FREE MLO Questions and Answers

Question 1

Which of the following best describes a non-traditional mortgage product, as defined by the SAFE Act:

Accepted Answer

Any mortgage other than 30-year fixed

Answer

An open-end mortgage

Answer

An adjustable rate mortgage

Answer

A mortgage with a term of less than 30 years

Question 2

Which of the following would be exempt from the MLO designation requirement under the SAFE Act?

Accepted Answer

A real estate broker performing brokerage activity

Answer

A person who takes a loan application and negotiates terms on a residential loan

Answer

A loan originator who does not have to be licensed

Answer

A contract mortgage processor

Question 3

An individual who works for any of the following, with the exception of:

Accepted Answer

A mortgage brokerage company under the authority of the DRE

Answer

A subsidiary of a depository institution regulated by a Federal banking agency

Answer

A depository institution

Answer

An institution regulated by the Farm Credit Administration

Question 4

A residential mortgage loan is any loan that is primarily used for one of the purposes listed below, with the exception of:

Accepted Answer

1-4 owner-occupied use

Answer

Family use

Answer

Household use

Answer

Personal use

Question 5

What one phrase best captures the intent behind having a unique identification number?

Accepted Answer

Accountability

Answer

Responsibility

Answer

Compatibility

Answer

Liability

Question 6

The SAFE Act states that all of the following show that an MLO candidate lacks financial accountability, with the exception of:

Accepted Answer

The candidate has participated in a short sale as a principal within the past three years

Answer

Foreclosures within the past three years

Answer

Current outstanding judgments

Answer

Outstanding government liens and filings

Question 7

Which of the following describes the pre-licensing education requirements for MLO candidates the best?

Accepted Answer

Twenty hours to include Federal and State-specific topics

Answer

Eight hours of revolving Federal and State-specific topics

Answer

Eight hours every year

Answer

Twenty hours to include Federal topics only

Question 8

The new regulation is applicable to all of the following, with the exception of:

Accepted Answer

Loans made to a business entity

Answer

Vacant land

Answer

Loans made to certain trusts for tax and estate planning purposes

Answer

Construction loans

Question 9

How should this situation be addressed if the MLO is creating the Loan Estimate form but is unaware of the identity of the wholesale lender?

Accepted Answer

Leave the space on the form blank

Answer

Mark the space N/A

Answer

The MLO must hold onto the form and apply for an extension of the 3 business day disclosure requirement

Answer

Mark the space to be determined

Question 10

Which of the following has the ultimate duty for the accurate and timely transmission of disclosures to the consumer after the borrower has submitted a full loan application:

Accepted Answer

The creditor

Answer

The MLO

Answer

The MLO and lender have equal responsibility

Answer

The trustee