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NMLS MLO Exam Questions
Mortgage Loan Origination (Page 4 )

Updated On: 16-Feb-2026
Page 4 of 25
PDF with 120 Questions

The Red Flags Rule under the Fair and Accurate Credit Transactions Act (FACTA) require lenders to:

  1. adopt best practices for property evaluations as stipulated in the Home Valuation Code of Conduct.
  2. adopt a credit score evaluation method utilizing the middle of three repository scores and the lowest of all borrowers' scores.
  3. implement a written program to detect warning signs of identity theft.
  4. implement an internal watch system to prevent the misrepresentation of occupancy status.

Answer(s): C


Reference:

https://www.ftc.gov/business-guidance/privacy-security/red-flags-rule



Which of the following loans is subject to the Real Estate Settlement Procedures Act (RESPA)?

  1. Federally related mortgage loan
  2. Standard county related mortgage loan
  3. State registration related mortgage loan
  4. Unified commerce related mortgage loan

Answer(s): A


Reference:

https://www.quickenloans.com/learn/respa



When preparing a corrected Closing Disclosure, under which of the following conditions is a three-day waiting period required before a loan consummation?

  1. The addition of an escrow account
  2. The addition of a prepayment penalty
  3. If the APR changes within the acceptable tolerance
  4. If a revision is needed to the consumer's contact Information

Answer(s): B



A creditor receives an application with all the required pieces of information but wants to have additional information to determine a borrower's qualifications for a loan. Which of the following actions is most compliant with industry regulations?

  1. Consider the application incomplete and put initial processing on hold until the additional information is received
  2. Carefully document attempts to obtain the necessary additional information from the consumer to show why the decision to hold further processing was made
  3. Provide timely initial disclosures to the consumer even though the requested information when received may reflect that the initially disclosed figures are outdated
  4. Provide a fees worksheet, a Falr Lending Disclosure and an Equal Credit Opportunity Act (ECOA) form to the consumer, waiting until the additional necessary information is obtained to Issue the balance of required disclosures

Answer(s): C


Reference:

https://www.consumercomplianceoutlook.org/2021/fourth-issue/advanced-topics-in-adverse-action-notices-under-the-equal-credit-opportunity-act/



A woman and her son meet with a mortgage loan originator (MLO) about refinancing the mother's home. During the meeting, the MLO senses that the mother is against the transaction and may be being unfairly coerced into the procedure. In which of the following ways should the MLO proceed?

  1. Ask to speak to the mother privately to inquire whether she Is a willing participant in the transaction
  2. Consider the issue to be a private family matter and proceed with the next steps in the application process
  3. Suggest that the son be listed as a co-borrower on the mortgage to ensure he assumes part of the risk of the loan
  4. Tell the mother that she needs to sign a power of attorney so that her son may complete the transaction on her behalf

Answer(s): A


Reference:

https://mlotrainingacademy.com/what-is-a-mortgage-loan-originator/






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