Mortgage Loan Originator Assessment 2

Question 1

A borrower's gross monthly income is $6,000 and total monthly debt payments are $2,100. What is their debt-to-income (DTI) ratio?

Accepted Answer

35%

Answer

DTI = total monthly debt / gross monthly income = $2,100 / $6,000 = 35%.

Question 2

Which federal law requires lenders to provide borrowers with a Loan Estimate within three business days of receiving a loan application?

Accepted Answer

TILA-RESPA Integrated Disclosure (TRID)

Answer

TRID, which integrates TILA and RESPA disclosures, requires the Loan Estimate be delivered within three business days of application.

Question 3

A property appraises for $280,000 and the borrower wants to borrow $238,000. What is the loan-to-value (LTV) ratio?

Accepted Answer

85%

Answer

LTV = loan amount / appraised value = $238,000 / $280,000 = 85%.

Question 4

Under the SAFE Act, which entity maintains the Nationwide Multistate Licensing System (NMLS) registry?

Accepted Answer

Conference of State Bank Supervisors (CSBS)

Answer

The NMLS is operated by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.

Question 5

Which type of mortgage index is based on U.S. Treasury securities and commonly used for adjustable-rate mortgages?

Accepted Answer

Constant Maturity Treasury (CMT)

Answer

The Constant Maturity Treasury (CMT) index is widely used as a benchmark for ARM loans and is based on U.S. Treasury yields.

Mortgage Loan Originator Practice Test