Verification of cash used in a closing is documented by: CORRECT ANS-last 2-3 months
bank statements
The finance charge is the total cost of: CORRECT ANS-the loan in dollars, including points
and mortgage insurance
What IRS forms would you requrest from a borrower who is 40% shareholder in a C-
Corporation? CORRECT ANS-Form 1120
Impersonating someone else in an attempt to obtain their personal financial information is
called: CORRECT ANS-Pretexting
What type of funding occurs when a lender obtains funds from a line of credit at a
commercial bank? CORRECT ANS-Warehouse funding
, NMLS MLO Exam; Questions and Answers Rated A+
What must a borrower do to avoid having late payments reported to a credit bureau?
CORRECT ANS-Pay within 30 days of due date
Max penalty if a borrower is required to use a specific title company or settlement agent?
CORRECT ANS-3 times the fee
What should not be over-weighted in an analysis of borrower repayment capacity?
CORRECT ANS-Credit scores
Max prepayment penalty on residential mortgages in the first year of the loan CORRECT
ANS-3%
What must condominium associations do with respect to property insurance? CORRECT
ANS-Keep a "blanket" policy that protects the entire structure
If a lender is planning on referring a borrower to a title company that the lender has
ownership in, when must the AFBA must be provided to the borrower? CORRECT ANS-
Before the referral to the title company is made
, NMLS MLO Exam; Questions and Answers Rated A+
Website to obtain copy of your credit report that the credit bureaus are required to provide
once per year at no charge CORRECT ANS-annualcreditreport.com
2/3/6 caps CORRECT ANS-ARM initial adjustment max is 2%, subsequent adjustment
period max is 3%, and lifetime cap of 6%
What does FHLB stand for and what do they provide? CORRECT ANS-Federal Home Loan
Bank, and they provide advances to financial institutions for residential mortgage loans
According to the Dodd-Frank Act, how much risk must be retained by the securitizer for a loan
that does not meet QRM guidelines? CORRECT ANS-5%
On a purchase transaction, what document contains the purchase price for a property?
CORRECT ANS-Sales Contract
After a loan has been closed and funded, the creditor notices a tolerance violation with a fee
between the LE and CD. How long does the creditor have to reimburse the borrower for the
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