Mortgage Loan Originator MCQ 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 MCQ flashcards as text
Under RESPA, a lender must provide the Loan Estimate to a borrower within how many business days of receiving a loan application?
Answer: 3 business days
RESPA requires the Loan Estimate to be delivered or mailed within 3 business days of receiving a completed loan application.
Which federal law prohibits discrimination in residential real estate transactions based on race, color, national origin, religion, sex, familial status, or disability?
Answer: Fair Housing Act
The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on the seven protected classes.
A borrower's front-end debt-to-income (DTI) ratio compares monthly housing expenses to which figure?
Answer: Gross monthly income
The front-end DTI ratio divides total monthly housing expenses by the borrower's gross monthly income.
What is the primary purpose of Private Mortgage Insurance (PMI)?
Answer: To protect the lender if the borrower defaults
PMI protects the lender, not the borrower, in the event the borrower defaults on the mortgage.
Which index is most commonly used for adjustable-rate mortgages (ARMs) tied to the Secured Overnight Financing Rate?
Answer: SOFR
SOFR (Secured Overnight Financing Rate) replaced LIBOR as the primary benchmark index for most new ARM products.
Under the SAFE Act, MLO licenses must be renewed:
Answer: Annually
The SAFE Act requires MLO licenses to be renewed annually, typically by December 31 each year.
A 'rate lock' in mortgage lending refers to:
Answer: A guarantee that the interest rate will not change for a specified period
A rate lock is a lender's commitment to hold a specific interest rate for a set period while the loan is being processed.