Mortgage Loan Originator Federal Regulations and Ethics 3

Question 1

Under the SAFE Act, an MLO license can be suspended or revoked for:

Accepted Answer

Fraud, misrepresentation, or a felony conviction involving dishonesty

Answer

Originating more than 100 loans per year

Answer

Failing to meet a production quota

Answer

Working for more than one lender simultaneously

Question 2

What is 'dual agency' in a real estate transaction, and why is it important to MLOs?

Accepted Answer

When a real estate agent represents both buyer and seller; MLOs should be aware to identify potential conflicts

Answer

When a lender services two loans simultaneously; irrelevant to MLOs

Answer

When an MLO also acts as the title agent; required by RESPA

Answer

When an appraiser values two properties; prohibited by USPAP

Question 3

Under Dodd-Frank's ability-to-repay (ATR) rule, lenders must verify a borrower's ability to repay using:

Accepted Answer

Reasonably verified third-party documentation of income, assets, and debts

Answer

Only the borrower's stated income

Answer

The borrower's credit score alone

Answer

Projected future income estimates

Question 4

Which of the following is an example of 'predatory lending'?

Accepted Answer

Charging excessive fees or placing a borrower in a loan they cannot afford to benefit the lender

Answer

Offering a lower rate to a borrower with excellent credit

Answer

Requiring a larger down payment for a riskier loan

Answer

Disclosing all fees accurately at application

Question 5

The Fair Credit Reporting Act (FCRA) gives consumers the right to dispute inaccurate information in their credit report, and the credit bureau must investigate within:

Accepted Answer

30 days

Answer

15 days

Answer

45 days

Answer

60 days

Question 6

Under the Homeowners Protection Act (HPA), automatic PMI termination on conventional loans must occur when LTV reaches what level based on the original amortization schedule?

Accepted Answer

78%

Answer

80%

Answer

75%

Answer

70%