Mortgage Loan Originators (MLO) Federal Laws Practice Test

These questions are part of the practice quiz. Start practicing

• Which type of mortgage usually has lower initial payments for the borrower?
• HOEPA does not apply to which of the following transactions?
• What is a primary role of the Consumer Financial Protection Bureau?
• What is the primary regulatory body for the Truth in Lending Act (TILA)?
• The Privacy Rule of the Gramm-Leach-Bliley Act requires financial institutions to provide the borrower with a Consumer Privacy policy before what?
• What is a key feature of the SAFE Act?
• Regulation X is also known as what law?
• At what point can a lender collect a loan origination fee?
• The SAFE Act is part of which legislative act?
• Which regulation prohibits kickbacks and referral fees in real estate transactions?
• Which loan type is NOT included in the Home Mortgage Disclosure Act?
• Which federal agency is responsible for administering the Real Estate Settlement Procedures Act?
• Which law defines a high-cost loan, sometimes referred to as a Section 32 loan?
• What must a lender provide if they deny a mortgage application?
• What does APR stand for in mortgage lending?
• Which of the following must be provided within three days of a mortgage loan application?
• What is a "closing disclosure"?
• Which law requires mortgage lenders to provide a Loan Estimate?
• Which advertisement would trigger the requirement to disclose all finance charges and the true APR under Regulation Z?
• What requirement was included in the Dodd-Frank Act for mortgage lenders?
• What is the primary goal of the Servicemembers Civil Relief Act (SCRA)?
• Which Act amended the Truth in Lending Act to establish disclosure requirements for high-cost mortgages?
• What is the role of the closing disclosure in the mortgage process?
• What regulation prohibits sellers from requiring the use of a specific title company as a sale condition?
• Who enforces the Fair Housing Act?
• Which federal law requires lenders to provide borrowers with information about their credit rights?
• What was the primary purpose of enacting the Truth in Lending Act (TILA)?
• What does a borrower buying down the interest rate on their mortgage loan appear as on the Loan Estimate?
• What is the purpose of the RESPA law?
• Which rule allows consumers to opt out of sharing their private information?
• Which of these is not a requirement for a loan subject to the terms of Section 32 of HOEPA?
• Which of the following is considered a nontraditional mortgage product?
• Which law introduced the concept of the "ability-to-repay" rule?
• If a borrower’s first loan is subject to Section 32, what must an MLO require before closing?
• What is another name for Regulation Z?
• Which federal law requires disclosure about annual percentage rates and finance charges?
• What does TRID stand for in mortgage lending?
• Under the SAFE Act, what is required for MLOs to practice legally?
• What is the purpose of GSEs like Fannie Mae and Freddie Mac?
• Which document outlines the terms of a mortgage loan?
• Which regulation requires clear disclosures about loan costs to consumers?
• What are the terms of the "cooling off" period if a loan falls under HOEPA?
• What type of information is a lender NOT required to record for HMDA compliance?
• What type of mortgage typically requires no down payment?
• Which act aims to eliminate abusive practices in the real estate settlement process?
• For which type of properties does RESPA require the use of the Closing Disclosure?
• The Real Estate Settlement Procedures Act requires that the borrower sign the Loan Estimate at which point after the initial application?
• What are the penalties for violating the Truth in Lending Act (TILA)?
• What is the primary purpose of a "good faith estimate"?
• Which federal legislation allows borrowers to receive a free copy of their credit report annually?
• Which act requires lenders to provide a written reason for the rejection of credit within 30 days of a loan application?
• How can a lender determine if a loan is considered a subprime loan?
• The only mortgage that Lucille's lender would give her is a high-cost loan that defers interest payments for the first two years. However, a high-cost loan that results in negative amortization is illegal under what law?
• What does the term "predatory lending" refer to?
• Under HOEPA, what criteria distinguish a high-cost mortgage?
• What must be disclosed about settlement service providers under RESPA?
• When is a $100,000 loan classified as a Section 32 loan based on points and fees?
• When is a mortgage loan originator not required to provide a Loan Estimate?
• Which government agency is responsible for overseeing the Truth in Lending Act (TILA)?
