[Q87-Q110] Use the best ways of preparing for MLO Exam Dumps with 2Pass4sure NMLS MLO PDF Dumps [2025]

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[Q87-Q110] Use the best ways of preparing for MLO Exam Dumps with 2Pass4sure NMLS MLO PDF Dumps [2025]

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Use the best ways of preparing for MLO Exam Dumps with 2Pass4sure NMLS MLO dump PDF [2025]

NMLS MLO exam candidates will surely pass the Exam if they consider the MLO dumps learning material presented by 2Pass4sure.

NEW QUESTION 87
How many days must a borrower’s mortgage loan be delinquent before the mortgage company is permitted to submit the first notice filing in the foreclosure process?

30 days

90 days

120 days

60 days

NEW QUESTION 88
What is the maximum civil penalty that is permitted to be imposed for each violation or failure to comply with the SAFE Act?

$2,500 for each act or omission

000 for each act or omission

$2,500 for each act or omission; $25,000 maximum

$25, 000 for each act or omission: $250,000 maximum

Under the SAFE Act (Secure and Fair Enforcement for Mortgage Licensing Act), the maximum civil penalty for each violation or failure to comply is $25,000 per act or omission. This applies to mortgage loan originators (MLOs) and others who violate licensing or regulatory requirements under the SAFE Act.
Violations can include actions such as failing to obtain proper licensure or engaging in fraudulent lending practices.
References:
* SAFE Act, 12 USC §5107
* NMLS Enforcement Guidelines

NEW QUESTION 89
A mortgage loan originator (MLO) is in the process of taking an application for a 30-year mortgage, and the borrowers are over 72 years old. Which of the following actions must the MLO take?

The MLO must present them with a reverse mortqaqe.

The MLO must present them with a home equity line of credit (HELOC).

The MLO must complete the application and proceed as normal.

The MLO must inquire about the ability to repay in the event of a borrower’s death.

Under the Equal Credit Opportunity Act (ECOA), age cannot be a basis for discrimination in the loan application process. If borrowers are over 72 years old, the MLO must complete the application and proceed as normal, treating them the same as any other applicant. The MLO should not make assumptions about the borrowers’ needs, such as automatically suggesting a reverse mortgage (A) or a home equity line of credit (B).
Similarly, there is no obligation for the MLO to inquire specifically about the borrower’s ability to repay in the event of death (D), as this would be age discrimination.
References:
Equal Credit Opportunity Act (ECOA), 15 U.S.C. §1691
CFPB Guidelines on age and lending practices

NEW QUESTION 90
Which of the following must be included on all residential mortgage loan application forms?

A mortgage loan originator’s unique identifier

A borrower’s driver’s license number

The maiden name of the borrower’s mother

The borrower’s previous five year employment history

Regulation Z (TILA) and the SAFE Act require that all mortgage loan applications include the MLO’s unique identifier, which allows regulators and consumers to identify the MLO involved in the transaction.
“Each loan application must include the mortgage loan originator’s name and unique identifier.”
– 12 CFR § 1026.36(g); SAFE Act
Other listed information is not federally required on every mortgage application.
References:
CFPB, Loan Originator Identifier Requirements
SAFE MLO National Test Study Guide

NEW QUESTION 91
A mortgage loan in which a large portion of the borrowed principal is repaid at the end of the loan period is known as a:

FHA mortgage.

balloon mortgage.

qualified mortgage.

deferred-payment mortgage.

A balloon mortgage is a type of loan where a large portion of the principal is repaid in a lump sum at the end of the loan term. This structure often features smaller, periodic payments during the life of the loan, with the remaining balance (the balloon payment) due at the end of the loan period. Balloon mortgages are typically shorter-term loans, such as 5 or 7 years.
* This differs from other loan types:
* FHA mortgages (A) are fully amortized loans backed by the government.
* Qualified mortgages (C) meet specific ability-to-repay standards and are fully amortized.
* Deferred-payment mortgages (D) often refer to reverse mortgages or loans with delayed payment schedules, which are not the same as balloon loans.
References:
* Fannie Mae and Freddie Mac Mortgage Guidelines on balloon loans
* Truth in Lending Act (TILA) definitions of mortgage types

NEW QUESTION 92
Which of the following is an acceptable reason for denying a forward mortgage under the Equal Credit Opportunity Act (ECOA)?

