Mortgage Loan Originator Mortgage Loan Originator 3

Question 1

Under the SAFE Act, how many hours of continuing education must a licensed MLO complete annually to maintain their license?

Accepted Answer

8 hours

Answer

The SAFE Act requires licensed MLOs to complete at least 8 hours of NMLS-approved continuing education annually.

Question 2

A property appraises for $280,000 and the borrower makes a $42,000 down payment. What is the loan-to-value (LTV) ratio?

Accepted Answer

85%

Answer

LTV = ($280,000 - $42,000) / $280,000 = $238,000 / $280,000 = 85%.

Question 3

What is the primary purpose of the Home Mortgage Disclosure Act (HMDA)?

Accepted Answer

To provide public data to identify potential discriminatory lending patterns

Answer

HMDA requires financial institutions to collect and report loan data to help regulators identify discriminatory lending practices.

Question 4

In a purchase transaction, a seller agrees to pay 3% of the purchase price toward the buyer's closing costs. This arrangement is called:

Accepted Answer

An interested party contribution

Answer

When a seller or other interested party contributes toward the buyer's costs, it is formally called an interested party contribution (IPC), subject to agency limits.

Question 5

An adjustable-rate mortgage has a 5/1 structure with a 2/2/5 cap. If the start rate is 4%, what is the maximum rate the loan can reach over its lifetime?

Accepted Answer

9%

Answer

The lifetime cap of 5% over the start rate means 4% + 5% = 9% maximum.

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Mortgage Loan Originator 3