1.
MLO Mary reviews her customer’s credit report. She discovers multiple discrepancies, several inconsistencies, and many apparent errors. She advises her client that, to remedy this, she needs to order a:
1 out of 120
2.
Under what circumstance can a revised Loan Estimate be issued without violating accuracy tolerances?
2 out of 120
3.
An applicant who is compelled to disclose income that he or she earns through alimony, child support, or separate maintenance is applying for a/an ...
3 out of 120
4.
An ARM containing a payment CAP can experience all but which of the following?
4 out of 120
5.
A mortgage originator receives a call from a friend who wishes to rent a house to a potential renter. The friend does not wish to purchase a credit report but has authorization to access the applicant's credit. To avoid having to pay for a report, the friend asks the loan originator to order the potential tenant’s credit report on his behalf. The loan originator agrees to and does so. Consequently, the loan originator:
5 out of 120
6.
In addition to income, which of the following is an employment consideration?
6 out of 120
7.
The longer the lock-in period the:
7 out of 120
8.
According to RESPA, how soon must a mortgage servicer acknowledge a written correspondence received by its customer service department?
8 out of 120
9.
The legal doctrine of “Respondeat Superior” refers to:
9 out of 120
10.
How many hours does a borrower who earns an hourly rate of $20 and is paid a bi-weekly salary of $1,600 work each week?
10 out of 120
11.
What was one of the primary difficulties plaguing the mortgage industry prior to the establishment of the NMLS?
11 out of 120
13.
A licensed loan originator is working on a file when he must suddenly leave town due to a family emergency. He turns the loan over to a colleague who is also licensed and authorized to originate loans in the state in which the property is located. After the loan closes, the two originators split the commission. Under what conditions is the commission’s split permitted?
13 out of 120
14.
When an action is finalized against a licensee’s surety bond:
14 out of 120
15.
Ernie wants to buy a home for $380,000 and finance it through the 203(b) program. His DTI ratios are 25/30, his credit score is 578, he has significant reserves, and he's been consistently employed (W-2) for six years. What is the minimum down payment that Ernie would be required to make?
15 out of 120
16.
A borrower’s TLTV is 83%. His home is worth $475,000. He has a first mortgage with an outstanding balance of $135,700 along with a home equity line of credit, the outstanding balance of which is $56,375. How much more can this borrower borrow from his HELOC?
16 out of 120
17.
During a licensee’s examination or investigation, records and documentation may be removed from the licensee’s physical control for all the following reasons except:
17 out of 120
19.
A Closing Disclosure is e-mailed to the applicant on Monday, June 10th. Assuming that nothing further is heard from the applicant, what is the earliest date on which the loan could close?
19 out of 120
20.
All financial companies are required to have a hard copy of which of the following documents on their premises at all times?
20 out of 120
21.
Basing a loan approval on the value of a home and not the applicant's qualifications is known as:
21 out of 120
22.
Considering a mortgage applicant's ability to repay stems from ...
22 out of 120
23.
Sally is selling her home. Sally's Realtor Saul convinces Sally to refuse offers from any potential buyer who does not agree to use Saul's preferred title company. If Sally agrees and Saul's title company charges $1,000 for its services, what, if anything, might happen to Sally?
23 out of 120
24.
Realtor Raymond's nefarious plan is to approach homeowners in various neighborhoods and convince them to immediately sell their homes at reduced prices. He plans on motivating them through reports that "undesirables" are moving into the neighborhood which will dramatically reduce their properties' values and ultimately render their homes unsalable. Realtor Raymond's actions constitute ...
24 out of 120
25.
Edna is putting 10% down on the purchase of a two-family investment property. She is buying the dwelling for $550,000 and asks you how much in seller's concessions she can request. What do you tell her?
25 out of 120
26.
A loan originator is playing golf with a client and suggests that the client use a colleague's title services. Although there is no affiliate relationship between the title company and the mortgage company, two days later, the loan originator mails his client an ABAD. Which of the following statements is true?
26 out of 120
27.