Receipt of child support

Immigration status

Marital status

Retirement age

The Equal Credit Opportunity Act (ECOA) prohibits discrimination based on receipt of child support, marital status, and age (provided the applicant is legally able to contract). However, it permits denial based on immigration status if it affects the creditor’s ability to enforce legal rights in case of default.
“A creditor may inquire about an applicant’s immigration status and may deny credit if the applicant is not a permanent resident or otherwise not legally in the U.S. and able to contract.”
– 12 CFR § 1002.5(e), Regulation B (ECOA)
References:
CFPB, Regulation B: Permissible Inquiries
SAFE MLO National Test Study Guide

NEW QUESTION 93
No more than how many days before calling any consumer should a company access the National Do Not Call Registry and maintain records documenting this process?

14 days

31 days

45 days

60 days

Under the Telemarketing Sales Rule, companies are required to access the National Do Not Call Registry at least once every 31 days and must maintain records documenting this process. Solicitors may not call any number on the registry that has been there for 31 days or more.
“You must update your call list every 31 days by accessing the National Do Not Call Registry.”
– FTC, National Do Not Call Registry FAQs
References:
FTC, Do Not Call: FAQs

NEW QUESTION 94
Which of the following scenarios describes a form of steering?

A loan officer presents a consumer a loan with the terms a consumer requested that has higher fees than a product the loan officer is able to offer.

A loan officer presents a consumer with a loan that has the lowest total amount of fees.

A loan officer presents a consumer loan options from a particular lender for a higher level of compensation.

A loan officer presents a consumer with loan options from multiple creditors with various fees.

Steering occurs when a loan officer influences or directs a borrower towards a specific loan product or lender based on the compensation the loan officer will receive, rather than the borrower’s best interests. In Option C, the loan officer is steering the borrower to a loan from a particular lender to earn higher compensation, which is prohibited under the Dodd-Frank Act and TILA’s Loan Originator Compensation Rule.
Other options:
* Option A describes offering a loan with higher fees, but it does not indicate that compensation is the motive, so it is not a clear example of steering.
* Option B and Option D describe fair loan presentation practices.
References:
Dodd-Frank Act, Loan Originator Compensation Rule
Truth in Lending Act (TILA), 12 CFR Part 1026

NEW QUESTION 95
Which of the following advertising statements is permissible?

“5% 30-year fixed with no closing costs”

“5% for 10 years, then one balloon payment”

“30-year variable rate mortgages starting at ____”

“30-year fixed mortgage for a 5% APR with approved credit”

The Truth in Lending Act (TILA) Regulation Z requires that advertisements for mortgage credit products that state a rate or terms must be clear and not misleading. Phrases like “with approved credit” are permissible when a specific APR is disclosed and required terms are provided. However, “no closing costs” or “variable rate starting at ___” are considered potentially misleading if not all relevant terms are disclosed.
“If an advertisement states a rate of finance charge, it must state the rate as an annual percentage rate (APR)…
Disclosures must not be misleading. Stating ‘with approved credit’ in connection with an APR is permissible.”
– 12 CFR § 1026.24, Regulation Z
References:
CFPB, Advertising Requirements
SAFE MLO National Test Study Guide

NEW QUESTION 96
Which of the following activities is a function of the Consumer Financial Protection Bureau (CFPB)?

Regulating the federal funds rate at which money is lent to banks

Regulating the number of mortgage loan originators in the mortgage industry

Regulating mortgage lenders on their mortgage origination practices and procedures

Deciding what quantity of mortgage-backed securities are purchased by the government

The Consumer Financial Protection Bureau (CFPB) is responsible for regulating mortgage lenders and overseeing their origination practices and procedures. The CFPB was created under the Dodd-Frank Act to protect consumers from unfair, deceptive, or abusive practices in financial services, including mortgages. Its functions include:
* Enforcing rules related to mortgage origination, such as TILA, RESPA, and ECOA.
* Ensuring that lenders provide clear disclosures and follow fair lending practices.
Other functions:
* Regulating the federal funds rate (A) is the role of the Federal Reserve.
* Deciding the quantity of mortgage-backed securities purchased by the government (D) is related to Federal Reserve monetary policy, not the CFPB.
References:
Dodd-Frank Wall Street Reform and Consumer Protection Act
CFPB’s Role in Mortgage Origination

NEW QUESTION 97
Which of the following actions by a mortgage loan originator is prohibited regarding credit secured by a dwelling?

