MLO SAFE Test 2024 Exam Questions With 100% Correct Answers

MLO SAFE Test 2024 Exam Questions With 100% Correct Answers Dodd-Frank - answer- Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 - Changed oversight & capitalization of financial institutions, added licensing an education standards, and limited riskier products in the marketplace - Established the CFPB - Defined and specifically outlawed UDAAPs CFPB - answer- Consumer Financial Protection Bureau - The Bureau - Oversees and enforces Dodd-Frank specifically to protect consumers from UDAAPs UDAAPs - answer- Unfair, Deceptive, or Abusive Acts or Practices - Unfair: Activities that cause injury (financial harm) to consumer - Deceptive: Activities where the MLO intends (or does) lie to or mislead the consumer - Abusive: Activities where the MLO takes advantage of their position to confuse the consumer MLO - answer- Mortgage Loan Originator - Takes residential mortgage loan applications, offers or negotiates rates or terms for compensation or gain Mortgage Broker - answer- Loan originators who work independently of lenders - Originate mortgages then shops for a lender - Matchmaker between customer and lender Lender - answer- A person or company that makes loans for real estate Processor - answer- Works for a MLO and provides clerical functions collecting documents and verifying information - Not licensed, not allowed to negotiate rates and terms Underwriter - answer- Works for a MLO and reviews loan applications to determine risk to the lender - Not licensed, not allowed to negotiate rates and terms Appraiser - answer- Independent of the MLO - Provides service of determining the property value Title Agent - answer- Independent of the MLO - Researches ownership (title) on the property - Offers title insurance - Also called abstractors Real Estate Agent - answer- Independent party - Works on behalf of either buyer or seller in a purchase transaction Investor - answer- Person or organization that puts money in to financial arrangements with the expectation of making a profit Regulator - answer- Person or institution that supervises or controls a financial system in order to guarantee fair and efficient markets and promote financial stability Consumer - answer- Individual who may obtain financial services - Shopping (no commitments) Customer - answer- Individual in an ongoing process or relationship with a financial services provider (also called Client by Rocket Pro) - Legal term 4 Cs - answer- Credit - Capacity - Cash - Collateral Credit - answer- Ability to keep up with payments - Financial character - Account and payment history and credit score - Requires permissible purpose to pull credit report Capacity - answer- Ability to repay loan - Income vs debt obligations (monthly bills obligated to pay) - Debt to Income (DTI) Cash - answer- Liquid assets available to cover shortfalls - Ability to come to closing for downpayment and closing costs Collateral - answer- The property value pledged as security for the loan - Loan to Value (LTV) Pre-Applications - answer- Borrower (customer) considers shopping for a mortgage (may seek out reccomendations) - MLO advertises Application - answer- Credit verified (credit report pulled for a real & valid reason: requires permissible purpose) - Application collected (ALIENS) - MLO matches borrower with product (tangible net benefit) - Loan Estimate (LE) shared - In order to proceed, customer gives Intent to Proceed Processing - answer- MLO collects supporting documentation from customer - Paystubs - W-2s - IRS Tax Transcript 4506-C - Bank Statements - Investment Portfolio - Other Assets Underwriting - answer- Capacity - Ability to pay for mortgage in addition to other debts - DTI and employment verified - Cash - Able to bring down paymnet and closing costs to the table