The legal description of the property being financed appears on the:
27 out of 120
28.
Which of the following is a zero-tolerance fee?
28 out of 120
29.
Taking advantage of a borrower's lack of knowledge by communicating erroneous information on which of the following documents constitutes an ethical violation?
29 out of 120
30.
Failing to issue a right of rescission at the closing of a rescindable loan is a violation of:
30 out of 120
31.
Joe is a mortgage loan originator working for Creative Mortgage Financing. As an incentive to encourage higher revenue, Creative Mortgage Financing informs Joe that he will be paid 50 bps more on every loan that he sells that contains a pre-payment penalty. Which of the following statements correctly addresses this compensation structure?
31 out of 120
33.
If Amelia's 3/1 ARM adjusts with a new payment effective November 1st, by when must her mortgage servicer notify Amelia of her new rate and payment amount?
33 out of 120
34.
A borrower earns a weekly salary of $1,500, $125 in semi-monthly, non-taxed social security payments, and $250 in bi-weekly, court-ordered child support payments from his child’s non-custodial mother. With what monthly income do you credit this borrower assuming that all income has been consistently received for at least the previous year and is due to be received for more than three years?
34 out of 120
35.
A State Commissioner may do all the following except:
35 out of 120
36.
Ellen originates mortgage loans for a local credit union. As such, she can be technically referred to as a:
36 out of 120
38.
A UCC lien is attached to which of the following?
38 out of 120
39.
Which entity defines the FHA loan's underwriting parameters?
39 out of 120
40.
Emma earns $1,175 bi-weekly. What is her income's semi-monthly equivalence?
40 out of 120
41.
How long does the Telemarketing Sales Rule afford a company legitimately telemarketing through the use of robocalling to connect the call recipient to a live person upon the call recipient's request?
41 out of 120
43.
A utility easement is referred to as a/an:
43 out of 120
45.
Which of the following third-party settlement service providers may a borrower select?
45 out of 120
46.
Good Intentions Mortgage Trust intends to close a reverse mortgage on Friday. On Wednesday, it discovers that the loan's actual APR is 5.875% whereas the final APR provided to the borrower the day before was 5.5%. What must Good Intentions now do?
46 out of 120
47.
What is the 2024 penalty for violating the TSR/DNC Rule?
47 out of 120
48.
When a borrower is obligated to pay alimony, what may a lender do to account for it?
48 out of 120
49.
Billy's 7/1 ARM is approaching the end of its six year. Billy has $75,000 from an inheritance that he would like to put against his mortgage balance. If he does this, what will happen?
49 out of 120
50.
Which of the following would be considered a non-liquid asset?
50 out of 120
51.
Who is technically responsible for issuing the Loan Estimate?
51 out of 120
52.
Mortgage lenders and brokers must submit an activity report to the NMLS on a quarterly basis referred to as a/an:
52 out of 120
53.
All but which of the following constitutes an unacceptable security risk in protecting a customer’s non-public, personal information?
53 out of 120
54.
HMDA requires all entities subject to its reporting requirements to report annually by ...
54 out of 120
55.
An annual real estate tax bill is paid in September for $3,000. In May of the following year the escrow account is analyzed. The following September, the lender receives and pays the tax bill in the amount of $3,500. How much will the borrower's escrow payment be after the next escrow analysis?
55 out of 120
56.
Jared is a mortgage loan originator working for Big Money Bank. How many hours of annual continuing education must Jared complete in order to maintain his mortgage loan originator’s license?
56 out of 120
57.
Realtor Robin's client is Hispanic. Even though Robin's client wants to see properties all throughout the city, Robin primarily selects properties to show him that are located in Hispanic neighborhoods. What ethical failure, if any, is Realtor Robin committing?
57 out of 120
58.
Which of the following loans could never be conforming?
58 out of 120
59.
A seller wants to provide the maximum allowable seller’s concessions to the buyer of his home who is pursuing conventional financing. The purchase price is $410,000, and the borrower is seeking a loan amount of $369,000. How much in seller concessions will the seller be permitted to provide?
