Mortgage Loan Origination v1.0

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Consumer complaints and the analysis of complaints play a vital role in identifying weaknesses in elements of a company's:

  • A. hiring procedures and training.
  • B. compliance management, training and internal controls.
  • C. secondary marketing practices of selling loans to investors.
  • D. compliance management, senior management and branch locations.


Answer : B

A mortgage loan in which a large portion of the borrowed principal is repaid at the end of the loan period is known as a:

  • A. FHA mortgage.
  • B. balloon mortgage.
  • C. qualified mortgage.
  • D. deferred-payment mortgage.


Answer : B

How many days must a borrower's mortgage loan be delinquent before the mortgage company is permitted to submit the first notice filing in the foreclosure process?

  • A. 30 days
  • B. 60 days
  • C. 90 days
  • D. 120 days


Answer : D

Under the TILA-RESPA Integrated Disclosure rule (TRID), what is the minimum time period that must pass between a borrower's receipt of a Loan Estimate and the closing of a mortgage loan?

  • A. 7 business days
  • B. 15 business days
  • C. 30 business days
  • D. 45 calendar days


Answer : A

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

  • A. Refinance
  • B. Construction
  • C. Reverse mortgage
  • D. USDA Rural Development


Answer : A

The Equal Credit Opportunity Act (ECOA) defines the term "elderly" as anyone:

  • A. 60 years of age or older.
  • B. 62 years of age or older.
  • C. 65 years of age or older.
  • D. 70 years of age or older.


Answer : B

Which of the following must be included in advertisements displayed by mortgage loan originators (MLOs) on their social media pages for mortgage services including payment amounts?

  • A. The APR
  • B. The MLO's personal website
  • C. The MLO's business address
  • D. The number of days that the rate is available


Answer : A

Which of the following items may lenders use to verify a borrower's income for his ability to repay a mortgage?

  • A. An electronic paystub
  • B. A copy of a check register
  • C. The income stated on the loan application
  • D. The borrower's attestation that he expects a raise within 30 days


Answer : A

An appraiser agrees to give a mortgage loan originator (MLO) half of her appraisal fees in return for the MLO's future business. This illegal practice is known as:

  • A. redlining.
  • B. fee splitting.
  • C. blockbusting.
  • D. paying it forward.


Answer : B

Which of the following acts requires mortgage loan originators to complete annual continuing education to satisfy the requirement for licensure?

  • A. The SAFE Act
  • B. The Dodd-Frank Act
  • C. The Truth in Lending Act (TILA)
  • D. The Equal Credit Opportunity Act (ECOA)


Answer : A

Which of the following activities is a function of the Consumer Financial Protection Bureau (CFPB)?

  • A. Regulating the federal funds rate at which money is lent to banks
  • B. Regulating the number of mortgage loan originators in the mortgage industry
  • C. Regulating mortgage lenders on their mortgage origination practices and procedures
  • D. Deciding what quantity of mortgage-backed securities are purchased by the government


Answer : C

Maximum available flood insurance structure coverage for a residential property from the National Flood Insurance Program is what amount?

  • A. $250,000
  • B. $500,000
  • C. $750,000
  • D. $1,000,000


Answer : A

During the closing the borrower notices that the interest rate increased from 3.250% to 3.875%. The lender must:

  • A. tell the borrower to close the loan.
  • B. close the loan, then re-disclose after the loan funds.
  • C. postpone the closing, re-disclose and wait three days.
  • D. postpone the closing, re-disclose and wait three business days.


Answer : D

When applying for a home equity line of credit (HELOC), consumers should review documentation carefully and be sure that they consider:

  • A. if the HELOC is insured by HUD.
  • B. if the HELOC requires private mortgage insurance (PMI).
  • C. if the company offering the HELOC has deposit accounts insured by the FDIC.
  • D. the APR and the costs of acquiring and maintaining the HELOC.


Answer : D

A borrower's monthly debt-to-income ratio is calculated by taking the:

  • A. borrower's gross monthly housing expense divided by the principal, interest, and appraised value.
  • B. eligible total monthly debt obligations, including the monthly housing expense, divided by the borrower's gross monthly income.
  • C. eligible total monthly debt obligations for trade lines greater than 12 months multiplied by the borrower's net monthly income.
  • D. eligible total monthly debt obligations, excluding the monthly housing expense, divided by the borrower's net monthly income.


Answer : B

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Exam contains 120 questions
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