NMLS Test Prep - Free Practice Mortgage Test Questions.
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Federal Mortgage-Related Laws, General Mortgage Knowledge, Mortgage Loan Origination Activities, Ethics, and Component with Uniform State Content are included in the MLO Test Prep.
The SAFE Mortgage Licensing Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators.
The SAFE Mortgage Licensing Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators.
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The SAFE Act was established by Title Five of the Housing and Economic Recovery Act.The Nationwide Mortgage Licensing System and Registry (NMLSR) is a national system for regulating and monitoring mortgage professionals.
The SAFE Act was established by Title Five of the Housing and Economic Recovery Act.The Nationwide Mortgage Licensing System and Registry (NMLSR) is a national system for regulating and monitoring mortgage professionals.
If the borrowers loan is current, what is the required LTV for a mortgage servicer to remove private mortgage insurance on a high-risk loan?
The HPA requires mortgage servicers to remove private mortgage insurance on high-risk loans if the loan's LTV is more than 75%.
The HPA requires mortgage servicers to remove private mortgage insurance on high-risk loans if the loan's LTV is more than 75%.
Payment shock is caused by the borrowers current and proposed housing expenses.If an individual's housing expense increases significantly beyond what they are currently paying, they might experience difficulty making their payments.
Payment shock is caused by the borrowers current and proposed housing expenses.If an individual's housing expense increases significantly beyond what they are currently paying, they might experience difficulty making their payments.
The Statement of Subprime Lending states that customers have a higher credit risk.
The Statement on Subprime Lending defines an individual as a credit risk if their credit history shows two or more 30-day delinquencies within the prior 12 months.
The Statement on Subprime Lending defines an individual as a credit risk if their credit history shows two or more 30-day delinquencies within the prior 12 months.
State income tax returns are not used to determine an applicants income.Bank statements reflecting pay deposits, pay stubs, W-2 forms, and federal income tax returns are some of the documents used to substantiate an applicants income.
State income tax returns are not used to determine an applicants income.Bank statements reflecting pay deposits, pay stubs, W-2 forms, and federal income tax returns are some of the documents used to substantiate an applicants income.
When a person has less than 20% to put down on a home purchase, placing a subordinate loan behind a conventional first mortgage is known as:
There is a secondary loan for the difference between the 80% first mortgage and their down payment.The lender wouldn't have to use private mortgage insurance if the first mortgage was limited to 80%.A common example is an 80/10/10 which has an 80% first mortgage, 10% second mortgage and 10% down payment.
There is a secondary loan for the difference between the 80% first mortgage and their down payment.The lender wouldn't have to use private mortgage insurance if the first mortgage was limited to 80%.A common example is an 80/10/10 which has an 80% first mortgage, 10% second mortgage and 10% down payment.
A real estate agent calls an attorney to represent her client for free.Other paying clients will be referred to that attorney by the real estate agent.The attorney agrees.Who is the person who has violated RESPA?
The real estate agent violated RESPA when she offered the attorney referrals for something of value.The attorney was in violation of RESPA when he accepted the offer.
The real estate agent violated RESPA when she offered the attorney referrals for something of value.The attorney was in violation of RESPA when he accepted the offer.
A mortgage originator sends a thank you note to a real estate agent.Who is responsible for violating RESPA?
Nothing of value was exchanged between the referral sources.The thank-you note did not have a use.
Nothing of value was exchanged between the referral sources.The thank-you note did not have a use.
State legislation to regulate loan originators is created by the SAFE Act.The SAFE Act requires that state licensing laws include all of the following.
The SAFE Act doesn't have a specific fine for regulatory violations.There are different sanctions for different violations.
The SAFE Act doesn't have a specific fine for regulatory violations.There are different sanctions for different violations.
The SAFE Act requires the functions of participating in the NMLS, conducting background checks, and writing rules and regulations.
State licensing agencies must participate in the NMLS, conduct background checks, and write rules and regulations in order to have oversight over loan originators.
State licensing agencies must participate in the NMLS, conduct background checks, and write rules and regulations in order to have oversight over loan originators.
A licensing agency is looking at a company's loan origination activities.In doing so, it can do all of the following.
In conducting an examination or investigation, a state licensing agency may require the production of relevant documents, as well as books and records, and control access to the person under investigation.The state licensing agency can't close the business for a period of time.
In conducting an examination or investigation, a state licensing agency may require the production of relevant documents, as well as books and records, and control access to the person under investigation.The state licensing agency can't close the business for a period of time.
A computer is given to a mortgage broker.The title insurance company uses the computer to transmit electronic documents from the mortgage broker's office.Who is in violation of the law?