Receiving compensation from both the borrower and the lender

Presenting program options that best qualify and satisfy the consumer

Providing disclosures within three days of an application

Providing a copy of the credit application to the primary borrower

Mortgage loan originators (MLOs) are subject to strict rules regarding compensation to prevent conflicts of interest and protect consumers. According to the Truth in Lending Act (TILA) Regulation Z, Loan Originator Compensation Rule (12 CFR § 1026.36(d)), an MLO may not receive compensation from both the borrower and any other person (such as a creditor or lender) in a single transaction. This is often referred to as the “anti- dual compensation rule” and is designed to prevent situations where an MLO could be incentivized to steer consumers into less favorable loans for higher pay.
“A loan originator may not receive compensation directly or indirectly from both the consumer and another person in connection with the same transaction.”
– 12 CFR § 1026.36(d)(2), Regulation Z, Truth in Lending Act
Other options are not prohibited and are actually required or encouraged by law:
B: Presenting best program options is part of an MLO’s fiduciary and ethical duties.
C: Providing required disclosures (e.g., Loan Estimate) within three business days of application is required under TILA/RESPA Integrated Disclosure (TRID) rules.
D: Providing a copy of the credit application is permissible and often requested.
References:
CFPB, “Loan Originator Compensation Requirements under the Truth in Lending Act (Regulation Z)” SAFE MLO National Test Study Guide
12 CFR § 1026.36(d) Regulation Z

NEW QUESTION 98
Which of the following loans is subject to right of rescission?

A purchase loan secured by a rental home

A refinance loan secured by a vacation home

A cash-out refinance loan on a primary residence

A rate and term refinance loan through the same creditor

The right of rescission is a provision under TILA (Truth in Lending Act) that gives borrowers the right to cancel certain types of loans within three business days after closing. This right applies specifically to refinance transactions on a borrower’s primary residence, where they are taking cash out or refinancing their mortgage.
* Cash-out refinances on a primary residence (C) are subject to the right of rescission because they involve the homeowner’s primary residence.
* Purchase loans (A) and loans secured by vacation homes (B) or other investment properties are not subject to this rule.
* Even if the same creditor is refinancing the loan (Option D), the right of rescission still applies if it’s a refinance of the primary residence.
References:
* Truth in Lending Act (TILA) Section 125
* Regulation Z, 12 CFR §1026.23 on the right of rescission

NEW QUESTION 99
During the loan application process, which of the following documents specifies the time period that a mortgage lender agrees to hold the mortgage interest rate at a certain percentage?

Loan application

Preapproval letter

Closing Disclosure

Rate lock agreement

A rate lock agreement is the document that specifies the time period during which a mortgage lender agrees to hold the interest rate at a certain percentage for the borrower. It guarantees that the rate will not change, even if market interest rates fluctuate, as long as the loan closes within the agreed-upon timeframe.
* The loan application (A) initiates the mortgage process, but it does not secure the interest rate.
* A preapproval letter (B) gives a preliminary loan approval but does not lock the rate.
* The Closing Disclosure (C) provides final loan terms but does not set the rate lock.
References:
* Fannie Mae and Freddie Mac rate lock policies
* CFPB Guidelines on rate lock agreements

NEW QUESTION 100
An individual who is a loan processor or underwriter must maintain a state originator license if they:

perform clerical duties for a mortgage lender as a supervised employee

are not in communication with the consumer to obtain mortgage loan information.

are an independent contractor and collect, receive or distribute information in connection with making a credit decision.

are an employee of a loan processing or underwriting company that supports a mortgage broker/lender and only perform supervised clerical duties.

An individual who is an independent contractor and performs loan processing or underwriting activities must maintain a state originator license if they collect, receive, or distribute information in connection with making a credit decision. This is because independent contractors are not considered supervised employees, and their work directly impacts the loan approval process.
* In contrast, employees of a mortgage lender who perform clerical duties (A) under supervision do not need a state license, nor do those who do not interact with consumers (B).
References:
* SAFE Act, 12 USC §5101
* NMLS Licensing Guidelines for loan processors and underwriters

NEW QUESTION 101
How many days after loan consummation does a lender have to refund an excess charge subject to the 10% aggregate tolerance?

