FREE Mortgage Loan Originator Trivia Questions and Answers

Question 1

What does it imply when TILA clauses talk about a creditor giving credit to a consumer?

Accepted Answer

People, not a company

Answer

Sole proprietorships and partnerships

Answer

Corporations that were formed by consumers

Answer

Businesses, if not more than a sole proprietorship

Question 2

All of the following are included in the TILA definition of credit, with the exception of:

Accepted Answer

For any amount less than $1 million dollars

Answer

Not for agricultural purposes

Answer

For other than business or commercial purposes

Answer

For personal, household, or family purposes

Question 3

All of the following are considered business and commercial use under TILA, with the exception of:

Accepted Answer

Owner-occupied single family residence

Answer

Tenant-occupied fourplex

Answer

When credit is extended to purchase or rehabilitate a non-owner occupied house

Answer

Non-owner occupied single family residence

Question 4

What TILA standard distinguishes a company or commercial loan from owner-occupancy?

Accepted Answer

If the owner will occupy the house for more than 14 days

Answer

If the owner will occupy the house for 51% of the year

Answer

If the owner will occupy the house for a minimum of a year

Answer

If the owner will occupy the house for more than three (3) business days

Question 5

According to TILA, revealing which of the following will typically inform customers of the true cost of borrowing money:

Accepted Answer

APR

Answer

TIP

Answer

Finance charge

Answer

The nominal rate

Question 6

Which of the following is done by TILA?

Accepted Answer

Regulates the disclosure of interest rates and finance charges

Answer

Sets limits on interest rates

Answer

Establishes a three (3) business day right of rescission on all purchase money loans

Answer

Sets limits on certain finance charges

Question 7

Which of the following information types would the Loan Estimate also contain, in addition to interest rates, APR, and other costs:

Accepted Answer

All of the above

Answer

Payment summary table indicating initial interest rate and corresponding monthly payments

Answer

Name and contact information of lender

Answer

Subject property address

Question 8

According to TILA, the payment summary table for ARMs must contain all of the information below, with the exception of:

Accepted Answer

The minimum and easiest the payment can be in the first five years of the loan

Answer

The worst case example showing the maximum payment and rate over the life of the loan.

Answer

The maximum interest rate possible in the first five years of the loan.

Answer

The maximum payment possible in the first five years of the loan.

Question 9

When multiple interest rates are in effect during the loan's term, how must the MLO publish the APR?

Accepted Answer

There is still only one APR.

Answer

The MLO will be unable to disclose an APR in this situation.

Answer

The MLO must average the APRs that may apply.

Answer

The MLO must disclose the APR that will apply during a specific time during the term of the loan.

Question 10

In a loan transaction, all of the following are accurate, with the exception of:

Accepted Answer

The finance charge could be a charge payable in a comparable cash transaction.

Answer

The finance charge can include fees charged by someone other than the creditor.

Answer

Fees charged by a mortgage broker are finance charges even if the creditor doesn’t retain any portion of the charge.

Answer

The finance charge is imposed directly or indirectly by the creditor as a condition of the extension of credit.