• Which law prohibits discrimination based on sex, race, and marital status?
• Who is responsible for enforcing the provisions of the SAFE Act?
• How often are lenders required to provide borrowers with a copy of their current mortgage statement?
• Which of the following statements about loan estimates is true?
• The Consumer Financial Protection Bureau on October 3, 2015, implemented a combined disclosure that meets the disclosure requirements of TILA and what?
• Which feature is NOT included in the Dodd-Frank Act definition of a qualified mortgage?
• What type of loans does RESPA typically govern?
• Red Flag Rules are part of what federal law?
• Which regulatory body implements HMDA?
• What is the primary purpose of the Fair Credit Reporting Act (FCRA)?
• What is the primary focus of the Equal Credit Opportunity Act (ECOA)?
• Your applicant receives child support for her seven-year-old son. Can you gross up the child support payments she receives?
• What is typically included in the estimated closing costs provided to a borrower?
• What is the minimum number of hours of continuing education required for Mortgage Loan Originators (MLOs) each year?
• Within how many calendar days must a lender cure a tolerance violation?
• How long must a mortgage loan originator keep documentation related to a revised Loan Estimate?
• A mortgage broker rents office space from a title company at a discount in exchange for referring customers for settlement services. Which federal law does this arrangement violate?
• To comply with the FACT Act, what must a mortgage loan originator do with loan applications and documentation?
• FHA's Annual Mortgage Insurance Premium (MIP) will remain in place throughout the life of the loan if what condition is met?
• What does the acronym MLO stand for?
• What is a common requirement for mortgage lenders under federal law?
• What does the term "loan to value ratio" (LTV) measure?
• What document requires that all compensation for real estate broker and mortgage broker be disclosed?
• Under the Truth in Lending Act, what is a "trigger term"?
• How many hours of education are required for Mortgage Loan Originators (MLOs) before they can obtain a license under the SAFE Act?
• How long does a lender have to notify an applicant of an adverse action under ECOA?
• Which of the following is NOT a stated purpose of the Home Mortgage Disclosure Act (HMDA)?
• Who is responsible for the administration of TILA as per the Dodd-Frank Act?
• What must lenders disclose to promote informed use of consumer credit under TILA?
• Which feature is considered toxic under the qualified mortgage (QM) rule?
• What is the main purpose of the Fair Credit Reporting Act (FCRA)?
• Which of these is not a trigger for a High-Cost loan?
• Who oversees the enforcement of the Fair Housing Act?
• Which of the following would prevent someone from obtaining their registration as an MLO working for a qualified depository institution?
• Which act emphasizes fair lending practices in the mortgage industry?
• What does RESPA stand for?
• Which disclosure required by TRID summarizes potential closing costs for the borrower?
• What legislation does NOT allow a lender to consider family size when qualifying income?
• The Equal Credit Opportunity Act mandates that lenders must provide a reason for denial within how many days?
• What documentation is required to be provided upon the request of a duplicate loan estimate?
• What does RESPA stand for?
• What law requires state-licensed mortgage loan originators to take approved prelicensing education?
• Which fee can be collected prior to delivery of a Loan Estimate and Closing Disclosure?
• Under which act must financial institutions disclose their information-sharing practices to customers?
• Under what circumstance would the Fair Credit Reporting Act apply to financial institutions?
• Regulation Z applies to all:
• According to the Home Mortgage Disclosure Act, why is demographic information collected?
• What is the primary purpose of private mortgage insurance (PMI)?
• What does the acronym FHA stand for?
• Which government agency monitors compliance with the Equal Credit Opportunity Act (ECOA)?
• What does the acronym TILA stand for?
• What is the maximum allowable increase for annual percentage rates (APR) under TILA for closed-end credit transactions?
• What is one of the key disclosures required by TILA?
• What is a loan on a borrower's primary dwelling with an APR exceeding 1.5% of the applicable average prime offer rate for a first lien loan called?
• RESPA applies to all:
• When must a borrower receive the Closing Disclosure?
• When is the Mortgage Call Report due and required to be filed?
• Which rule prohibits mortgage relief companies from collecting advance fees until a written offer has been provided?
