SAFE-NMLS-MLO-CA Exam 2026
Questions and Answers
Fraud for profit is a complex scheme involving... - Correct Answer -multiple
parties,
including mortgage lending professionals, in a financially motivated
attempt to defraud the lender of large sums of money.
If a lender sells, transfers, or otherwise disposes of its interest in a mortgage and
does not service the mortgage, the lender shall... - Correct Answer -provide a copy
of the Closing Disclosure to the new owner or servicer of the mortgage as a part of
the transfer of the loan file.
Under the Home Equity Loan Consumer Protection Act of 1988, if the disclosed
terms change... - Correct Answer -the consumer can refuse to open the plan and is
entitled to a refund of fees paid in connection with the application.
The Right to Financial Privacy Act specifies that... - Correct Answer -before any
information is released to the federal government, certain procedures, exemptions,
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,limitations, and requirements concerning the release of customer financial records
must be met.
An Appraisal Report includes the... - Correct Answer -identity of the client and any
intended users (by name or type), the intended use of the appraisal, the real estate
involved, the real property interest appraised, the purpose of the appraisal, and
dates of the appraisal and of the report.
What are principles that lenders use to evaluate the risk of making real estate loans.
- Correct Answer -Underwriting guidelines (The guidelines are just that—
guidelines. They are flexible and vary according to loan program. If a borrower
makes a small down payment or has marginal credit, the guidelines are more rigid.)
One of the most obvious ways to classify loans is by their... - Correct Answer -
purpose—purchase, refinance, or
cash out.
Lenders classify loans by the type of... - Correct Answer -amortization—fixed-rate,
ARM, or GPM.
Any mortgage product other than a 30-year, fixed-rate mortgage is called a... -
Correct Answer -nontraditional mortgage
©COPYRIGHT 2025 ALL RIGHTS RESERVED 2
,The Panic of 1907 led to the passage of the... - Correct Answer -Federal Reserve
Act of 1913 that established the Federal Reserve System.
The Federal Trade Commission (FTC) was created in 1914 in an attempt to... -
Correct Answer -"bust up" trusts and break apart monopolies that discouraged
competition from smaller and less powerful businesses.
The two anti-trust laws in 1914 were the... - Correct Answer -Federal Trade
Commission Act and the Clayton Act.
In 1933, the Banking Act of 1933 (Glass-Steagall Act) was passed that... - Correct
Answer -separated commercial banking from investment banking.
What was passed to make housing
and home mortgages more affordable? - Correct Answer -The National Housing
Act of 1934
The National Housing Act of 1934 created the... - Correct Answer -Federal
Housing Administration (FHA), Federal Savings and Loan Insurance Corporation
(FSLIC) and the United States Housing Authority
The United States Housing Authority's intent is to... - Correct Answer -make low-
interest, long term loans to local public agencies for slum clearance and
construction of low-
©COPYRIGHT 2025 ALL RIGHTS RESERVED 3
, income dwellings.
The purpose of the Banking Act of 1935 was... - Correct Answer -"to provide for
the sound, effective,
and uninterrupted operation of the banking system."
Under the U.S. Housing Act of 1937 (Wagner-Steagall Act or the Low-Rent
Housing Act)... - Correct Answer -the federal government, through the Department
of Housing and Urban Development (HUD), provides subsidies to local public
housing agencies (PHAs) that rent housing to low-income families.
The stated purpose of each new law revolves around... - Correct Answer -safety,
sound practices, stability, confidence, etc. in the financial system being regulated.
Passed by congress in 1977, the Community Reinvestment Act
(CRA)... - Correct Answer -encourages regulated financial institutions to serve
their immediate community's needs.
Avoiding to lend in high-risk communities and neighborhoods is called... - Correct
Answer -Redlining
When a lending institution is recognized by the Federal Reserve, what are the three
basic requirements that must be met? - Correct Answer -(1) the institution must
draw a map that defines the community in which
©COPYRIGHT 2025 ALL RIGHTS RESERVED 4
Questions and Answers
Fraud for profit is a complex scheme involving... - Correct Answer -multiple
parties,
including mortgage lending professionals, in a financially motivated
attempt to defraud the lender of large sums of money.
