SAFE Origination Activities 2

Question 1

A borrower asks an MLO to submit their loan application to multiple lenders simultaneously without disclosing this to each lender. What should the MLO do?

Accepted Answer

Refuse and explain that undisclosed multiple submissions are improper

Answer

Submit to all lenders as requested since it benefits the borrower

Answer

Submit to all lenders but note it on the application

Answer

Submit only to the lender most likely to approve the loan

Question 2

Under RESPA, which of the following is prohibited when an MLO refers a borrower to a settlement service provider?

Accepted Answer

Receiving a fee or thing of value for making the referral

Answer

Recommending a provider the MLO has used before

Answer

Providing a list of approved providers to the borrower

Answer

Disclosing an affiliated business relationship

Question 3

When must an MLO provide the borrower with a copy of the appraisal report?

Accepted Answer

At least 3 business days before loan consummation

Answer

Only if the borrower requests it in writing

Answer

Within 3 calendar days after the appraisal is completed

Answer

Only at closing if the loan is approved

Question 4

A borrower's credit score is 580. The MLO tells the borrower they have a 680 score to help them get a better rate. This is an example of:

Accepted Answer

Misrepresentation

Answer

Steering

Answer

Loan flipping

Answer

Predatory lending

Question 5

Which document provides an itemized list of all settlement charges and must be provided to borrowers at or before closing?

Accepted Answer

Closing Disclosure

Answer

Loan Estimate

Answer

Good Faith Estimate

Answer

HUD-1 Settlement Statement for new loans

Question 6

An MLO discovers mid-process that a borrower's employment was terminated. What is the MLO's obligation?

Accepted Answer

Notify the lender immediately of the material change in circumstances

Answer

Proceed with the loan since underwriting already approved it

Answer

Ask the borrower to find new employment before disclosing

Answer

Advise the borrower to omit this fact from the loan file

Question 7

Under the S.A.F.E. Act, a state-licensed MLO who wants to temporarily conduct business in a new state while their new state license is pending may do so under which provision?

Accepted Answer

Temporary authority to operate

Answer

Reciprocity exemption

Answer

Interstate license portability rule

Answer

Federal preemption authority