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Mortgage Loan Originator Practice Test (SAFE MLO Exam)

Federal mortgage laws, general mortgage knowledge, loan origination activities, ethics and uniform state content for the NMLS SAFE exam.

206 questions · 7 topics · free, no sign-up

Mixed practice test

10 questions, graded as you go, with the reason for every answer. No sign-up.

Timed mock exam

50 questions in 60 minutes, drawn from every topic. No answers shown until the end, then a score, your weakest topics and a review of what you missed.

Practise by topic

Sample questions

Under the TRID rule, a creditor has received an "application" once it has six pieces of information. Which item is NOT one of the six?

  1. The consumer's employment history
  2. The address of the property
  3. The loan amount being sought
  4. An estimate of the property's value
Show the answer

A. The consumer's employment history

The six items are the consumer's name, income, Social Security number, the property address, an estimate of the property value and the loan amount sought. Employment history is collected on the full loan application but is not needed to trigger the Loan Estimate.

Reference: Regulation Z (12 CFR Part 1026), 1026.2(a)(3)(ii)

A borrower overstates his income on the application so he can qualify to buy a house he intends to live in and pay for. How is this type of fraud classified?

  1. Fraud for profit
  2. Fraud for housing
  3. Equity skimming
  4. An air loan
Show the answer

B. Fraud for housing

Fraud for housing is committed by a borrower who wants the home and misstates facts to get the loan. Fraud for profit usually involves industry insiders taking cash out of transactions. Both are crimes; the label describes the motive.

Reference: Ethics: mortgage fraud categories

Which of the following is a prohibited basis for a credit decision under ECOA?

  1. The applicant receives public assistance income
  2. The applicant has a short credit history
  3. The applicant has changed jobs recently
  4. The applicant has a high level of debt
Show the answer

A. The applicant receives public assistance income

ECOA bars discrimination based on race, color, religion, national origin, sex, marital status, age, receipt of public assistance and the exercise of consumer credit rights. Credit history, job stability and debt load are legitimate underwriting factors.

Reference: Regulation B (12 CFR Part 1002), 1002.2(z) and 1002.4

A buyer contracts to purchase a home for $310,000. The appraisal comes in at $300,000 and the loan amount is $270,000. What is the loan-to-value ratio?

Answer in percent.

Show the answer

90 percent

Use the lesser of the price and the appraised value: $300,000. LTV = $270,000 / $300,000 = 0.90 = 90%.

Reference: LTV on a purchase = loan amount / lesser of price or appraised value

A lender pulls a tri-merge credit report showing scores of 688, 702 and 715 for a single borrower. Which score is normally used to qualify the borrower?

  1. 688
  2. 702
  3. 715
  4. The average of the three
Show the answer

B. 702

When three scores are available the middle one is used as the borrower's representative score. With only two scores, the lower one is used. Lenders do not average scores.

Reference: Fannie Mae Selling Guide, B3-5.1

Exams this helps with

ExamWho runs itWhere
Mortgage loan originator (SAFE MLO) readyNMLSUnited States

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