If a lender sells, transfers, or otherwise disposes of its interest in a mortgage and
does not service the mortgage, the lender shall... - Correct Answer -provide a copy
of the Closing Disclosure to the new owner or servicer of the mortgage as a part of
the transfer of the loan file.
Under the Home Equity Loan Consumer Protection Act of 1988, if the disclosed
terms change... - Correct Answer -the consumer can refuse to open the plan and is
entitled to a refund of fees paid in connection with the application.
The Right to Financial Privacy Act specifies that... - Correct Answer -before any
information is released to the federal government, certain procedures, exemptions,
©COPYRIGHT 2025 ALL RIGHTS RESERVED 1
,limitations, and requirements concerning the release of customer financial records
must be met.
An Appraisal Report includes the... - Correct Answer -identity of the client and any
intended users (by name or type), the intended use of the appraisal, the real estate
involved, the real property interest appraised, the purpose of the appraisal, and
dates of the appraisal and of the report.
What are principles that lenders use to evaluate the risk of making real estate loans.
- Correct Answer -Underwriting guidelines (The guidelines are just that—
guidelines. They are flexible and vary according to loan program. If a borrower
makes a small down payment or has marginal credit, the guidelines are more rigid.)
One of the most obvious ways to classify loans is by their... - Correct Answer -
purpose—purchase, refinance, or
cash out.
Lenders classify loans by the type of... - Correct Answer -amortization—fixed-rate,
ARM, or GPM.
Any mortgage product other than a 30-year, fixed-rate mortgage is called a... -
Correct Answer -nontraditional mortgage
©COPYRIGHT 2025 ALL RIGHTS RESERVED 2
,The Panic of 1907 led to the passage of the... - Correct Answer -Federal Reserve
Act of 1913 that established the Federal Reserve System.
The Federal Trade Commission (FTC) was created in 1914 in an attempt to... -
Correct Answer -"bust up" trusts and break apart monopolies that discouraged
competition from smaller and less powerful businesses.
The two anti-trust laws in 1914 were the... - Correct Answer -Federal Trade
Commission Act and the Clayton Act.
In 1933, the Banking Act of 1933 (Glass-Steagall Act) was passed that... - Correct
Answer -separated commercial banking from investment banking.
What was passed to make housing
and home mortgages more affordable? - Correct Answer -The National Housing
Act of 1934
The National Housing Act of 1934 created the... - Correct Answer -Federal
Housing Administration (FHA), Federal Savings and Loan Insurance Corporation
(FSLIC) and the United States Housing Authority
The United States Housing Authority's intent is to... - Correct Answer -make low-
interest, long term loans to local public agencies for slum clearance and
construction of low-
©COPYRIGHT 2025 ALL RIGHTS RESERVED 3
, income dwellings.
The purpose of the Banking Act of 1935 was... - Correct Answer -"to provide for
the sound, effective,
and uninterrupted operation of the banking system."
Under the U.S. Housing Act of 1937 (Wagner-Steagall Act or the Low-Rent
Housing Act)... - Correct Answer -the federal government, through the Department
of Housing and Urban Development (HUD), provides subsidies to local public
housing agencies (PHAs) that rent housing to low-income families.
The stated purpose of each new law revolves around... - Correct Answer -safety,
sound practices, stability, confidence, etc. in the financial system being regulated.
Passed by congress in 1977, the Community Reinvestment Act
(CRA)... - Correct Answer -encourages regulated financial institutions to serve
their immediate community's needs.
Avoiding to lend in high-risk communities and neighborhoods is called... - Correct
Answer -Redlining
When a lending institution is recognized by the Federal Reserve, what are the three
basic requirements that must be met? - Correct Answer -(1) the institution must
draw a map that defines the community in which
©COPYRIGHT 2025 ALL RIGHTS RESERVED 4
