MLO Practice Test| 100 QUESTIONS| WITH COMPLETE SOLUTIONS

An Approve/Eligible determination: 1. Is an indication that a property appraised for its sales price 2. Authorization to release funds in a refinance transaction 3. An automated loan approval from the Fannie Mae Du system 4. A recommendation that is received by the Freddie Mac loan prospector automated underwriting system. Correct Answer: 3. An automated loan approval from the Fannie Mae Du system.. this means that the borrower meets the credit requirements and all other loan factors are acceptable. The LP recommendations are mostly one word answers and the equivalent recommendation under LP would be Accept. If a lender agrees to subordinate a loan, what has occurred? 1. The borrower has a first and second and has refinanced the first. 2. The loan has been denied 3. The second has been paid off 4. The borrower is in foreclosure Correct Answer: 1. The borrower has a first and second and has refinanced the first...when the borrowed refinanced a first and there is an existing second the second becomes the first when the old loan is paid off. To avoid this from happening the second position lender will subordinate and remain in second position. Which of the following are you permitted to ask loan applicants under the fair lending laws? 1. Their race 2. Their religion 3. If they plan to have additional children 4. Will they continue to work after they have children Correct Answer: 1. Their race, a HMDA requirement. The National Credit Score Disclosure Form provides the following: 1. Statement that the credit score determines loan approval 2. Four reason codes for the credit score 3. A reason for the loan approval status 4. The reason for the loan denial Correct Answer: 2. Four reason codes for the credit score. The income approach used in valuing property during an appraisal considers the following: 1. The replacement cost of the property 2. The average meridian income levwels of the community 3. The fair market rental earnings of similar homes 4. The qualifying income potential borrowers Correct Answer: 3. The fair market rental earnings of similar homes A mortgage broker decides to solicit business from a previous customer who closed on a home purchase. Which action could result in a $16,000 fine? 1. Contacting the customer 17 months after the purc