SAFE - Certified Secure and Fair Enforcement Mortgage Loan Originator Uniform State Content (USC) Questions and Answers

Question 1

A state licensing agency has the authority to conduct examinations and investigations of a licensed mortgage loan originator.
Which of the following is a permissible activity for the state authority during such an examination?

Accepted Answer

Subpoena documents and take witness testimony under oath.

Answer

Impose a prison sentence on the MLO for non-compliance.

Answer

Seize personal assets of the MLO without a court order.

Answer

Publish the MLO's personal financial information to the public.

Question 2

An MLO is working with a borrower who has a significant amount of undocumented cash income. The MLO suggests the borrower temporarily deposit the cash into a relative's bank account, which will then be gifted back to the borrower to show as seasoned funds. According to the Uniform State Content, this advice constitutes which prohibited act?

Accepted Answer

Engaging in an unfair or deceptive practice.

Answer

A bait and switch tactic.

Answer

An air loan scheme.

Answer

Charging an unearned fee.

Question 3

Under the model state law framework reflected in the Uniform State Content, a state regulatory authority has the power to issue a cease and desist order against a licensee. This order may be issued if the regulator determines that the licensee has:

Accepted Answer

Violated a state or federal law or regulation related to mortgage lending.

Answer

Received a negative, but unverified, online customer review.

Answer

Failed to meet monthly production goals set by their employer.

Answer

Advertised interest rates that were slightly higher than a competitor's.

Question 4

Which of the following scenarios BEST describes a prohibited 'bait and switch' activity as defined under the Uniform State Content?

Accepted Answer

Advertising a low interest rate that the MLO has no intention of actually providing.

Answer

Offering a borrower a fixed-rate loan and a variable-rate loan option.

Answer

Correcting a clerical error on a loan estimate with the borrower's consent.

Answer

Requiring the borrower to pay for a third-party appraisal service.

Question 5

According to the SAFE Act's model state law provisions, a mortgage loan originator's license must be renewed annually. Which of the following is a standard requirement for license renewal?

Accepted Answer

Completing at least 8 hours of NMLS-approved continuing education.

Answer

Originating a minimum dollar volume of loans in the preceding year.

Answer

Submitting a business plan for the upcoming year to the state regulator.

Answer

Passing a new state-specific examination each year.

Question 6

A state regulator is conducting an investigation into the practices of a mortgage company. The company manager instructs an MLO to destroy certain loan files that may show non-compliance. Under the Uniform State Content, what is the MLO's obligation?

Accepted Answer

Provide all records to the state regulator upon request.

Answer

Follow the manager's instructions to show company loyalty.

Answer

Wait for a formal subpoena before deciding what to do.

Answer

Consult with another manager before taking any action.

A state licensing agency has the authority to conduct examinations and investigations of a licensed mortgage loan originator.Which of the following is a permissible activity for the state authority during such an examination?

A state licensing agency has the authority to conduct examinations and investigations of a licensed mortgage loan originator.
Which of the following is a permissible activity for the state authority during such an examination?