SAFE Mortgage Loan Originator Test (National Test with Uniform State Content)
Mortgage loan origination activities: practice questions
Our SAFE MLO Test (NMLS) bank has 75 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.
Question 1
Which charges fall in the 10% cumulative tolerance category?
- Lender origination fees
- Transfer taxes
- Recording fees and unaffiliated providers chosen from the lender's list
- Daily prepaid interest
Show the answer
C. Recording fees and unaffiliated providers chosen from the lender's list — Section 1026.19(e)(3)(ii) groups recording fees and unaffiliated third-party services selected from the creditor's list; the sum may not rise more than 10%.
Question 2
If the borrower's credit report omits a debt that the borrower lists on the application, the creditor relying on the credit report:
- Must deny the loan
- Must ignore the debt
- Must order a new appraisal and a second credit report
- Need not independently verify that debt
Show the answer
D. Need not independently verify that debt — Section 1026.43(c)(3)(iii) says a creditor need not verify a debt stated on the application but missing from the credit report.
Question 3
Which factor is NOT among the eight ability-to-repay underwriting factors?
- The borrower's age
- Monthly payments on simultaneous loans
- Current employment status
- Credit history
Show the answer
A. The borrower's age — Section 1026.43(c)(2) lists income/assets, employment, the loan's payment, simultaneous loans, mortgage-related obligations, other debts, DTI or residual income, and credit history.
Question 4
Under Regulation B, if an application is incomplete, the creditor may:
- Ignore the application forever
- Charge an incompleteness fee
- Deny it without any notice
- Send a notice of incompleteness
Show the answer
D. Send a notice of incompleteness — Section 1002.9(c) allows a written notice of incompleteness specifying the information needed and a reasonable period to provide it.
Question 5
A borrower asks for a larger loan amount after receiving the Loan Estimate. This is:
- A valid reason to revise the Loan Estimate
- Not a valid reason for any revision
- A tolerance violation that must be refunded at closing
- Grounds for rescission
Show the answer
A. A valid reason to revise the Loan Estimate — Section 1026.19(e)(3)(iv)(C) allows revised estimates when the consumer requests revisions to credit terms or settlement that increase charges.