59 out of 120
61.
Edgar is considering an interest-only loan. By adding which of the following, could his MLO be accused of risk layering?
61 out of 120
62.
Gretchen is applying for her very first mortgage. Her assets consist of $175,000 in a money market account, $25,575 in savings, and a mutual fund amounting to $227,500. What would the maximum sum of her costs to close be allowed to be in order for her lender to credit her with her mutual fund's total statement value?
62 out of 120
63.
Edgar Eagersell is a mortgage loan originator who loves closed loans. In a follow-up conversation with an applicant who applied for a 25-year mortgage to finance their primary residence, the borrower casually mentions to Edgar that they will be moving to a different state and using the subject property for rental purposes within two weeks after their loan closes. What, if anything, should Edgar do now that the borrower has shared this information?
63 out of 120
64.
On a saleable loan, who ultimately earns the interest?
64 out of 120
65.
In the presence of a bona fide financial emergency, which of the following would not be able to be waived?
65 out of 120
66.
All, but which, is a component of the FTC Red Flags Rule?
66 out of 120
68.
Stephanie's mortgage balance is $198,790.36 at a rate of 6%. Her P&I payment is $1,199.10. What is the principal allocation of her next payment due?
68 out of 120
69.
A valid change of circumstance occurs on Tuesday resulting in a revised Loan Estimate being e-mailed to the applicant on Thursday. If the applicant acknowledges receipt and her ability to access it on Saturday, when is the earliest that the loan can close?
69 out of 120
70.
Which of the following does not constitute nonpublic personal information protected by the Gramm-Leach-Bliley Act?
70 out of 120
71.
Joan is taking out a loan for $415,000 after putting down 17%. What is the price that she is paying for the home that she is purchasing?
71 out of 120
72.
All but which of the following may be financed into a loan?
72 out of 120
73.
By allowing a borrower to retain possession of a property subject to a mortgage lien, the lender is participating in ...
73 out of 120
74.
Who is the party responsible for decisioning a mortgage application?
74 out of 120
75.
Temporary Authority affords which of the following mortgage professionals the opportunity to originate mortgage loans prior to receiving their license.
75 out of 120
76.
Desktop Originator (DO) is used for loans destined to be delivered to:
76 out of 120
77.
Unbeknownst to his neighbor, a loan originator orders his neighbor's credit report to see the quality of his credit. What regulation(s), if any, did the loan originator violate?
77 out of 120
78.
The back-end DTI ratio of 43% represents:
78 out of 120
79.
Sal's monthly mortgage payment is $3,575. What does his servicer tell him that his bi-weekly payment will be if he changes his loan to a bi-weekly plan?
79 out of 120
80.
The USA PATRIOT Act is most closely related to:
80 out of 120
81.
CAIVRS is most closely associated with:
81 out of 120
82.
Carrie issues her prospective borrower Julie an LE on Tuesday. Eight days later, Julie contacts Carrie desiring to proceed with the refinance application. Which fee may now differ from the fees disclosed on the original LE?
82 out of 120
83.
Grand Junction Power & Gas may access Billy Bob's land without asking him due to what type of easement?
83 out of 120
84.
Michelle is a Realtor who offers MLOs one contest entry ticket for every referral that she's given. At the end of the month, Michelle holds a raffle and the holder of the winning ticket receives free admission into an annual CE class that she conducts. By doing this, what can Michelle be accused of?
84 out of 120
85.
Lowell owns a small mortgage brokerage that generates less than $5m in loans annually. As such, he does everything possible to keep expenses low. One of his cost-saving strategies is to avoid the excessive costs often associated with business bank accounts. Lowell finds it more economical to use his personal checking account for all business-related financial activities. What ethical breach, if any, is Lowell committing by doing this?
85 out of 120
86.
What does the FBI Mortgage Fraud Warning Notice caution?
86 out of 120
87.
How many periodic payments does HOEPA permit to be financed into a high-cost mortgage?
87 out of 120
88.
One benefit of purchasing an owner's title policy is ...