• Which regulation governs the disclosure of certain financial information to consumers?
• What does the DTI ratio represent in mortgage lending?
• Which aspect of credit information does the Fair Credit Reporting Act (FCRA) pertain to?
• What is the impact of the Consumer Financial Protection Bureau on mortgage lending?
• What loan type has a three business-day rescission period?
• Which disclosure must include the Annual Percentage Rate (APR) to comply with TILA?
• Which law ensures that some borrowers have the right of rescission for three business days after a loan contract is signed?
• What does TILA stand for?
• When complying with HMDA, a loan originator may inquire about which of the following statuses?
• What is the primary purpose of the Fair Housing Act?
• Which of the following can be reported on a credit report for longer than seven years according to the Fair Credit Reporting Act?
• Which agency is responsible for administering the Equal Credit Opportunity Act?
• What does HECM stand for, and who is it primarily aimed at?
• Under which conditions is a loan considered high-cost according to TILA?
• Which is NOT a credit reporting agency recognized under the FCRA?
• Which of the following can be a potential source of discrimination according to HMDA?
• Which federal legislation requires that race information be included on loan applications?
• What is one primary purpose of the Fair Credit Reporting Act (FCRA)?
• Which of the following occurrences would NOT prevent someone from obtaining a mortgage loan originator license under Regulation H?
• Which federal act created the Consumer Financial Protection Bureau?
• Which circumstance disqualifies an applicant for a loan originator license?
• What is a common structure for a mortgage loan originator’s compensation?
• What are the three major credit bureaus?
• Which act requires MLOs to complete continuing education on a regular basis?
• What is the primary purpose of the Home Mortgage Disclosure Act (HMDA)?
• Which federal legislation requires visual determination or surname basis for race or national origin when not provided by the borrower?
• Which of the following loans would be considered traditional?
• What can happen to a lender who violates TILA?
• What does the term "qualified mortgage" refer to?
• What is the primary purpose of the SAFE Act?
• Title V of the Housing and Economic Recovery Act of 2008 is more commonly known as the?
• According to new FHA rules, how long must mortgage insurance for FHA loans over 90% LTV be paid?
• Which item is NOT included in the calculation of the annual percentage rate?
• Which federal legislation implements Section 32 that governs high cost/high interest loans?
• Which federal law requires financial institutions to implement a written identity theft prevention program?
• What does the term 'predatory lending' commonly refer to?
• What is the purpose of a pre-approval in the mortgage process?
• Which of the following is NOT regulated by RESPA?
• Which disclosure informs borrowers about total settlement charges?
• Under what circumstance must a lender send a Notice of Action Taken?
• Which law mandates that the terms of “high-cost” mortgages be disclosed to borrowers?
• What information is a mortgage loan originator prohibited from asking a borrower applying for a mortgage?
• Which law mandates that borrowers receive a Home Loan Toolkit?
• Which part of a loan is defined under Section 32 regarding fees and points?
• What question are creditors NOT permitted to ask when taking a mortgage loan application?
• When does the Homeownership Equity Protection Act not require a lender to verify a borrower's repayment ability?
• What is Regulation B also known as?
• Which of the following is a requirement of the SAFE Act?
• Which factor is NOT considered when calculating "average charge" for settlement services?
• What type of income can always be excluded when qualifying a borrower for a mortgage loan?
• What is the penalty for noncompliance with RESPA?
• Under which federal legislation does the consumer have the right to receive a copy of the appraisal report on a loan collateral?
• According to regulations, how long must the annual mortgage insurance premium be paid before it can be canceled for loans with an LTV over 90%?
• What is the effect of the SAFE Act on the licensing requirements for MLOs?
• Who does NOT share responsibility for enforcing the provisions of the National Do Not Call Registry?
• What does the Loan Estimate provide to consumers?
• What is one of the effects of the Dodd-Frank Act on MLO licensing?
• How does the ECOA protect applicants in the lending process?
• How soon after required disclosures are provided may a loan close?
• Which act is also referred to as Regulation Z?
• How many years is the record retention requirement under the Loan Estimate (LE)?
• What is a key feature of Regulation Z?
