Halloween Special 70% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: clap70

MLO Mortgage Loan Origination (SAFE MLO) Exam Questions and Answers

Questions 4

An appraiser agrees to give a mortgage loan originator (MLO) half of her appraisal fees in return for the MLO's future business. This illegal practice is known as:

Options:

A.

redlining.

B.

fee splitting.

C.

blockbusting.

D.

paying it forward.

Buy Now
Questions 5

According to Regulation Z, which of the following is a prohibited act?

Options:

A.

Including undocumented child support payments made by the borrower

B.

Issuing disclosures to applicants

C.

Redisclosing a Loan Estimate immediately after locking the rate

D.

Advertising rates not currently available to applicants

Buy Now
Questions 6

Which of the following types of income are considered as qualifying when applying for a mortgage loan?

Options:

A.

Reimbursed expenses

B.

Net rental income

C.

Family gifts

D.

Federal tax refund

Buy Now
Questions 7

A mortgage loan originator (MLO) originates a 5/1 ARM where the indexed rate is likely to be higher than the introductory rate. The Truth in Lending Act (TILA) states that an MLO must calculate a borrower's monthly Payment amount based on which of the following?

Options:

A.

Payment amount during the fixed introductory period

B.

An average of the varying payment amounts over the life of the loan

C.

The total amount of the payments

D.

Fully indexed rate of the loan

Buy Now
Questions 8

During the loan application process, which of the following documents specifies the time period that a mortgage lender agrees to hold the mortgage interest rate at a certain percentage?

Options:

A.

Loan application

B.

Preapproval letter

C.

Closing Disclosure

D.

Rate lock agreement

Buy Now
Questions 9

Which of the following property value approaches does an appraiser use on a rental property?

Options:

A.

Cost approach

B Income approach

B.

Annual approach

C.

Sales comparison approach

Buy Now
Questions 10

A mortgage loan originator (MLO) received a salary of 1% per loan plus a bonus of $5,000 for closing the most loans in the office last year. In addition, he received a trip to Hawaii based on closing 100 or more transactions with an interest rate of 5% or higher. Is the MLO's compensation prohibited?

Options:

A.

His compensation is permitted as compensation only includes salary and his salary is not based on loan terms.

B.

His compensation is permitted as compensation only includes salary and bonuses and his salary and bonus is not based on loan terms.

C.

His compensation is not permitted as compensation only includes salary and his salary is based on loan terms.

D.

His compensation is not permitted as compensation includes all financial incentives and his trip was awarded based on closing the most loans with certain loan terms.

Buy Now
Questions 11

During the closing the borrower notices that the interest rate increased from 3.250% to 3.875%. The lender must:

Options:

A.

tell the borrower to close the loan.

B.

close the loan, then re-disclose after the loan funds.

C.

postpone the closing, re-disclose and wait three days.

D.

postpone the closing, re-disclose and wait three business days.

Buy Now
Questions 12

The appraiser valuation independence obligates appraisers to perform their duties in a manner free from outside influence through which of the following actions?

Options:

A.

Encouraging a target value

B.

Withholding payment from an appraiser

C.

Asking the appraiser to substantiate a value

D.

Communication directly between the loan officer and the appraiser

Buy Now
Questions 13

Which of the following entities is the primary regulatory authority for state-licensed, non-depository lenders?

Options:

A.

NMLS

B.

The Federal Trade Commission

C.

A state regulator

D.

The Conference of State Bank Supervisors

Buy Now
Questions 14

A borrower's monthly debt-to-income ratio is calculated by taking the:

Options:

A.

borrower's gross monthly housing expense divided by the principal, interest, and appraised value.

B.

eligible total monthly debt obligations, including the monthly housing expense, divided by the borrower's gross monthly income.

C.

eligible total monthly debt obligations for trade lines greater than 12 months multiplied by the borrower's net monthly income.

D eligible total monthly debt obligations excluding the monthly housing expense divided by the borrower's net monthly income

Buy Now
Questions 15

Under the TILA-RESPA Integrated Disclosure rule (TRID), what is the minimum time period that must pass between a borrower's receipt of a Loan Estimate and the closing of a mortgage loan?

Options:

A.

7 business days

B.

15 business days

C.

30 business days

D.

45 calendar days

Buy Now
Questions 16

Which of the following fees is a finance charge?

Options:

A.

A notary fee

B.

An origination fee

C.

An appraisal fee

D.

A late payment fee

Buy Now
Questions 17

An easement:

Options:

A.

is a mortgage modification.

B.

is a right to cross or otherwise use someone else's land for a specified purpose.

C.

allows a loan applicant to close on a loan even if all the stipulations have not been met.

D.

allows a borrower to make less than the required payments without going through a full mortgage modification.

Buy Now
Questions 18

Which of the following loan types is regulated by the Home Ownership and Equity Protection Act (HOEPA)?

Options:

A.

Refinance

B.

Construction

C.

Reverse mortgage

D.

USDA Rural Development

Buy Now
Questions 19

Non-qualified mortgages offer more options for borrowers who:

Options:

A.

are unemployed.

B.

are self-employed.

C.

have no down payment.

D.

are currently living with their parents.

Buy Now
Questions 20

Which of the following circumstances may indicate fraud with respect to the assets a borrower will use for closing?

Options:

A.

Bank deposits that are not supported by income or other disclosures

B.

Disclosure of gift funds

C.

Parental loans disclosed but not yet received

D.

Borrower's receipt of a large bonus from an employer

Buy Now
Questions 21

Which of the following items is a liquid asset?

Options:

A.

Antique jewelry

B.

