Mortgage Loan Originator 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 Mortgage Loan Originator flashcards as text
A borrower receives a gift of $15,000 from a parent to use toward a down payment on a conventional loan. What document is required to verify this is not a loan?
Answer: A gift letter signed by the donor
A gift letter signed by the donor stating the funds are a gift with no repayment expectation is required by lenders for down payment gifts.
The Ability-to-Repay (ATR) rule requires lenders to make a reasonable, good-faith determination that a borrower can repay a loan. Which loan category is presumed to comply with the ATR rule?
Answer: Qualified Mortgage (QM)
Qualified Mortgages receive a safe harbor or rebuttable presumption of compliance with the ATR rule under CFPB regulations.
Which federal law prohibits lenders from using race, color, national origin, religion, sex, familial status, or disability as factors in residential real estate transactions?
Answer: Fair Housing Act (FHA)
The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on the seven protected classes.
An MLO fails to renew their state license before it expires and continues originating loans. Under the SAFE Act, this individual is:
Answer: Operating illegally and subject to fines and potential criminal prosecution
Originating loans without a valid license is a violation of the SAFE Act, exposing the individual to fines and potential criminal penalties.
In mortgage lending, what is the purpose of a title search?
Answer: To identify any liens, encumbrances, or ownership defects on the property
A title search examines public records to uncover any claims, liens, or defects that could affect the lender's or buyer's ownership rights.
A USDA Rural Development Guaranteed loan requires no down payment but does include which of the following fees?
Answer: Upfront Guarantee Fee and annual fee
USDA loans charge an upfront guarantee fee (typically 1% of the loan amount) and an annual fee (typically 0.35%) instead of traditional PMI.
Under TRID, the Closing Disclosure must be provided to the borrower at least how many business days before consummation?
Answer: 3 business days
TRID requires lenders to deliver the Closing Disclosure at least three business days before loan consummation.