Mortgage Loan Originator MLO 4

Question 1

An MLO receives a $50 gift card from a real estate agent as a thank-you for referring clients. Under RESPA Section 8, this is:

Accepted Answer

Prohibited, as RESPA forbids any thing of value exchanged for referrals of settlement service business

Answer

RESPA Section 8 prohibits giving or receiving any thing of value—regardless of dollar amount—in exchange for referrals of settlement service business; there is no de minimis exception.

Question 2

The SAFE Act requires state-licensed MLOs to complete how many hours of continuing education annually to maintain their license?

Accepted Answer

8 hours

Answer

The SAFE Act mandates a minimum of 8 hours of annual continuing education for state-licensed MLOs, covering federal law, ethics, nontraditional mortgage products, and electives.

Question 3

A lender charges a borrower a 4% origination fee on a $300,000 loan. Under the ATR/QM rule, which type of QM is most likely affected by this fee level?

Accepted Answer

General QM (Safe Harbor), as points and fees cannot exceed 3% of the total loan amount for loans of $100,000 or more

Answer

For General QM loans of $100,000 or more, total points and fees cannot exceed 3% of the total loan amount; a 4% origination fee alone would disqualify the loan as a General QM.

Question 4

Under Regulation Z's HOEPA rules, a closed-end consumer credit transaction secured by a consumer's principal dwelling is a high-cost mortgage if its APR exceeds the APOR by more than how many percentage points for a first-lien loan?

Accepted Answer

6.5 percentage points

Answer

A first-lien loan is a HOEPA high-cost mortgage if its APR exceeds the Average Prime Offer Rate (APOR) by more than 6.5 percentage points.

Question 5

Which of the following correctly describes the difference between pre-qualification and pre-approval in the mortgage process?

Accepted Answer

Pre-qualification is an informal assessment based on unverified information; pre-approval involves verification of income, assets, and credit

Answer

Pre-qualification is a preliminary estimate based on self-reported data, while pre-approval involves a formal review of verified documents including credit report, income verification, and asset statements.

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Practice Test

Mortgage Loan Originator MLO 4