1.
Betty Borrower is applying for a loan to refinance her single-family, primary residence. Larry Loanfinder is the loan originator helping her do so. Larry’s pipeline has been dwindling and he desperately needs as many closed loans as he can originate. Betty’s debt-to-income ratios are at the maximum allowable levels permitted by the mortgage product for which she is applying. During the application, Betty casually mentions that things will be better once she moves in with her sister and rents the house effective the end of that week. What, if anything, must Larry do now?
1 out of 120
2.
A lender requests and receives a consumer's credit report through a/an …
2 out of 120
3.
Retirement funds that are used to satisfy reserve requirements may be considered at:
3 out of 120
5.
If a lender cannot produce evidence of a reverse mortgage borrower having completed independent homeownership counseling, the lender …
5 out of 120
6.
Slithering Sly is the principal lending manager of a local mortgage brokerage. Understanding the immense profitability of subprime mortgage products, Sly directs his loan originators to push subprime loan products on residents of some of the city’s poorest neighborhoods. Sly assumes that the residents of socio-economically-depressed areas would be less educated than individuals residing in economically-advantaged areas, and, as such, they would be far less inclined to challenge the costs, inflated interest rates, and fees associated with subprime mortgage loans. They would simply be grateful for being offered access to credit. What Slithering Sly is orchestrating can be classified as:
6 out of 120
7.
Ginnie Mae was created in …
7 out of 120
8.
A lender must, without question, remove PMI from a conventional conforming loan at …
8 out of 120
9.
Your applicant explains that, although he really needs a mortgage loan, he declared bankruptcy last week and went through a foreclosure a month ago. What do you do?
9 out of 120
10.
A mortgage loan originator license is required for doing all of the following except:
10 out of 120
11.
Which of the following is not one of the three types of days used in the Mortgage Industry?
11 out of 120
12.
All of the following loans would require a right to rescind except:
12 out of 120
13.
Your 63 year old customer inquires about applying for a reverse mortgage. In discussing his situation, you learn that his 25 year old girlfriend is also on the property's deed. What do you advise him?
13 out of 120
14.
When reviewing your borrower’s credit report, your borrower identifies over a dozen issues that he claims are errors. What is your resolution?
14 out of 120
15.
Why are appraisers and loan originators prohibited from directly communicating?
15 out of 120
16.
What regulation is compromised when an advertiser promotes its 3/1 ARM as having a "fixed" interest rate without stipulating that the period of interest rate stability only lasts for the loan's first three years?
16 out of 120
17.
All but which of the following constitute a valid change of circumstance?
17 out of 120
18.
Under FACTA, which of the following is not a CRA obligation?
18 out of 120
19.
Jason applied for a refinance of his two-family, investment property on Tuesday. By when must his loan originator issue Jason a homeownership counseling disclosure and how many homeownership counseling agencies must it list?
19 out of 120
21.
You’re taking a loan application from an applicant and, when asking him about his intended use of the single-family subject property, he advises you that, although he will reside there from June through August, he will be renting it out for the other nine months. How do you structure this transaction?
21 out of 120
22.
A father is selling his home to his daughter for $100,000. Instead of $100,000, the father agrees to accept $75,000. The $25,000 difference is instead used to satisfy his daughter’s settlement fees and down payment. This process is referred to as:
22 out of 120
23.
The Secondary Market's purpose is to …
23 out of 120
24.
Donna Dinworthy earns income through a full-time, W-2 job at which she has worked for the previous eight years, receives court-ordered child support that expires 25 months from now as well as a note receivable which will mature in seven years, the payments for which she has received for the previous three months when the person to whom she loaned the money signed the promissory note. With what income do you credit her?
24 out of 120
25.
Which of the following is not a traditional loan?
25 out of 120
26.
Why was the MLO fired for showing a customer's appraisal to a colleague at the same company because the MLO was impressed with the size of the homeowner's inground swimming pool?
26 out of 120
27.
Once a Loan Estimate is issued, for how long must its disclosed fees be valid?
27 out of 120
29.
If the term "caveat emptor" applies, then the law of agency directs the MLO's fiduciary responsibility to the:
29 out of 120
30.
