Mortgage Loan Originator Mortgage Loan Originator MCQ 2

Question 1

Under RESPA, a lender must provide the Loan Estimate to a borrower within how many business days of receiving a loan application?

Accepted Answer

3 business days

Answer

RESPA requires the Loan Estimate to be delivered or mailed within 3 business days of receiving a completed loan application.

Question 2

Which federal law prohibits discrimination in residential real estate transactions based on race, color, national origin, religion, sex, familial status, or disability?

Accepted Answer

Fair Housing Act

Answer

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on the seven protected classes.

Question 3

A borrower's front-end debt-to-income (DTI) ratio compares monthly housing expenses to which figure?

Accepted Answer

Gross monthly income

Answer

The front-end DTI ratio divides total monthly housing expenses by the borrower's gross monthly income.

Question 4

What is the primary purpose of Private Mortgage Insurance (PMI)?

Accepted Answer

To protect the lender if the borrower defaults

Answer

PMI protects the lender, not the borrower, in the event the borrower defaults on the mortgage.

Question 5

Which index is most commonly used for adjustable-rate mortgages (ARMs) tied to the Secured Overnight Financing Rate?

Accepted Answer

SOFR

Answer

SOFR (Secured Overnight Financing Rate) replaced LIBOR as the primary benchmark index for most new ARM products.

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Mortgage Loan Originator MCQ 2