45 days

50 days

60 days

90 days

Under TILA-RESPA Integrated Disclosure (TRID) rules, if a lender overcharges the borrower by more than the allowable 10% aggregate tolerance on certain closing costs, the lender must refund the excess amount to the borrower within 60 days of loan consummation. The 10% tolerance applies to certain fees like title insurance and government recording fees, ensuring that the lender provides accurate estimates on the Loan Estimate (LE) and does not exceed allowable variances at closing.
References:
* TILA-RESPA Integrated Disclosure Rule (TRID), 12 CFR §1026.19(f)
* CFPB Guidelines on refund timelines

NEW QUESTION 102
The Truth in Lending Act (TILA) covers which of the following loans?

Agricultural credit

Home equity loans

Business or commercial credit

An extension of credit to other than a natural person

The Truth in Lending Act (TILA, Regulation Z) applies to consumer credit transactions, which include home equity loans and other loans extended primarily for personal, family, or household purposes. TILA does not cover credit extended for business, commercial, agricultural purposes, or loans to entities rather than natural persons.
“Regulation Z applies to each individual or business that offers or extends credit when four conditions are met:
(1) the credit is offered or extended to consumers,
(2) the offering or extension of credit is done regularly,
(3) the credit is subject to a finance charge or payable by a written agreement in more than four installments, and (4) the credit is primarily for personal, family, or household purposes.”
– 12 CFR § 1026.1(c); Regulation Z, TILA
Home equity loans are covered; agricultural, business, or commercial credit and credit to entities (not individuals) are excluded.
References:
CFPB, TILA/Regulation Z Coverage
SAFE MLO National Test Study Guide

NEW QUESTION 103
A lender will require private mortgage insurance for first lien loans with loan-to-value over what percentage?

70%

75%

78%

80%

Private mortgage insurance (PMI) is typically required for conventional first-lien loans when the loan-to- value (LTV) ratio exceeds 80%. That is, when the borrower puts down less than 20% as a down payment.
“PMI is required by lenders on conventional loans with a loan-to-value ratio greater than 80 percent.”
– Homeowners Protection Act of 1998; CFPB PMI Guidance
References:
CFPB, When can I remove PMI?

NEW QUESTION 104
Which of the following activities is considered a settlement service as defined by the Real Estate Settlement Procedures Act (RESPA)?

Origination of a timeshare loan

Origination of a chattel-secured loan

Origination of an interim unsecured loan

Origination of a federally related mortgage loan

Under RESPA, a settlement service includes any service provided in connection with a real estate settlement, including the origination, processing, or funding of a federally related mortgage loan. A federally related mortgage loan is defined as any loan (other than temporary financing) secured by a first or subordinate lien on residential real property.
“Settlement service means any service provided in connection with a real estate settlement including but not limited to… the origination of a federally related mortgage loan.”
– 12 CFR § 1024.2, Regulation X
Timeshare, chattel, and unsecured loans are not considered federally related mortgage loans under RESPA.
References:
CFPB, RESPA – Regulation X
SAFE MLO National Test Study Guide

NEW QUESTION 105
In which of the following scenarios is a mortgage loan originator (MLO) violating the consumer privacy provisions within the Gramm-Leach-Bliley Act?

The MLO provides a consumer’s application to a third-party processor in order to continue the loan process.

The MLO receives two copies of a consumer’s pay stub via fax, and the MLO destroys one of the copies in a paper shredder.

The MLO stores electronic information regarding the consumer on an encrypted laptop which is occasionally removed from the office.

The MLO discusses a consumer’s credit history with a co-worker at a local cafe.

The Gramm-Leach-Bliley Act (GLBA) prohibits the disclosure of nonpublic personal information about consumers to third parties, except as permitted by law (e.g., for processing the loan). Discussing a consumer’s credit history in a public place where privacy cannot be ensured is a violation of GLBA privacy rules.
“Financial institutions must protect the confidentiality of consumer records and information. Discussing customer information in public or unsecured locations can violate privacy regulations.”
– GLBA Privacy Rule; FTC Compliance Guidelines
Other choices reflect permissible or prudent actions, such as sharing information with authorized third parties or using secure data storage.
References:
FTC, Gramm-Leach-Bliley Act Privacy Rule
SAFE MLO National Test Study Guide

NEW QUESTION 106
Under which of the following programs is a creditor required to provide disclosures to the consumer that fully describe each of the creditor’s variable-rate loan programs in which the consumer expresses an interest?

