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SAFE-MLO Real Exam Questions

Mortgage Loan Origination (SAFE MLO)

120 questions available · Page 1 of 12

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Question 1 Single choice

Which of the following loans is subject to right of rescission?

  1. A

    A purchase loan secured by a rental home

  2. B

    A refinance loan secured by a vacation home

  3. C

    A cash-out refinance loan on a primary residence

  4. D

    A rate and term refinance loan through the same creditor

Show answer and explanation

Correct answer: C

Question 2 Single choice

A borrower who knowingly makes false statements on a federally related mortgage loan to obtain property may be:

  1. A

    imprisoned for 10 to 16 months

  2. B

    fined up to JB10,000 or imprisoned for 6 months.

  3. C

    fined up to $1 million and imprisoned for 30 years.

  4. D

    fined up to the total purchase price of their home.

Show answer and explanation

Correct answer: C

Question 3 Single choice

How many days after loan consummation does a lender have to refund an excess charge subject to the 10% aggregate tolerance?

  1. A

    45 days

  2. B

    50 days

  3. C

    60 days

  4. D

    90 days

Show answer and explanation

Correct answer: C

Question 4 Single choice

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?

  1. A

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

  2. B

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

  3. C

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

  4. D

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

Show answer and explanation

Correct answer: D

Question 5 Single choice

Which of the following statements defines the term "business day" in a mortgage rescission under the Truth in Lending Act (TILA)?

  1. A

    Every day from 9 a.m. to 5 p.m.

  2. B

    Every day except Sunday and legal holidays

  3. C

    Any days except Saturdays and Sundays

  4. D

    Any days that employees may access the office to work

Show answer and explanation

Correct answer: B

Question 6 Single choice

When obtaining a mortgage loan, title insurance is required to protect the:

  1. A

    settlement agent.

  2. B

    seller of the property.

  3. C

    mortgage loan officer.

  4. D

    lender providing the financing.

Show answer and explanation

Correct answer: D

Question 7 Single choice

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?

  1. A

    Market fluctuations on a locked loan

  2. B

    The borrower receiving a salary increase

  3. C

    A natural disaster in the area where the loan will close

  4. D

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

Show answer and explanation

Correct answer: C

Question 8 Single choice

A real estate broker overhears her buyer discussing what she believes to be illegal activities while on a phone conversation. The real estate broker notifies the buyer's mortgage loan originator (MLO) that the borrower may be using illegally acquired funds as down payment for this property. The MLO decides to report some suspicious cash deposit transactions found in the borrower's bank records.
Under the Patriot Act, the MLO may discuss the filing of this report with which of the following parties, if any?

  1. A

    The buyer's agent

  2. B

    All parties involved in the transaction

  3. C

    His loan processor

  4. D

    The report Is not permitted to be discussed with any parties involved in the transaction.

Show answer and explanation

Correct answer: D

Question 9 Single choice

A mortgage loan originator (MLO) is in the process of taking an application for a 30-year mortgage, and the borrowers are over 72 years old.

Which of the following actions must the MLO take?

  1. A

    The MLO must present them with a reverse mortqaqe.

  2. B

    The MLO must present them with a home equity line of credit (HELOC).

  3. C

    The MLO must complete the application and proceed as normal.

  4. D

    The MLO must inquire about the ability to repay in the event of a borrower's death.

Show answer and explanation

Correct answer: C

Question 10 Single choice

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

  1. A

    Encouraging a target value

  2. B

    Withholding payment from an appraiser

  3. C

    Asking the appraiser to substantiate a value

  4. D

    Communication directly between the loan officer and the appraiser

Show answer and explanation

Correct answer: C