• What is a "fixed-rate mortgage"?
• Why is a borrower asked about their marital status during the loan application process?
• Which act establishes consumer protections related to high-cost home loans?
• What financial information is NOT required to be listed on the Loan Estimate?
• Which of the following loans would NOT be excluded under the definition of a higher-priced loan?
• What does the Equal Credit Opportunity Act prohibit?
• Which of the following is NOT a requirement of the Real Estate Settlement Procedures Act?
• Which law mandates that lenders use an annual percentage rate (APR) for informed borrower comparisons?
• What is the significance of the Home Mortgage Disclosure Act (HMDA)?
• In the context of mortgages, what does "escrow" refer to?
• Regulation V is also known as the:
• What should a loan originator NOT consider when qualifying a borrower?
• On Form 1003, Section X: Information for Government Monitoring Purposes is used to comply with which federal law?
• Which statement about loan origination fees on a Loan Estimate is false?
• Which federal regulation mandates that the Loan Estimate be given to the borrower within three business days of the loan application?
• What is the penalty for mortgage fraud under federal law?
• Why is the Mortgage Loan Originator Test important for lenders?
• One purpose of the Fair and Accurate Credit Transaction Act is to prevent which of the following?
• If a home’s value increases by what percentage or more within 6 months is a second appraisal required?
• Which federal law is NOT primarily aimed at addressing privacy and identity protection with respect to credit?
• Which required topic must a state-licensed loan originator cover as part of their continuing education according to the SAFE Act?
• What is the purpose of the MARS Rule?
• Under RESPA, what is the maximum fine imposed for each instance of a kickback?
• What is the main function of the Consumer Financial Protection Bureau (CFPB)?
• What is the only authorized website for obtaining a free annual credit report?
• Which federal regulation limits the duration that adverse collection information may appear on a consumer's credit report?
• Which cost is included in the APR calculation on the closing disclosure forms?
• According to the FCRA, how many days do information furnishers usually have to respond to a consumer dispute?
• Which of the following is NOT a trigger for a Higher-Priced Mortgage Loan?
• Which regulation is associated with the prohibition of excessive points and fees on high-cost loans?
• Which of the following is a requirement under the RESPA?
• The right of rescission provided under Regulation Z is the right to:
• Which entity is responsible for overseeing compliance with the RESPA?
• The addition of a uniform state content section to the National SAFE MLO Test component means that what?
• What is the main objective of the Equal Credit Opportunity Act (ECOA)?
• Which of the following is an acceptable condition on which to base a mortgage loan originator's compensation?
• Which fee is not prohibited under Section 32 and/or Section 35 of the Truth-In-Lending Act?
• What kind of loans are covered under the terms of Section 32?
• Which financial information is NOT required on the closing disclosure under TILA?
• What triggers the requirement for a second Loan Estimate in a mortgage transaction?
• Under the Fair Housing Act, which of the following is NOT considered a protected class?
• Which data is NOT collected for HMDA monitoring?
• The SAFE Act requires what specific educational requirement for state-licensed loan originators?
• In what context does 5% of the loan amount become significant for loans under the Section 32 classification?
• What are considered "high-cost mortgages" according to HOEPA?
• What does the acronym DTI stand for in mortgage lending?
• Which of the following is not a prohibited loan term for a high-cost loan?
• Which financial arrangement is exempt from the Real Estate Settlement Procedures Act?
• For how long must lenders retain records of compliance with TILA?
• What is a "duplicate loan estimate" in mortgage lending?
• Which act requires lenders to inform applicants about the outcome of their mortgage application?
• What is the standard duration for a loan originator license renewal period?
• What does the Equal Credit Opportunity Act (ECOA) prohibit?
• Which act provides a specific definition of a nontraditional loan?
• What does the SAFE Act primarily establish?
• Which rule requires financial institutions to maintain safeguards to protect customer information?
• Why must lenders comply with RESPA?
• Which of the following is a responsibility of Mortgage Loan Originators?
• Who is responsible for enforcing anti-money laundering compliance in the mortgage industry?
• Which of the following individuals is exempt from licensing under the SAFE Act?