José is an insurance agent whose company has a 5% ownership interest in a mortgage company. While assessing a client’s insurance portfolio, José recognizes the benefits that his client might incur by refinancing her mortgage to satisfy a sizeable amount of unsecured debt. José recommends that his client work with Ralph, a loan originator at the mortgage company in which José’s company has the ownership interest. What else, if anything, must José now do?
30 out of 120
31.
Laura issues Meghan an LE on Thursday. On Monday, Meghan calls Laura to apply. All but which of the fees on the previously-issued LE must be the same?
31 out of 120
32.
Interest is earned by lenders …
32 out of 120
33.
A precise business day consists of …
33 out of 120
34.
An ARM is about to adjust. On the day that the new rate is determined, the index is trading at 1.93% and the margin is 4. What is the borrower's new rate rounded to the nearest 1/8th%?
34 out of 120
35.
Two types of conventional mortgages are …
35 out of 120
36.
Fannie Mae resulted from the .......
36 out of 120
37.
All but which of the following is a purpose of HUD?
37 out of 120
38.
"Know Before You Owe" is associated with …
38 out of 120
39.
Your applicant earns $30.00 per hour from her full-time job and works a 40-hour workweek containing a daily 1/2 -hour unpaid lunch. How much is her gross bi-weekly income?
39 out of 120
40.
Heather takes a virtual mortgage application through a platform such that she can see and hear her applicant and her applicant can see and hear her. At the application's Government Monitoring Section, her applicant, who is clearly a male, identifies himself as a female. What should Heather do?
40 out of 120
41.
The requirement to clearly and conspicuously disclose the fine print is activated through the use of a/an …
41 out of 120
42.
A "party to the transaction" is …
42 out of 120
43.
When will RESPA oversee a land loan?
43 out of 120
44.
A bank takes a mortgage application on a Friday. Which document must be issued by no later than Wednesday of the following week assuming that Monday is not a federal holiday?
44 out of 120
45.
If an MLO fails to renew his or her MLO license by December 31st, by when must he or she do so in order to maintain his or her MLO license?
45 out of 120
46.
All but which of the following disclosures are informational disclosures?
46 out of 120
47.
For what does NMLS stand?
47 out of 120
49.
In the presence of non-traditional income, which of the following is not needed?
49 out of 120
50.
For what does FHLMC stand?
50 out of 120
51.
A borrower discloses receipt of untaxed monthly disability insurance amounting to $410 which he is due to earn for the remainder of his life. With what amount do you credit him on his mortgage application?
51 out of 120
52.
In accordance with TRID, an irregular transaction is a/an …
52 out of 120
53.
If an MLO fails to complete required CE for a particular year by the last day of February of the following year, what would not be required of that MLO in order to continue originating mortgage loans?
53 out of 120
54.
Grady Grabmoney is buying a two-family primary residence. Grady wants to retain as much of his money as he can and, consequently, persuades one of his relatives to gift him 15% of the purchase price towards his down payment and settlement costs. How much, at minimum, must Grady contribute towards this transaction from his owns funds?
54 out of 120
55.
A borrower is closing on a mortgage with a monthly PITI of $2,375. His total cash needed to close amounts to $78,850. He has total assets amounting $164,350. What is the maximum reserve requirement that he can satisfy?
55 out of 120
56.
A borrower’s current adjustable interest rate is 5.375%. His loan’s margin is 3.875% and the new index has risen from his mortgage’s last interest rate adjustment to 5.25%. His loan contains the CAP structure 3/1/8. To what interest rate will his loan now adjust?
56 out of 120
58.
Your borrower wants to avoid PMI through piggyback financing. He has secured approval for a 12% junior lien. The first mortgage is for $275,000. What is the dollar amount of his down payment?
58 out of 120
59.
Each state regulatory authority is overseen by a:
59 out of 120
60.
In the presence of permissible purpose, which of the following constitutes permission for an MLO to access someone's credit profile?
60 out of 120
61.
By considering what, might an underwriter be able to approve a VA loan with a DTI ratio of above 41%
61 out of 120
62.
Marsha is a licensed Realtor who is also licensed as an MLO. Marsha wants to act in a dual capacity on a particular mortgage transaction as permitted by state law. The USDA loan program is the product best suited for the customer. Marsha, however, insists on originating an FHA loan. Why might Marsha be doing this?
62 out of 120
63.
