NMLS Mortgage Loan Origination Activities Questions and Answers

Question 1

A mortgage loan originator receives a call from a potential borrower who provides their name, social security number, the address of the property they want to purchase, an estimated value for the property, and their annual income.
According to the TILA-RESPA Integrated Disclosure (TRID) Rule, what additional piece of information is required before the MLO is obligated to provide a Loan Estimate?

Accepted Answer

The borrower's requested loan amount

Answer

The borrower's consent to a credit check

Answer

The type of loan product desired

Answer

A fully executed purchase contract

Question 2

A borrower is purchasing a home with a sales price of $400,000 and an appraised value of $410,000. They are obtaining a first mortgage of $320,000 and have a Home Equity Line of Credit (HELOC) for $40,000 that will be used for home improvements immediately after closing. What is the Combined Loan-to-Value (CLTV) ratio for this transaction?

Accepted Answer

90%

Answer

80%

Answer

87.8%

Answer

88%

Question 3

Under the Equal Credit Opportunity Act (ECOA) and its Valuations Rule, a creditor must provide a copy of the appraisal report to the applicant for a first-lien mortgage:

Accepted Answer

Promptly upon completion, or no later than 3 business days before consummation.

Answer

Only if the loan application is approved and proceeds to closing.

Answer

Within 30 days after the loan has been consummated.

Answer

Upon receiving a written request from the borrower after closing.

Question 4

Which of the following fees, when listed on a Loan Estimate, is subject to a zero tolerance for variance, meaning it cannot increase on the final Closing Disclosure?

Accepted Answer

The creditor's origination charge

Answer

Prepaid interest

Answer

Fees for a title services provider chosen by the borrower from the lender's list

Answer

Recording fees

Question 5

A mortgage loan originator's compensation plan includes a bonus structure where the MLO receives a higher commission percentage for originating loans with an interest rate above the company's par rate. This compensation practice is a violation of which regulation?

Accepted Answer

Truth in Lending Act (TILA)

Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Fair Housing Act (FHA)

Answer

Home Mortgage Disclosure Act (HMDA)

Question 6

An MLO has received all six required pieces of information to constitute a complete mortgage loan application on Monday. According to the TRID rule, what is the latest day the MLO's company must mail or deliver the Loan Estimate to the applicant?

Accepted Answer

Thursday

Answer

Tuesday

Answer

Wednesday

Answer

Friday