Mortgage Loan Originator Mortgage Loan Originator MCQ 5

Question 1

A 'yield spread premium' (YSP) historically referred to:

Accepted Answer

Compensation paid by a lender to a broker for delivering a loan at an above-par interest rate

Answer

A yield spread premium was compensation a lender paid to a mortgage broker when the broker originated a loan at an interest rate higher than the par rate.

Question 2

Which of the following is NOT one of the three C's of credit underwriting?

Accepted Answer

Convenience

Answer

The three C's of mortgage underwriting are Capacity (ability to repay), Credit (credit history), and Collateral (property value)—Convenience is not one of them.

Question 3

A 'no-cost' mortgage loan typically means:

Accepted Answer

Closing costs are rolled into the loan balance or covered by a higher interest rate

Answer

In a no-cost mortgage, closing costs are either financed into the loan amount or offset by a higher interest rate that generates lender credits.

Question 4

Under the SAFE Act, an individual who takes a residential mortgage loan application and offers or negotiates terms is considered a:

Accepted Answer

Mortgage loan originator

Answer

The SAFE Act defines a mortgage loan originator as any individual who takes a residential mortgage loan application or offers or negotiates terms of such a loan.

Question 5

Which type of income is typically considered the most stable and easiest to verify for mortgage qualification purposes?

Accepted Answer

W-2 salaried income

Answer

W-2 salaried income is considered the most stable and straightforward to document, as it is consistent and verifiable through pay stubs and tax returns.

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Mortgage Loan Originator MCQ 5