NMLS SAFE-MLO Online Practice Questions and Exam Preparation

NMLS SAFE-MLO Online Questions & Answers

• Question 21:

  Which of the following sources of funds is acceptable to utilize for down payments, closing costs or financial reserves?

  A. Virtual currency funds
  B. Community second funds
  C. Personal unsecured loans
  D. Foreign assets located outside of the U.S. or its territories
  B. Community second funds

• Question 22:

  Prepaid charges include which of the following items?

  A. Origination fee
  B. Credit report fee
  C. Conveyance tax
  D. Per diem interest
  D. Per diem interest

• Question 23:

  Which of the following items may lenders use to verify a borrower's income for his ability to repay a mortgage?

  A. An electronic paystub
  B. A copy of a check register
  C. The income stated on the loan application
  D. The borrower's attestation that he expects a raise within 30 days
  A. An electronic paystub

• Question 24:

  Which of the following entities has the primary enforcement authority under the Red Flags Rule?

  A. IRS
  B. Federal Trade Commission
  C. HUD
  D. Conference of State Bank Supervisors
  B. Federal Trade Commission

• Question 25:

  When a mortgage loan originator notices multiple Social Security number discrepancies within the same loan file, it is considered a red flag of:

  A. fair lending.
  B. mortgage fraud.
  C. a forgetful borrower.
  D. pricing discrepancies.
  B. mortgage fraud.

• Question 26:

  Which of the following fees or charges is an allowable closing cost typically found on a Closing Disclosure?

  A. Origination charge
  B. Referral fee
  C. Servicing fee
  D. Yield-to-loan fee
  A. Origination charge

• Question 27:

  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?

  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
  C. A natural disaster in the area where the loan will close

• Question 28:

  An individual who is a loan processor or underwriter must maintain a state originator license if they:

  A. perform clerical duties for a mortgage lender as a supervised employee
  B. are not in communication with the consumer to obtain mortgage loan information.
  C. are an independent contractor and collect, receive or distribute information in connection with making a credit decision.
  D. are an employee of a loan processing or underwriting company that supports a mortgage broker/lender and only perform supervised clerical duties.
  C. are an independent contractor and collect, receive or distribute information in connection with making a credit decision.

• Question 29:

  For an FHA loan, which of the following payments must a borrower make to protect a lender in case of a foreclosure?

  A. Down payment
  B. Hazard insurance premium
  C. Mortgage insurance premium
  D. Homeowners association dues
  C. Mortgage insurance premium

• Question 30:

  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?

  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.
  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.