[Jan 21, 2025] Pass MLO Review Guide, Reliable MLO Test Engine [Q62-Q85]

Q62. According to the SAFE Act, which of the following activities requires licensure as a mortgage loan originator?

Providing a consumer with a Homebuyer’s Toolkit

Providing a consumer with the loan policies of the lender

Communicating with a consumer to arrange a loan closing

Communicating the details of an offer for the first time over the phone

Q63. Which of the following federal laws requires mortgage lenders to adopt and follow anti-money laundering (AML) rules and regulations?

The National Bank Act

The National Currency Act

The Bank Secrecy Act

The Real Estate Settlement Procedures Act

Q64. A licensed mortgage loan originator (MLO) sharing his commission with another licensed MLO at his company for actual services performed on a loan is considered which of the following terms?

Tip sharing

Fee splitting

Single fee method

Double fee method

Q65. Which of the following items is a liquid asset?

Antique jewelry

Publicly traded stocks

Net worth of a business

An automobile owned free and clear

Q66. The upfront premium charged on an FHA mortgage transaction to protect a creditor in the event of borrower default is an example of:

optional credit life insurance.

force-placed hazard insurance.

government mortgage insurance.

private mortgage insurance

Q67. In a federally related mortgage loan on a principal dwelling, which of the following parties has the right to rescind the transaction?

Only the borrower who makes the most income

Only the borrower with the majority interest in the transaction

Only the person who will actually occupy the property

Any person who has an ownership interest in the property

Q68. 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?

The MLO must present them with a reverse mortqaqe.

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

The MLO must complete the application and proceed as normal.

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

Q69. During the loan application process, which of the following documents specifies the time period that a mortgage lender agrees to hold the mortgage interest rate at a certain percentage?

Loan application

Preapproval letter

Closing Disclosure

Rate lock agreement

Q70. Which of the following responses describes the required amount of flood insurance coverage?

The original appraised value of the home

The outstanding principal balance of the loan

The minimum amount of National Flood Insurance Program coverage available

The property value on file with the county property valuation administrator office

Q71. According to the Truth in Lending Act (TILA), the term “finance charge” includes which of the following charges?

Daily or per diem interest paid by borrower

Seller’s points offered to reduce the borrower’s closing costs

A standard credit application fee charged to all loan applicants

Document preparation fees for items such as mortgages and deeds

Q72. A borrower is approved for an 80/20 loan. Which of the following describes the lien priority for the 20% loan?

First

Second

First as it will be combined with the 80% loan

Second but combined with any other liens

Q73. Which of the following statements is not true concerning “higher-priced mortgage loans” as defined in the Truth in Lending Act (TILA)?

Creditors must verity income and assets in order to determine whether the loan applicant has the ability to repay the loan.

Creditors must establish an escrow account for taxes and property insurance on first lien mortgage loans.

There are restrictions on prepayment penalties.

Borrowers have a five-day right of rescission.

Q74. A mortgage loan originator (MLO) cannot be approved for licensure if the applicant has:

been convicted of a felony within the past seven years.

had an MLO license suspended in any governmental jurisdiction.

taken and failed the SAFE MLO National Test three times within the last year.

never been licensed or registered as an MLO in any governmental jurisdiction.

Q75. Which of the following loan types is regulated by the Home Ownership and Equity Protection Act (HOEPA)?

Refinance

Construction

Reverse mortgage

USDA Rural Development

Q76. It is acceptable for a lender to request a co-applicant in which of the following situations?

The borrower will not qualify for the loan on their own.

The borrower’s future income is dependent on the co-applicant.

The co-applicant will be residing in the house with the borrower.

The co-applicant is gifting money to the borrower to make a down payment on a purchase-money mortgage

Q77. Which of the following documents is required to be issued to a customer when a mortgage loan originator is also a real estate broker on the same transaction?

Loan application

Appraisal disclosure

Special information booklet

Affiliated business arrangement

Q78. According to the Truth in Lending Act (TILA), a dwelling includes which of the following?

An unimproved lot

A six-unit apartment complex

An individual condominium unit

A timeshare

Q79. 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?

Market fluctuations on a locked loan

The borrower receiving a salary increase

A natural disaster in the area where the loan will close

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

Q80. Which of the following is a requirement for a mortgage loan originator (MLO) license?

Completed at least 10 hours of pre-licensing education

Have not had an MLO license revoked in the last five years

Have never been convicted of a felony in a domestic, foreign or military court

Are covered by either a net worth or surety bond or pay into a state fund as required by the state loan originator’s supervisory authority

Q81. 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?

His compensation is permitted as compensation only includes salary and his salary is not based on loan terms.

His compensation is permitted as compensation only includes salary and bonuses and his salary and bonus is not based on loan terms.

His compensation is not permitted as compensation only includes salary and his salary is based on loan terms.

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.

Q82. Which of the following is not a primary function for compensation undertaken by a mortgage loan originator on an FHA loan?

Taking an application

Offering or negotiating credit terms

Assisting a consumer in applying for credit

Performing real estate brokerage activities

Q83. Which of the following entities has the primary enforcement authority under the Red Flags Rule?

IRS

Federal Trade Commission

HUD

Conference of State Bank Supervisors

Q84. If a mortgage loan includes a prepayment penalty, it must be included on which of the following disclosures?

Loan Estimate only

Closing Disclosure only

Uniform Residential Loan Application

Both the Loan Estimate and Closing Disclosure

Q85. In a federally related mortgage loan transaction, a charge for a settlement service by a person for which no services or nominal services are performed is prohibited:

regardless of the sources of payment.

only if it is paid by the borrower’s real estate agent.

unless it is paid by the seller or the seller’s real estate agent.

unless it is paid by the mortgage loan originator on the borrower’s behalf.