NMLS General Mortgage Knowledge Questions and Answers

Question 1

A borrower is seeking a mortgage and has a gross monthly income of $6,000.
Their proposed monthly housing expense (PITI) is $1,800.
They also have a $450 monthly car payment and a $250 monthly student loan payment.
What is the borrower's back-end debt-to-income (DTI) ratio?

Accepted Answer

41.7%

Answer

30%

Answer

37.5%

Answer

45%

Question 2

Under the SAFE Act, what is the minimum number of continuing education hours a state-licensed mortgage loan originator must complete annually to renew their license?

Accepted Answer

3 hours of Federal Law, 2 hours of Ethics, 2 hours of Non-Traditional Mortgages, and 1 hour of electives.

Answer

4 hours of Federal Law, 2 hours of Ethics, and 2 hours of electives.

Answer

8 hours total, with the specific topic breakdown determined by each state.

Answer

20 hours of pre-licensing education must be repeated every two years.

Question 3

A borrower receives a Qualified Written Request (QWR) response from their mortgage servicer regarding a dispute. The borrower is unsatisfied with the servicer's explanation. Under which section of RESPA would the servicer's obligations regarding this QWR be detailed?

Accepted Answer

Section 6

Answer

Section 8

Answer

Section 9

Answer

Section 10

Question 4

A mortgage loan originator is paid a commission that is a percentage of the loan amount. The MLO realizes they can increase their commission on a particular loan by steering the borrower into a product with a higher interest rate and less favorable terms for the consumer. This action is a direct violation of the principles outlined in which regulation?

Accepted Answer

Regulation Z (TILA)

Answer

The Fair Housing Act

Answer

The Equal Credit Opportunity Act (ECOA)

Answer

The SAFE Act

Question 5

Which of the following best describes a 'mortgage rate lock'?

Accepted Answer

A lender's guarantee to hold a specific interest rate for a defined period while the loan is processed.

Answer

A commitment from the borrower to accept the loan terms offered.

Answer

A permanent interest rate that cannot be changed for the life of the loan.

Answer

The final interest rate listed on the Closing Disclosure.

Question 6

An individual performs only administrative and clerical tasks for a licensed mortgage loan originator, such as gathering documents and confirming appointment times. This individual does not take applications or negotiate loan terms. According to the SAFE Act, this individual is:

Accepted Answer

Not required to be a licensed mortgage loan originator.

Answer

Required to be a state-licensed mortgage loan originator.

Answer

Violating RESPA by performing settlement services without a license.

Answer

Acting as a mortgage broker and must register with the state.

A borrower is seeking a mortgage and has a gross monthly income of $6,000.Their proposed monthly housing expense (PITI) is $1,800.They also have a $450 monthly car payment and a $250 monthly student loan payment.What is the borrower's back-end debt-to-income (DTI) ratio?

A borrower is seeking a mortgage and has a gross monthly income of $6,000.
Their proposed monthly housing expense (PITI) is $1,800.
They also have a $450 monthly car payment and a $250 monthly student loan payment.
What is the borrower's back-end debt-to-income (DTI) ratio?