Publicly traded stocks

C.

Net worth of a business

D.

An automobile owned free and clear

Buy Now
Questions 22

A lender is permitted to accept the employment information provided by the borrower on the initial loan application without asking for a letter of explanation in which of the following circumstances?

Options:

A.

The borrower lacks a history in an industry that requires specific skills.

B.

A recent college graduate holds a high-level position in the organization.

C.

The residence is more than 120 miles from the work location on a refinance.

D.

The borrower has been employed by the same company for three years.

Buy Now
Questions 23

If an applicant provides a waiver for the requirement to receive their appraisal three business days prior to a loan's consummation and the transaction ends up not closing at all, a creditor must still provide a copy of the appraisal no later than how many days after the creditor determines consummation will not occur?

Options:

A.

10 days

B.

30 days

C.

45 days

D.

60 days

Buy Now
Questions 24

According to the TILA-RESPA Integrated Disclosure rule (TRID), changed circumstances that may result in a revised Loan Estimate include which of the following situations?

Options:

A.

Market fluctuations on a locked loan

B.

The borrower receiving a salary increase

C.

A natural disaster in the area where the loan will close

D.

Changes that the MLO should have known at the time the Loan Estimate was provided

Buy Now
Questions 25

Which of the following is an example of a non-fluctuating income source?

Options:

A.

Salaried W-2 position

B.

Self-employed income

C.

Commission-based W-2 income

D.

Part-time work with irregular hours

Buy Now
Questions 26

Under which of the following programs is a creditor required to provide disclosures to the consumer that fully describe each of the creditor's variable-rate loan programs in which the consumer expresses an interest?

Options:

A.

ARM

B.

FHA

C.

Fixed

D.

Construction

Buy Now
Questions 27

Which of the following acts requires mortgage loan originators to complete annual continuing education to satisfy the requirement for licensure?

Options:

A.

The SAFE Act

B.

The Dodd-Frank Act

C.

The Truth in Lending Act (TILA)

D.

The Equal Credit Opportunity Act

Buy Now
Questions 28

When does the Loan Estimate expire?

Options:

A.

After the 3rd business day

B.

After the 5th business day

C.

After the 7th business day

D.

After the 10th business day

Buy Now
Questions 29

The purpose of a Suspicious Activity Report (SAR) is to report known or suspected violations or suspicious activity observed by financial institutions subject to the:

Options:

A.

Bank Secrecy Act (BSA).

B.

Truth in Lending Act (TILA).

C.

Gramm-Leach-Bliley Act(GLBA).

D.

Real Estate Settlement Procedures Act(RESPA).

Buy Now
Questions 30

A borrower works at Company XYZ and was recently approved for a cash-out refinance of her primary residence. The closing is scheduled for Friday. On Monday of closing week, the mortgage loan originator (MLO) sees on the local news that XYZ is closing and the employees have been let go. Which of the following actions, if any, should the MLO take?

Options:

A.

Tell the borrower not to say anything at closing

B.

Nothing, as the loan has already been approved

C.

Recommend that the borrower attend homeownership counseling

D.

Notify the underwriter regarding possible change of borrower's employment status

Buy Now
Questions 31

After receiving a completed application for a creditor's approval of a counteroffer, the creditor must notify an applicant of action taken within how many calendar days?

Options:

A.

15 calendar days

B.

20 calendar days

C.

30 calendar days

D.

60 calendar days

Buy Now
Questions 32

The Red Flags Rule under the Fair and Accurate Credit Transactions Act (FACTA) require lenders to:

Options:

A.

adopt best practices for property evaluations as stipulated in the Home Valuation Code of Conduct.

B.

adopt a credit score evaluation method utilizing the middle of three repository scores and the lowest of all borrowers' scores.

C.

implement a written program to detect warning signs of identity theft.

D.

implement an internal watch system to prevent the misrepresentation of occupancy status

Buy Now
Questions 33

The debt-to-income analysis should assess a borrower's total monthly housing related payments as a percentage of the:

Options:

A.

net monthly income

B.

gross monthly income.

C.

taxable income.

D.

loan amount.

Buy Now
Questions 34

What is the maximum APR that will qualify as a Safe Harbor qualified mortgage?

Options:

A.

An APR equal to or less than the average prime offer rate (APOR)

B.

An APR less than the APOR + 1.0%

C.

An APR less than the APOR + 1.5%

D.

An APR less than the APOR + 2.5%

Buy Now
Questions 35

Which of the following statements is not true concerning "higher-priced mortgage loans" as defined in the Truth in Lending Act (TILA)?

Options:

A.

Creditors must verity income and assets in order to determine whether the loan applicant has the ability to repay the loan.

B.

Creditors must establish an escrow account for taxes and property insurance on first lien mortgage loans.

C.

There are restrictions on prepayment penalties.

D.

Borrowers have a five-day right of rescission.

Buy Now
Questions 36

Which of the following statements describes the purpose of the TILA-RESPA Integrated Disclosure (TRID)?

Options:

A.

It provides a three-day cooling-off period for all loans

B.

It allows borrowers five days to review the final amount needed for settlement.

C.

It ensures that the terms and fees that are quoted at the time of application do not change.

D.

It aids borrowers in understanding the loan transaction process by utilizing readily understandable language.

Buy Now
Exam Code: MLO
Exam Name: Mortgage Loan Origination (SAFE MLO) Exam
Last Update: Nov 2, 2024
Questions: 120
MLO pdf

MLO PDF

$24  $80
MLO Engine

MLO Testing Engine

$28.5  $95
MLO PDF + Engine

MLO PDF + Testing Engine

$39  $130