Mortgage Loan Originator Assessment 3

Question 1

Under ECOA, within how many days must a lender provide an adverse action notice after denying a credit application?

Accepted Answer

30 days

Answer

ECOA requires creditors to notify applicants of adverse action within 30 days of receiving a completed application.

Question 2

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:

Accepted Answer

Predatory lending

Answer

Predatory lending involves placing borrowers in unsuitable loan products for the financial gain of the lender or originator.

Question 3

Which document provides the final, binding figures for a mortgage closing, including actual closing costs?

Accepted Answer

Closing Disclosure

Answer

The Closing Disclosure replaced the HUD-1 under TRID and must be provided at least three business days before closing.

Question 4

Which of the following is NOT considered a prohibited basis for discrimination under the Fair Housing Act?

Accepted Answer

Occupation

Answer

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.

Question 5

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:

Accepted Answer

Civil and criminal penalties

Answer

Operating without a valid MLO license violates the SAFE Act and can lead to civil fines and criminal prosecution.

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Assessment 3