SAFE MLO — Mortgage Loan Originator Exam Prep FREE Sample Exam

Originator Tim advises borrower Uma to leave income off an application form even though Uma earns it, saying it will simplify review. What should Tim do instead?

Coach the borrower if the false statement seems harmless

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Never coach or encourage a borrower to make false or incomplete statements; the application must reflect what the borrower reports truthfully

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Encourage omission only for debts the borrower plans to pay off soon

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Help phrase a false statement so it sounds plausible

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A lender’s fair lending training uses a case where an officer gave pricing exceptions freely to applicants he knew socially, who were overwhelmingly of one ethnic group, while strangers of another group rarely received them. What is the teaching point of the case?

Exceptions can produce discrimination through access patterns even when each individual exception seemed friendly and informal

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Social familiarity is a legitimate pricing factor

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Exceptions should be given only to strangers

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Training cases have no connection to real controls

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Applicant Walter Boone relies on documented, stable Social Security and pension income that has been received for years and is expected to continue. How must the creditor treat it?

It must consider the documented income on its stability and expected continuance, without refusing or discounting it because of the nature or source of the income

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It must disregard retirement income for applicants over age 62

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It may count the income only if Walter also returns to part-time work

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It may require a younger co-borrower for every retired applicant

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How are funds typically advanced under a construction loan?

The full amount is paid to the borrower on the day of closing

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In draws as stages of the work are completed and inspected

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Only after the certificate of occupancy is issued

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In equal monthly payments to the borrower's personal account

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A purchase price is $250,000 and the contract caps the seller concession at 3% of the price. What is the maximum concession amount?

$7,500

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$2,500

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$25,000

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$3,000

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Which statement best describes a VA Interest Rate Reduction Refinance Loan?

It is a streamlined refinance of an existing VA loan into a new VA loan, generally intended to improve the rate or terms

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It is a cash-out loan that requires a full appraisal in every case

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It refinances a conventional loan into a VA loan

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It is available to a borrower who has never had a VA loan

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Which fact pattern most suggests a borrower may need to provide business financial statements in addition to personal returns?

The borrower is a salaried teacher with no ownership in any business

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The borrower owns the majority of a company organized as a corporation that files its own return

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The borrower has a small side payment from a one-time garage sale

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The borrower receives only a fixed pension

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A lender offers Kurt a credit of 1.25% of the loan amount on a $350000 loan. How much is the lender credit?

$3500

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$2188

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$4375

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$6125

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Elena Walker’s appraised property value is $714,250 and the first mortgage loan amount is $623,480. What is the LTV ratio?

87.29%

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12.71%

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114.56%

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93.69%

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An appraiser notes the subject home has a converted garage that the county records still show as a garage, and permits are not documented. What should the underwriter expect the appraisal review to address?

Whether the conversion is legal, permitted, and typical for the market, and how it was treated in the value and in any comparable adjustments

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That converted space is always valued as living area at full price with no questions

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That the processor should change county records before submission

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That the title policy automatically covers unpermitted work

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A licensed real estate agent helps a buyer purchase a home but receives no compensation for mortgage services and performs no mortgage origination. Is an MLO license required for that real-estate-only activity?

Yes, every real estate agent must also hold an MLO license at all times

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No, real-estate-only activity without mortgage compensation does not by itself require an MLO license

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Yes, unless the agent has been selling homes for more than ten years

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No, but only if the buyer pays cash and signs a waiver

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A complaint turns out to be based on a misunderstanding, but the regulator still asks the originator for the file and an explanation. What must the originator do?

Refuse, because an unfounded complaint needs no response

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Cooperate fully and provide the records and information requested

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Provide only a letter from the originator's attorney

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Respond only if the borrower apologizes first

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SAFE MLO — Mortgage Loan Originator Exam Prep FREE Sample Exam — Fixed Set

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