Assessment Flashcards
7 cards from real Mortgage Loan Originator practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Assessment flashcards as text
Under ECOA, within how many days must a lender provide an adverse action notice after denying a credit application?
Answer: 30 days
ECOA requires creditors to notify applicants of adverse action within 30 days of receiving a completed application.
A loan officer steers a borrower who qualifies for a conventional loan into a higher-cost subprime product to earn a larger commission. This is an example of:
Answer: Predatory lending
Predatory lending involves placing borrowers in unsuitable loan products for the financial gain of the lender or originator.
Which document provides the final, binding figures for a mortgage closing, including actual closing costs?
Answer: Closing Disclosure
The Closing Disclosure replaced the HUD-1 under TRID and must be provided at least three business days before closing.
Which of the following is NOT considered a prohibited basis for discrimination under the Fair Housing Act?
Answer: Occupation
Occupation is not a protected class under the Fair Housing Act; the seven protected classes include race, color, national origin, religion, sex, familial status, and disability.
An MLO's license expires and they continue to originate loans for two weeks before renewing. Under the SAFE Act, this behavior could result in:
Answer: Civil and criminal penalties
Operating without a valid MLO license violates the SAFE Act and can lead to civil fines and criminal prosecution.
When calculating qualifying income for a self-employed borrower using tax returns, which income figure is typically used?
Answer: Net profit after adding back depreciation and depletion
For self-employed borrowers, lenders use net income from tax returns and add back non-cash deductions like depreciation and depletion.
A borrower wants to use gift funds for their down payment on a conventional loan. Which of the following is required?
Answer: A signed gift letter and evidence that the funds were transferred
Conventional guidelines require a gift letter stating no repayment is expected and documentation showing the transfer of funds.