What must a borrower do to avoid having late payments reported to a
credit bureau?— Answer: Pay within 30 days of due date
Max penalty if a borrower is required to use a specific title company or
settlement agent?— Answer: 3 times the fee
What should not be over-weighted in an analysis of borrower
repayment capacity?— Answer: Credit scores
Max prepayment penalty on residential mortgages in the first year of
the loan— Answer: 3%
What must condominium associations do with respect to property
insurance?— Answer: Keep a "blanket" policy that protects the entire
structure
If a lender is planning on referring a borrower to a title company that
the lender has ownership in, when must the AFBA must be provided
to the borrower?— Answer: Before the referral to the title company is
made
© 2025 All rights reserved
,2
Website to obtain copy of your credit report that the credit bureaus are
required to provide once per year at no charge— Answer:
annualcreditreport.com
2/3/6 caps— Answer: ARM initial adjustment max is 2%, subsequent
adjustment period max is 3%, and lifetime cap of 6%
What does FHLB stand for and what do they provide?— Answer:
Federal Home Loan Bank, and they provide advances to financial
institutions for residential mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by
the securitizer for a loan that does not meet QRM guidelines?—
Answer: 5%
On a purchase transaction, what document contains the purchase price
for a property?— Answer: Sales Contract
After a loan has been closed and funded, the creditor notices a
tolerance violation with a fee between the LE and CD. How long does
the creditor have to reimburse the borrower for the overcharge before
being considered in violation of the TRID rule?— Answer: 60 days
after closing
© 2025 All rights reserved
,3
According to the Dodd-Frank Act, how much risk must be retained by
the securitizer for a loan that does not meet QRM guidelines?—
Answer: 5%
Overt Discrimination— Answer: Refusing service to anyone of a
certain race, ethnicity, etc.
Under ECOA can you ask how many children a borrower has?—
Answer: No
What document specifies that a property is being used as security in
the event of nonpayment of a debt?— Answer: Mortgage
On the LE, which piece of data tells applicants how much they will be
paying in interest over the life of the loan as a percentage of the
loan?— Answer: TIP (Total Interest Percentage)
COFI comes from what region in the country?— Answer: The 11th
Federal Home Loan Bank (Arizona, California, and Nevada)
What disclosure is required to be provided to the applicant within 3
days of application under reg x?— Answer: Mortgage Loan Servicing
Disclosure
© 2025 All rights reserved
, 4
Verification of cash used in a closing is documented by:— Answer:
last 2-3 months bank statements
The finance charge is the total cost of:— Answer: the loan in dollars,
including points and mortgage insurance
What IRS forms would you requrest from a borrower who is 40%
shareholder in a C-Corporation?— Answer: Form 1120
Impersonating someone else in an attempt to obtain their personal
financial information is called:— Answer: Pretexting
What type of funding occurs when a lender obtains funds from a line
of credit at a commercial bank?— Answer: Warehouse funding
Late fee for FHA and VA loans— Answer: 4%
Ginnie Mae _____ loans— Answer: Guarantees
A mortgage on personal property is:— Answer: Chattel mortgage
Who can transfer title insurance policy?— Answer: Mortgagee
What document is NOT recorded?— Answer: The Note
The borrower's IOU is:— Answer: The Note
© 2025 All rights reserved