ARM

FHA

Fixed

Construction

Under Regulation Z, which implements the Truth in Lending Act (TILA), creditors offering Adjustable- Rate Mortgages (ARM) are required to provide disclosures that fully describe each variable-rate loan program in which the consumer expresses interest. These disclosures must explain:
* How the interest rate and payment could change over time
* The frequency of rate changes
* The index used to determine the rate
* Potential caps and limits on rate increases
These disclosures ensure transparency and protect consumers from unexpected payment shocks.
Other loan types:
* FHA loans (B) follow fixed or ARM terms, but the requirement for variable-rate disclosure is specific to ARMs.
* Fixed-rate loans (C) don’t have variable rates, so they don’t require such detailed disclosures.
* Construction loans (D) may involve different terms but aren’t subject to this particular requirement.
References:
* Truth in Lending Act (TILA), specifically for Adjustable-Rate Mortgages
* 12 CFR Part 1026, Regulation Z

NEW QUESTION 107
Which of the following does a higher-priced mortgage require if the seller acquired the home 90 days or fewer prior to the date of the purchase contract and the sales price exceeds the seller’s acquisition price by more than
10%?

One written appraisal and one broker price opinion

One written appraisal only and one automated valuation model

Two written appraisals only

Two written appraisals and one automated valuation model

Under Regulation Z, Section 1026.35(c), for higher-priced mortgage loans (HPMLs), if the seller acquired the property 90 days or less before the date of the borrower’s purchase agreement and the resale price exceeds the seller’s acquisition price by more than 10%, the lender must obtain two written appraisals from different certified or licensed appraisers.
“A creditor must obtain two written appraisals if the seller acquired the property 90 days or fewer prior to the date of the consumer’s agreement to acquire the property and the price exceeds the seller’s acquisition price by more than 10 percent.”
– 12 CFR § 1026.35(c)(4)(i)
References:
CFPB, Higher-Priced Mortgage Loans Appraisal Rule
SAFE MLO National Test Study Guide

NEW QUESTION 108
Which of the following is an origination fee?

Appraisal fee

Underwriting fee

Title insurance fee

Prepaid interest fee

An origination fee is a charge by the lender for processing a new loan application, which typically includes the costs of underwriting and originating the loan. The underwriting fee is a common component of the lender’s origination charges. Appraisal, title insurance, and prepaid interest are separate, non-origination costs.
“Origination charges include fees for underwriting, processing, and originating the loan.”
– CFPB, Loan Estimate Explainer; TRID Rule Guide
References:
CFPB, What is a loan origination fee?
SAFE MLO National Test Study Guide

NEW QUESTION 109
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?

His compensation is permitted as compensation only includes salary and his salary is not based on loan terms.

His compensation is permitted as compensation only includes salary and bonuses and his salary and bonus is not based on loan terms.

His compensation is not permitted as compensation only includes salary and his salary is based on loan terms.

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.

Under Dodd-Frank Act regulations and Regulation Z (TILA), mortgage loan originators (MLOs) cannot be compensated based on the terms of the loan, such as interest rates, loan amount, or product type. This includes any financial incentives, like bonuses or rewards, tied to loan terms. In this case:
* The trip to Hawaii was awarded based on closing loans with an interest rate of 5% or higher, which directly ties the MLO’s compensation to a specific loan term (the interest rate).
* This violates the Loan Originator Compensation Rule, which prohibits compensating MLOs based on the terms or conditions of a loan, in order to protect borrowers from steering into unfavorable loan products.
Therefore, all forms of compensation-including bonuses, trips, or other rewards-are scrutinized if they are tied to loan terms, making the MLO’s trip to Hawaii an illegal incentive under current law.
References:
* Dodd-Frank Act – Loan Originator Compensation Rules
* TILA/Regulation Z – Anti-Steering and Loan Terms Compensation Rules

NEW QUESTION 110
Which of the following situations requires further documentation when reviewing bank statements for documentation of assets for down payment and closing costs?

When the bank statement shows very little activity on the account

When the bank statement comes from an institution that does not have a local presence

When there is a large deposit that is not a payroll deposit

When there are two borrowers on a loan and only one of the borrowers’ names is shown on a bank statement

When underwriting a loan, large or unusual deposits that are not readily identifiable (such as payroll deposits) must be sourced and documented. This is to ensure the funds are not borrowed or from an unacceptable source.
“If a bank statement reveals a large deposit that is not payroll-related, the lender must document the source of funds.”
– Fannie Mae Selling Guide, B3-4.2-02: Depository Accounts
References:
Fannie Mae, Verifying Assets
SAFE MLO National Test Study Guide

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