Betty Buysahome is buying her first primary residence. The total amount of funds that Betty needs in order to close this transaction is $85,985. In providing her asset statements, Betty produces one from a checking account reflecting an ending balance of $1,250, one from a savings account reflecting an ending balance of $27,415, and two mutual fund statements. One of the mutual funds reflects an ending balance of $56,210 while the other reflects an ending balance of $105,990. What is the total amount that the lender will credit Betty for the assets that she evidenced?
63 out of 120
64.
If a revised Loan Estimate is mailed to a borrower, when is the earliest that the loan may close?
64 out of 120
65.
When a borrower is considering applying for an adjustable-rate mortgage, what should the loan originator do?
65 out of 120
66.
The SAFE Act authorizes individual state regulatory authorities to do all of the following except:
66 out of 120
67.
When must a Victim's Notice of Rights be issued to a consumer?
67 out of 120
68.
All of the following will permit the exchange of something of value between actual or potential referral sources except ...
68 out of 120
69.
MLO Marv's customer explains that she is an honorably-discharged veteran possessing minimal funds with which to work. In response, Marv advises that her best option would be the VA loan which his company does not offer. Instead, Marv offers the FHA program with a 3.5% down payment which the borrower opts to pursue. What, if anything, has Marv done wrong?
69 out of 120
70.
Which of the following is used to verify that a borrower is currently employed with the employer disclosed on her application?
70 out of 120
71.
Once the Closing Disclosure is issued, a revised CD must be issued …
71 out of 120
72.
All but which of the following are advertising trigger terms?
72 out of 120
73.
Mortgage programs, specifically designed to promote lending in socioeconomically-depressed metropolitan statistical areas are referred to as ...
73 out of 120
74.
Jo meets with her mortgage loan originator to discuss options to buy a new home. Her loan originator recommends a loan program offered though HUD. Which of the following programs did Jo’s loan originator recommend?
74 out of 120
76.
A buyer has 5% to put down on the purchase of a home. As he does not desire to pay MIP, he secures a secondary loan for 15% so that the LTV of his first mortgage does not have to exceed 80%. This process is referred to as:
76 out of 120
77.
What is the amount of pre-paid (interim) interest owed by a borrower whose $205,000 fixed-rate loan closes on November 15th?
77 out of 120
78.
To prevent unearned fees, RESPA prohibits all of the following except .......
78 out of 120
79.
All but which of following liabilities would not be counted towards the applicant’s back-end debt-to-income ratio?
79 out of 120
80.
Your applicant is applying a loan, the maximum allowable back-end DTI of which is 43% with no flexibility to exceed. Her monthly income is $6,700 and the PITI of the loan for which she is applying is $1,140. She has a monthly auto loan payment of $515 for which 12 payments remain, a student loan payment of $675 for which 72 payments remain, minimum monthly payments on credit cards amounting to $314, and she is a co-signer on her daughter’s monthly auto loan payment of $415 for which 15 payments remain. As such, her back-end DTI amounts to 45% which prevents her from qualifying. How do you respond to this customer?
80 out of 120
81.
Fannie Mae was established in …
81 out of 120
82.
If an advertisement states the amount of any payment, the clear and conspicuous disclosure of which of the following would not be required?
82 out of 120
83.
The NMLS Registry was created in order to:
83 out of 120
84.
Beula Bigloans is a loan originator working for Rockem’ Sockem’ Mortgages. Beula enters into an agreement to pay for a local real estate firm’s marketing expenses in return for no less than 25 referrals per month. Beula figures that she will more than recover the money that she spends through the income she will earn from those referrals. Since she is paying for the real estate office’s marketing and not specifically for referrals, Beula feels that she is fully compliant with all state and federal laws. With what law, if any, is there a compliance failure and who, if anyone, is in violation?
84 out of 120
85.
Which of the following is not considered when determining a loan's APR?
85 out of 120
86.
A borrower has a 30-year, interest-only loan with a balance of $310,000 and a rate of 3.625% interest-only for the first 10 years. Assuming that the borrower only remits the interest-only payment, how much money would he spend on interest prior to his loan becoming fully-amortizing?
86 out of 120
87.
If the Closing Disclosure is sent to the customer electronically on Monday, when would the first opportunity to close be?
87 out of 120
88.
Income earned through capital gains may be used for qualifying purposes as long as:
88 out of 120
89.
The primary concern surrounding mortgage loan originators being able to retain YSP as compensation stems from the concept of:
89 out of 120
90.
