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SAFE MLO Exam Prep Questions with Complete Solution
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SAFE MLO Exam Prep Questions with Complete Solution
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SAFE MLO Exam Prep Questions withComplete Solution
After failing _____ times, you have to wait how long to retake? - ANSWER 3 times, 6 months
adopted brother, aunt grandfather, stepmother; which is NOT an immediate family member? -
ANSWER Aunt is not immediate family member
What may be true of registered LOs? - ANSWER Registered loan originators may be bank
employee
Independent contractor underwriter must be... - ANSWER a licensed LO
How often does a mortgage company needs to provide report of financial condition? - ANSWER
Annually
What types of liens are mortgages? - ANSWER Voluntary liens
Forbearance - ANSWER When a lender chooses to NOT take legal action upon a default
Escalation Clause - ANSWER allows lender to increase the interest rate
,Acceleration Clause - ANSWER gives "teeth;" Allows mortgagee to call the entire loan balance
if borrower is in default
Due-on-sale Clause aka Alienation Clause - ANSWER Mortgage may require loan balance be
paid off when property is sold or transferred; loan is NOT assumable
Defeasance Clauses - ANSWER prevents lender from foreclosing unless borrower is in
default; recordable SoM within 60 days
Opposite of Prepayment Penalty Clause? - ANSWER Prepayment Privilege Clause
Open-End Clause - ANSWER permits future additional advances from the same lender without
rewriting the mortgage (applies to HELOC)
Subordination Clause - ANSWER Allows subsequent mortgages on same property to have
more superior lien position
Blanket Mortgage - ANSWER loan to developers who purchase 1+ tracts of land
Partial Release Clause - ANSWER allows lien to be removed from each parcel as it is sold
4 Parts of a Contract - ANSWER 1) Competent Parties
2) Mutual Agreement
3) Legal Object
4) Consideration
Fee Simple (ownership) - ANSWER most desirable, absolute ownership
, Life Estate - ANSWER owned during lifetime, but title reverts back to grantor or
a predetermined party (aka remainderman) upon death of estate holder
Tenancy in Common - ANSWER - 2+ owners
- Can be equal or unequal
- Buy at same or different times
- Can will or sell shares to anyone
Joint Tenancy - ANSWER - 2+ owners
- Equal shares
- Buy at the same time
- Sell shares to anyone
- Shares cannot be willed
- Right of Survivorship - requires remaining owners to divide deceased's shares equally
Tenancy by Entirety - ANSWER Like Joint Tenancy with Right of Survivorship for married
couples; available in some states; couple owns in severalty aka one entity; each owns 100% of
property
Assumption - ANSWER When purchaser takes over mortgagor's monthly payments
with knowledge, but without qualification, of the lender
Assumption with Novation - ANSWER new note, mortgaged assumed where borrower is release
from all liability for the note (NOvation, NO liability)
Assumption Subject to the Mortgage - ANSWER OG buyer retains all liability
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