NMLS SAFE-MLO Online Practice Questions and Exam Preparation

NMLS SAFE-MLO Online Questions & Answers

• Question 31:

  The TILA-RESPA Integrated Disclosure rule (TRID) applies to most closed-end consumer credit transactions secured by real property, which includes:

  A. reverse mortgages. B home equity lines of credit (HELOCs;
  B. refinance of a condominium property.
  C. loans secured by a mobile home on a leased lot.
  C. loans secured by a mobile home on a leased lot.

• Question 32:

  According to the Equal Credit Opportunity Act (ECOA), which of the following terms is defined as a refusal to grant credit based on the requested loan terms, an unfavorable change in loan terms, or a termination of an account/application?

  A. Adverse action
  B. Account closure
  C. Credit closure
  D. Denial of credit
  A. Adverse action

• Question 33:

  Which of the following loan types is regulated by the Home Ownership and Equity Protection Act (HOEPA)?

  A. Refinance
  B. Construction
  C. Reverse mortgage
  D. USDA Rural Development
  A. Refinance

• Question 34:

  Which of the following acts requires mortgage loan originators to complete annual continuing education to satisfy the requirement for licensure?

  A. The SAFE Act
  B. The Dodd-Frank Act
  C. The Truth in Lending Act (TILA)
  D. The Equal Credit Opportunity Act
  A. The SAFE Act

• Question 35:

  Which of the following items is a liquid asset?

  A. Antique jewelry
  B. Publicly traded stocks
  C. Net worth of a business
  D. An automobile owned free and clear
  B. Publicly traded stocks

• Question 36:

  A mortgage loan originator (MLO) takes an application for a borrower who is obtaining an owner-occupied maximum amount refinance loan. The borrower also asks for a loan application for a new house that they are purchasing that will not be finished until 60 days after the refinance loan closes. Although the MLO advises the borrower that the terms of the refinance loan require that they occupy the property for 12 months, the borrower says that the new purchase loan will not close until after the refinance loan has closed. The MLO must:

  A. refer the purchase loan to another MLO in their company to obtain a referral fee.
  B. refer the borrower to another lender for the purchase loan so that the MLO is permitted to get a commission on the refinance loan.
  C. take both applications and do one loan "in house" and broker the second loan to another lender.
  D. advise the borrower that the MLO can do the refinance loan as a non-owner-occupied loan and the purchase loan as an owner-occupied loan.
  D. advise the borrower that the MLO can do the refinance loan as a non-owner-occupied loan and the purchase loan as an owner-occupied loan.

• Question 37:

  A borrower works at Company XYZ and was recently approved for a cash-out refinance of her primary residence. The closing is scheduled for Friday. On Monday of closing week, the mortgage loan originator (MLO) sees on the local news that XYZ is closing and the employees have been let go. Which of the following actions, if any, should the MLO take?

  A. Tell the borrower not to say anything at closing
  B. Nothing, as the loan has already been approved
  C. Recommend that the borrower attend homeownership counseling
  D. Notify the underwriter regarding possible change of borrower's employment status
  D. Notify the underwriter regarding possible change of borrower's employment status

• Question 38:

  A creditor receives an application with all the required pieces of information but wants to have additional information to determine a borrower's qualifications for a loan. Which of the following actions is most compliant with industry regulations?

  A. Consider the application incomplete and put initial processing on hold until the additional information is received
  B. Carefully document attempts to obtain the necessary additional information from the consumer to show why the decision to hold further processing was made
  C. Provide timely initial disclosures to the consumer even though the requested information when received may reflect that the initially disclosed figures are outdated
  D. Provide a fees worksheet, a Falr Lending Disclosure and an Equal Credit Opportunity Act (ECOA) form to the consumer, waiting until the additional necessary information is obtained to Issue the balance of required disclosures
  C. Provide timely initial disclosures to the consumer even though the requested information when received may reflect that the initially disclosed figures are outdated

• Question 39:

  Which of the following components of an ARM adjusts periodically?

  A. Index and margin only
  B. Index and interest rate only
  C. Margin and interest rate only
  D. Margin, Index and interest rate
  B. Index and interest rate only

• Question 40:

  Which of the following services is included in the definition of a settlement service?

  A. Flood insurance
  B. Homeowners association fees
  C. Title company/escrow agent services
  D. Sale of the mortgage loan on the secondary market
  C. Title company/escrow agent services