Sue Johnson works for a construction company.She gets pay in the amount of over $1,200 a week.What is her monthly income?
An annual income of $30,000 is achieved by Multiplying her bi-weekly income by 26.A monthly income of $2,500 is achieved by dividing $30,000 by 12.
An annual income of $30,000 is achieved by Multiplying her bi-weekly income by 26.A monthly income of $2,500 is achieved by dividing $30,000 by 12.
A couple has been approved for a loan.The broker fee will cost two points.What is the broker fee?
2% of the loan amount is the broker fee.The broker fee cost is $4,912 if you divide the loan amount by 2%.
2% of the loan amount is the broker fee.The broker fee cost is $4,912 if you divide the loan amount by 2%.
There are caps on the amount of interest rate or payment that can be adjusted during any one adjustment period or over the lifetime of the loan.
There are caps on the amount of interest rate or payment that can be adjusted during any one adjustment period or over the lifetime of the loan.
The life-of-loan is based on the loan's original LTV and requires annual MIP through monthly payments for a minimum of eleven years.
The life-of-loan is based on the loan's original LTV and requires annual MIP through monthly payments for a minimum of eleven years.
If applicants are charged the application fee regardless of whether or not they close on a loan, the lender doesn't have to include it in the APR.
If applicants are charged the application fee regardless of whether or not they close on a loan, the lender doesn't have to include it in the APR.
The HPA applies to residential mortgages used for primary residences.
The HPA applies to residential mortgages used for primary residences.
ECOA forbids discouraging people from applying for a mortgage.It is permissible to refuse to take an application from someone under legal age.Asking applicants about their race, national origin, and sex is permissible under HMDA and ECOA, as well as establishing an across-the-board policy whereby a lender refuses to lend to anyone at or below a certain credit score threshold is also permissible.Discouraging someone from applying due to the quality of their credit and not their score based on an across-the-board policy is a violation of ECOA.
ECOA forbids discouraging people from applying for a mortgage.It is permissible to refuse to take an application from someone under legal age.Asking applicants about their race, national origin, and sex is permissible under HMDA and ECOA, as well as establishing an across-the-board policy whereby a lender refuses to lend to anyone at or below a certain credit score threshold is also permissible.Discouraging someone from applying due to the quality of their credit and not their score based on an across-the-board policy is a violation of ECOA.
A general business day is any of the week, aside from Sunday and federal holidays, when the entity conducting business is fully operational.In order for Saturday to be counted as a business day, components must be operational on Saturday.
A general business day is any of the week, aside from Sunday and federal holidays, when the entity conducting business is fully operational.In order for Saturday to be counted as a business day, components must be operational on Saturday.
The SAFE Act requires the creation of a model state law to guide states in implementing it.The SAFE Act encourages the creation of the NMLS which would satisfy the mandates.Model State Law doesn't apply to banks or mortgage companies, it applies to states.
The SAFE Act requires the creation of a model state law to guide states in implementing it.The SAFE Act encourages the creation of the NMLS which would satisfy the mandates.Model State Law doesn't apply to banks or mortgage companies, it applies to states.
Any individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual is exempt from the act.First-time mortgage loan originators working for a non-depository institution have to license as do attorneys receiving compensation for negotiating loan terms.
Any individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual is exempt from the act.First-time mortgage loan originators working for a non-depository institution have to license as do attorneys receiving compensation for negotiating loan terms.
When compared to the conforming, conventional loan program, each of the following are key differences.
As little as 12 months of clean credit history can be used to qualify for the FHA loan program.The down payment requirements are low.Each county in the U.S. has a maximum loan amount set by the FHA.The MIP must be paid for at least 11 years on loans with an initial LTV of less than 90%.There are certain conditions under which mortgage insurance is required.
As little as 12 months of clean credit history can be used to qualify for the FHA loan program.The down payment requirements are low.Each county in the U.S. has a maximum loan amount set by the FHA.The MIP must be paid for at least 11 years on loans with an initial LTV of less than 90%.There are certain conditions under which mortgage insurance is required.
Emily referred her borrower to a hazard insurance agent.Emily's husband works for the insurance company.Emily finds no reason to issue an ABAD to the person as there is no ownership interest between the entities.Which statements are not correct?
When an associate relationship exists between two entities, a borrower referred between those entities must be issued an ABAD.An ABAD was required because Emily's husband worked for the insurance agency and created an associate relationship with the mortgage and insurance companies.
When an associate relationship exists between two entities, a borrower referred between those entities must be issued an ABAD.An ABAD was required because Emily's husband worked for the insurance agency and created an associate relationship with the mortgage and insurance companies.