Exam – Test Free sample - NMLS Mortgage Licensing Training

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1.

At what LTV is a mortgage servicer required to remove PMI on a “high-risk” loan, assuming that the borrower’s loan is current?

77%

78%

22%

80%

1 out of 15

2.

What was developed by the CSBS and AARMR and what was it for?

The CFPB Audit Rules, to ensure compliance with Model State Law

The NMLS State Guidelines, to assist states in complying with the SAFE Act

The MSL, to assist states in complying with the SAFE Act

The SAFE Act, to provide for the licensing and registration of mortgage loan originators

2 out of 15

3.

Which of the following was one purpose of the HERA?

Pursuing and prosecuting terrorists

Establishing the NMLSR

Improving the stock market

Recovering from the mortgage crisis

3 out of 15

4.

What is the Model State Law?

A model created by the CSBS and the AARMR to guide states in implementing the legislation required by the Mortgage Licensing Act

A document created by the CSBS and the AARMR to guide states in implementing the legislation required by the SAFE Act

A book created by the CSBS and the AARMR to guide mortgage companies in implementing the legislation required by the SAFE Act

A form composed by the CSBS and the AARMR to guide banks in implementing the legislation required by the SAFE Act

4 out of 15

5.

Which of the following mortgage broker policies would violate fair lending laws?

Originating loans only for customers who live within 100 miles of the broker’s location

Doing business only with customers who are seeking loans for residential properties

Refusing to originate loans in zip codes known to be economically depressed

Refusing to originate loans in an earthquake zone

5 out of 15

6.

Which of the following was not a component to the Guidance on Nontraditional Mortgage Product Risks?

Loan terms and underwriting standards

Risk management practices

Subprime abuses

Consumer Protection Issues

6 out of 15

7.

Unethical practices in the mortgage industry have been blamed for all but which of the following?

The subprime meltdown

Mortgage fraud

Rising foreclosure rates

The housing bubble bursting

7 out of 15

8.

A borrower's total monthly housing expense is often referred to as PITI and includes all of the following except:

Local and state property taxes (if applicable)

PMI Insurance (if applicable)

Principal, interest, and mortgage insurance

Principal, interest, hazard insurance, and utilities

8 out of 15

9.

Which of the following is a mortgage applicant asked to disclose voluntarily?

Her age

Her sex

Her years of education

Her marital status

9 out of 15

10.

Select the answer that best describes the requirements surrounding the unique identifier of any person originating a residential mortgage loan.

It shall be clearly shown on all residential mortgage loan application forms, solicitations, or advertisements, including business cards or websites, and any other documents as established by rule, regulation, or order of the Commissioner

It shall be clearly shown on all commercial mortgage loan application forms, solicitations, or advertisements, including business cards or websites, and any other documents as established by rule, regulation, or by order of the Commissioner

It shall be clearly shown on all fixed-interest home mortgage loan application forms, solicitations, or advertisements, including business cards or websites, and any other documents as established by rule, regulation, or order of the Commissioner

It shall be clearly shown on all personal mortgage loan application forms, solicitations, or advertisements, including business cards or websites, and any other documents as established by rule, regulation, or order of the Commissioner

10 out of 15

11.

Each of the following statements are true about a deed except:

The deed is a legal document and must use a legal description to identify the property

The deed need not be in writing

The grantor must sign the deed

The deed is recorded into public record

11 out of 15

12.

The two types of title insurance available through the purchase of a primary residence are:

Owner’s and occupier’s

Lender’s and owner’s

Lender’s and hazard

Owner’s and investor’s

12 out of 15

13.

Which of the following loans would not be assumable?

An FHA loan

An ARM

A traditional conventional loan

A VA loan

13 out of 15

14.

A refinance requires ...

A new promissory note and a new security instrument

A revised promissory note and a revised security instrument

A revised promissory note and a new security instrument

A new promissory note and a revised security instrument

14 out of 15

15.

A mortgage broker is unable to assist a client and refers him to another mortgage broker for origination services. The second broker pays the referring broker a fee for providing the lead. Which of the following is correct?

Payment of the fee is illegal

The fee is illegal unless the brokers provide a disclosure to the client

The fee is legal as long as the brokers have a pre-existing marketing service agreement in place

The fee is legal as long as the brokers do not have a pre-existing marketing service agreement in place for payment of referral fees

15 out of 15

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