MLO

MLO practice questions, page 4 of 5, with answer review and explanations.

Question 16

A mortgage loan originator (MLO) received a salary of 1% per loan plus a bonus of $5,000 for closing the most loans in the office last year. In addition, he received a trip to Hawaii based on closing 100 or more transactions with an interest rate of 5% or higher. Is the MLO's compensation prohibited?

  1. His compensation is permitted as compensation only includes salary and his salary is not based on loan terms.
  2. His compensation is permitted as compensation only includes salary and bonuses and his salary and bonus is not based on loan terms.
  3. His compensation is not permitted as compensation only includes salary and his salary is based on loan terms.
  4. His compensation is not permitted as compensation includes all financial incentives and his trip was awarded based on closing the most loans with certain loan terms.

Question 17

Which of the following statements is permissible in an advertisement?

  1. "Current interest rates as low as 3.50% with an APR of 3.99%. Contact us today!"
  2. "Looking for a VA loan? We are endorsed by and affiliated with the VA administration."
  3. "Take out a reverse mortgage loan with us, and you can stay in your home as long as you want and never make a payment."
  4. "Close a mortgage loan with us within the next 60 days and when interest rates drop, we will refinance your loan at a lower rate guaranteed."

Question 18

A borrower has told the mortgage loan originator that they had recently paid off an account that was listed on their credit report. Which of the following information will they need to provide the lender to prove the account has been paid off?

  1. Oral confirmation from the borrower
  2. An updated statement showing a zero balance
  3. A letter from the borrower explaining that they paid it off
  4. No additional information required

Question 19

Which of the following federal laws requires mortgage lenders to adopt and follow anti-money laundering (AML) rules and regulations?

  1. The National Bank Act
  2. The National Currency Act
  3. The Bank Secrecy Act (BSA)
  4. The Real Estate Settlement Procedures Act (RESPA)

Question 20

Prepaid charges include which of the following items?

  1. Origination fee
  2. Credit report fee
  3. Conveyance tax
  4. Per diem interest