NMLS MLO EXAM QUESTIONS WITH
100% CORRECT ANSWERS
\.What must a borrower do to avoid having late payments reported to a credit
bureau? - ANSWERS-Pay within 30 days of due date
\.Max penalty if a borrower is required to use a specific title company or
settlement agent? - ANSWERS-3 times the fee
\.What should not be over-weighted in an analysis of borrower repayment
capacity? - ANSWERS-Credit scores
\.Max prepayment penalty on residential mortgages in the first year of the loan -
ANSWERS-3%
\.What must condominium associations do with respect to property insurance? -
ANSWERS-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? -
ANSWERS-Before the referral to the title company is made
\.Website to obtain copy of your credit report that the credit bureaus are required
to provide once per year at no charge - ANSWERS-annualcreditreport.com
,\.2/3/6 caps - ANSWERS-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? - ANSWERS-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? - ANSWERS-5%
\.On a purchase transaction, what document contains the purchase price for a
property? - ANSWERS-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? - ANSWERS-60 days after closing
\.According to the Dodd-Frank Act, how much risk must be retained by the
securitizer for a loan that does not meet QRM guidelines? - ANSWERS-5%
\.Overt Discrimination - ANSWERS-Refusing service to anyone of a certain race,
ethnicity, etc.
\.Under ECOA can you ask how many children a borrower has? - ANSWERS-No
, \.What document specifies that a property is being used as security in the event of
nonpayment of a debt? - ANSWERS-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? - ANSWERS-TIP (Total
Interest Percentage)
\.COFI comes from what region in the country? - ANSWERS-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? - ANSWERS-Mortgage Loan Servicing Disclosure
\.Verification of cash used in a closing is documented by: - ANSWERS-last 2-3
months bank statements
\.The finance charge is the total cost of: - ANSWERS-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? - ANSWERS-Form 1120
\.Impersonating someone else in an attempt to obtain their personal financial
information is called: - ANSWERS-Pretexting
100% CORRECT ANSWERS
\.What must a borrower do to avoid having late payments reported to a credit
bureau? - ANSWERS-Pay within 30 days of due date
\.Max penalty if a borrower is required to use a specific title company or
settlement agent? - ANSWERS-3 times the fee
\.What should not be over-weighted in an analysis of borrower repayment
capacity? - ANSWERS-Credit scores
\.Max prepayment penalty on residential mortgages in the first year of the loan -
ANSWERS-3%
\.What must condominium associations do with respect to property insurance? -
ANSWERS-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? -
ANSWERS-Before the referral to the title company is made
\.Website to obtain copy of your credit report that the credit bureaus are required
to provide once per year at no charge - ANSWERS-annualcreditreport.com
,\.2/3/6 caps - ANSWERS-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? - ANSWERS-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? - ANSWERS-5%
\.On a purchase transaction, what document contains the purchase price for a
property? - ANSWERS-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? - ANSWERS-60 days after closing
\.According to the Dodd-Frank Act, how much risk must be retained by the
securitizer for a loan that does not meet QRM guidelines? - ANSWERS-5%
\.Overt Discrimination - ANSWERS-Refusing service to anyone of a certain race,
ethnicity, etc.
\.Under ECOA can you ask how many children a borrower has? - ANSWERS-No
, \.What document specifies that a property is being used as security in the event of
nonpayment of a debt? - ANSWERS-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? - ANSWERS-TIP (Total
Interest Percentage)
\.COFI comes from what region in the country? - ANSWERS-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? - ANSWERS-Mortgage Loan Servicing Disclosure
\.Verification of cash used in a closing is documented by: - ANSWERS-last 2-3
months bank statements
\.The finance charge is the total cost of: - ANSWERS-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? - ANSWERS-Form 1120
\.Impersonating someone else in an attempt to obtain their personal financial
information is called: - ANSWERS-Pretexting
