Free MLO: Mortgage Loan Origination (SAFE MLO) Exam Questions and Answers

A borrower obtains a 2-1 buydown mortgage loan with a 30-year term and a 6% note rate. The borrower's payments will be calculated based upon which of the following?

• AA. 4% interest in year 1 and 6% interest in years 2 through 30
• BB. 4% interest in years 1 and 2 and 6% interest in years 3 through 30
• CC. 4% interest in year 1, 5% interest in year 2 and 6% interest in years 3 through 30
• DD. 5% interest in years 1 and 2 and 6% interest in years 3 through 30

According to Fannie Mae, a loan with a purchase transaction loan amount of $160,000, sales price of $180,000, and an appraised value of $200,000 has a loan-to- value ratio of what percentage?

• AA. 80%
• BB. 88%
• CC. 89%
• DD. 90%

Which of the following factors is not required to be taken into account when determining a borrower's ability to repay a loan?

• AA. Current debt obligations, alimony and child support
• BB. Credit history
• CC. Proceeds from the sale of the property securing the loan
• DD. Monthly payment on simultaneous loans

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

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

Which of the following practices is a prudent and reasonable cybersecurity precaution regarding laptop computers?

• AA. A laptop should never be taken out of the office.
• BB. A laptop should be shared by no more than five people.
• CC. Passwords should only be shared with a direct supervisor.
• DD. A laptop should automatically shut down and require a new login if not used for a period of time.

Which of the following settlement service charges is considered a finance charge for the purpose of calculating a loan's APR?

• AA. Credit report fee
• BB. Origination charge
• CC. Transfer tax charges
• DD. Public record recording fee

Which of the following characteristics is unique to a home equity line of credit (HELOC)?

• AA. A borrower is permitted to receive additional advances.
• BB. A borrower is permitted to make interest-only payments for the term of the loan.
• CC. A borrower is permitted to borrow more than the property is worth.
• DD. A borrower is permitted to sell the property without paying off the loan.

When providing documents to a state regulator regarding a consumer complaint that was submitted to the state regulator, a licensed company should:

• AA. Send the documents by U.S. mail rather than electronically for privacy reasons.
• BB. Contact the consumer to get their authorization to provide documents to the regulator.
• CC. Provide the documents along with the company's explanation of what caused the complaint.
• DD. Redact any names and personal information before providing the documents for privacy reasons.

Which of the following documents is required to be issued to a customer when a mortgage loan originator is also a real estate broker on the same transaction?

• AA. Loan application
• BB. Appraisal disclosure
• CC. Special information booklet
• DD. Affiliated business arrangement

Which of the following circumstances may indicate fraud with respect to the assets a borrower will use for closing?

• AA. Bank deposits that are not supported by income or other disclosures
• BB. Disclosure of gift funds
• CC. Parental loans disclosed but not yet received
• DD. Borrower's receipt of a large bonus from an employer