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NMLS Mortgage Loan Origination (SAFE MLO) Sample Questions:
1. A borrower visits a mortgage loan originator (MLO) for Mortgage ABC to discuss getting a home equity line of credit (HELOC) loan from Bank LMN. The MLO encourages the borrower to apply with Bank XYZ instead because ABC does not provide HELOC loans. When the borrower submits an application directly to XYZ, XYZ pays the MLO $100 from the 1% origination fee that it collected from the borrower. Is this fee permissible?
A) The fee is permitted if the fee is disclosed on the final settlement statement.
B) The fee is not permitted as the MLO did not perform any actual origination services for the borrower, unless the fee was paid directly by the borrower.
C) The fee is permitted as the MLO performed origination services for the borrower.
D) The fee is not permitted as the MLO did not perform any actual origination services for the borrower.
2. The Red Flags Rule under the Fair and Accurate Credit Transactions Act (FACTA) require lenders to:
A) adopt a credit score evaluation method utilizing the middle of three repository scores and the lowest of all borrowers' scores.
B) implement an internal watch system to prevent the misrepresentation of occupancy status
C) adopt best practices for property evaluations as stipulated in the Home Valuation Code of Conduct.
D) implement a written program to detect warning signs of identity theft.
3. How often must a nonexempt telemarketing entity check their call list against the National Do Not Call Registry?
A) Every 2 weeks
B) Annually
C) Every 31 days
D) Every 7 days
4. It is acceptable for a lender to request a co-applicant in which of the following situations?
A) The borrower will not qualify for the loan on their own.
B) The co-applicant is gifting money to the borrower to make a down payment on a purchase-money mortgage
C) The co-applicant will be residing in the house with the borrower.
D) The borrower's future income is dependent on the co-applicant.
5. Which of the following types of income are considered as qualifying when applying for a mortgage loan?
A) Federal tax refund
B) Net rental income
C) Family gifts
D) Reimbursed expenses
Solutions:
Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: A | Question # 5 Answer: B |
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