MLO Maggie has not maintained a state loan originator license for six years. During the previous four years, Maggie has been employed as a registered loan originator for Big Bottom Line Bank. Now Maggie has decided to leave the bank and originate loans for Money Mortgage Management Brokers. Will Maggie need to retake the NMLS exam?
90 out of 120
91.
For what does GNMA stand?
91 out of 120
92.
All but which of the following constitute compliance failures pertaining to the Gramm-Leach-Bliley Act?
92 out of 120
93.
If a bank takes an FHA loan application on a Friday, by when will the Housing Counseling Disclosure need to be issued?
93 out of 120
94.
In accordance with the Gramm-Leach-Bliley Act, which of the following is a consumer?
94 out of 120
95.
Freddie Mac was created in …
95 out of 120
96.
What is the minimum amount of time for which an individual must be self-employed in order to consider his or her self-employment income when underwriting a mortgage?
96 out of 120
97.
Terrible Title of Tullahoma, Tennessee oversees the refinance settlement of a borrower's single family investment property. At the closing, the settlement agent provides one copy of the right to rescind to the borrower and co-borrower. As a result …
97 out of 120
98.
Another name for the Initial Escrow Account Disclosure Statement is the …
98 out of 120
99.
In preparing a Loan Estimate, you describe the transaction to your settlement company so that they may provide you with a list of the government recordation and title charges. Per your settlement company, you disclose the recording fee to be $275.00. When the closer receives the final settlement figures from the settlement company days before closing, and with no valid change of circumstance, the recording fee is listed as $580.00. What is the recording fee for which the borrower will ultimately be held accountable?
99 out of 120
100.
A mortgage loan originator’s unique identifier must appear on all but which of the following:
100 out of 120
101.
The parameters of a loan require your borrower to have 24 months of reserves in order to qualify. Your borrower needs $27,500 to close, he has $38,750 in assets, and is applying for a loan with a $515 bi-weekly PITI payment. Does he qualify and, if yes, with how much money left over beyond the loan’s reserve requirement or, if not, how much money is he short of the loan’s reserve requirement?
101 out of 120
102.
The most common type of fraud perpetrated by homeowners is:
102 out of 120
103.
Offering a higher rate to an Asian borrower than the rate offered to a Caucasian borrower demonstrates an example of:
103 out of 120
104.
If an individual is issued her MLO license on November 10th, by when will she have to first complete required CE?
104 out of 120
105.
All of the following constitute violations of the Gramm-Leach Bliley Act except:
105 out of 120
106.
Which of the following actions would a contract processor be allowed to perform?
106 out of 120
107.
Portfolio lending refers to …
107 out of 120
108.
All but which refer to the CFPB?
108 out of 120
109.
What is the only fee that can be collected prior to issuing an LE?
109 out of 120
110.
All but which of the following is contained within a credit report:
110 out of 120
111.
Why is it critical to secure a borrower’s employer’s telephone number independent of the borrower?
111 out of 120
112.
A prospective borrower calls to ask for the fees that you will charge should he pursue financing with you. Although he is not interested in applying or providing very much information at this time, he would like a written estimate. How do you respond?
112 out of 120
113.
On Tuesday MLO Eddie issues a Loan Estimate to Kenny reflecting an underwriting fee of $150.00. Two days later, Eddie e-mails Kenny to inquire if he wishes to proceed to which Kenny immediately replies that he has changed his mind and is no longer interested. The following day, Kenny e-mails Eddie advising him that he has changed his mind again and wishes to proceed after all. Eddie issues Kenny a new LE with an underwriting fee of $200.00 due to a company-wide fee increase. Eddie and his lender have:
113 out of 120
114.
Violations of the Gramm-Leach-Bliley Act can result in all of the following except:
114 out of 120
115.
At what point does a mortgage loan originator’s fiduciary responsibility to their customer begin?
115 out of 120
116.
Which of the following exemplifies a red flag warranting further investigation?
116 out of 120
117.
A consumer reporting agency failing to protect a consumer's credit-related information is a violation of the …
117 out of 120
118.
For what does FNMA stand?
118 out of 120
119.
If an individual is issued his MLO license on November 10th, when will she have to first renew her license?
119 out of 120
120.
The legal doctrine of "Respondeat Superior" …
120 out of 120