88 out of 120
90.
Which of the following practices constitutes redlining?
90 out of 120
93.
Alice writes to her mortgage servicer bringing an error to its attention. By when must the servicer resolve Alice's concern?
93 out of 120
94.
The terms surrounding a loan's late fees are established through the ...
94 out of 120
95.
We Cheatem Good Mortgage Bankers were served notice of a claim being filed against their surety bond. What happens next?
95 out of 120
96.
Which of the following scenarios must adhere to ATR/QM considerations?
96 out of 120
97.
Which of the following is an example of non-traditional credit?
97 out of 120
98.
Which of the following activities would a non-contract mortgage processor be prohibited from performing?
98 out of 120
99.
Which of the following is not a RESPA exemption?
99 out of 120
100.
Ernie pays off his mortgage on the 2nd of July. By what date must his mortgage servicer return his escrow balance to him?
100 out of 120
101.
Cindy wants to solidify the current rate at the time of her mortgage application. Her MLO believes that rates may go down further in the near future. In order to guarantee the currently-low rate while reserving the option to get a lower one should rates reduce before settlement, Cindy will need to .....
101 out of 120
102.
How is an applicant's employment status typically confirmed?
102 out of 120
103.
A borrower’s housing expense ratio is 27%. Her monthly PITI consists of the P&I payment, real estate taxes, homeowner’s insurance, and HOA dues. Her monthly income amounts to $12,019. Her bi-weekly P&I payment is $895.00, her monthly real estate taxes amount to $855, and her monthly homeowner’s insurance is $310.97. How much is her monthly HOA dues?
103 out of 120
104.
Whose MLO license may be approved?
104 out of 120
105.
How long may a mortgage servicer, with cause, extend the timeframe by which it must resolve a customer complaint surrounding their payment's application?
105 out of 120
106.
A Realtor offers a loan originator $100 for every referral that turns into a sale. Who violated RESPA?
106 out of 120
107.
Arnie's current payment is $1,059.00. His interest rate recently increased increasing his payment to $1,655.10. His ARM contains a $200.00 payment CAP. What is the most that Arnie could remit when he makes his next payment?
107 out of 120
108.
The Secondary Market's purpose is to ...
108 out of 120
109.
All but which of the following is not a super lien?
109 out of 120
110.
When a property is located in a title theory state, the trustor refers to the/a ...
110 out of 120
111.
A mortgage originator attends an open house held by a Realtor and brings bagels. How does the mortgage professional maintain regulatory compliance?
111 out of 120
112.
A customer decides to apply for an adjustable rate mortgage since the loan’s start rate corresponds to an affordable payment. By the time that the interest rate adjusts, the borrower feels that he could simply refinance the loan if his income at that time does not support the new payment amount. Since he qualifies for the loan, the loan originator encourages him to pursue the product if it is the product that he feels best suits his needs. What else, if anything, should the loan originator do prior to completing the application?
112 out of 120
113.
Of the following, who is not required to hold a valid MLO license?
113 out of 120
114.
If a limited cash-out refinance results in cash to the customer in excess of 2% of the loan amount or more than $2,000, the lender must:
114 out of 120
115.
$51,744 is most closely associated with:
115 out of 120
116.
Reps and Warrants refers to ...
116 out of 120
118.
In many states, a licensed loan originator may also act in the capacity of a licensed Realtor on the same transaction. If doing so is permitted by the state in which the subject property is located, what, if anything, must the real estate professional do?
118 out of 120
119.
At 9:15 a.m., with a fresh pot of coffee having just brewed, an Asian customer enters a mortgage brokerage asking to speak with a loan originator about a new mortgage. While waiting, the customer is offered a cup of freshly-brewed coffee. At 4:15 that afternoon, another customer, also Asian, enters the brokerage asking to speak with a loan originator about a new mortgage. With the coffee being long gone, this customer is simply left to wait for the next available MLO. What ethical failure, if any, did the mortgage brokerage commit?
119 out of 120
120.
All but which of the following refer to the same thing?
120 out of 120
