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MLO EXAM > PRACTICE EXAM 1 > Flashcards

PRACTICE EXAM 1 Flashcards

1
Q

A discount point is best described as charge a borrower pays to:

A

A lender to decrease the interest rate

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2
Q

A buyer has made an earnest money payment of $5,000. The buyer pays an additional $2,000 in option money to be credited at closing on a property with a sale price of $160,000. If the required down payment is 20%, how much additional money will the buyer need to provide toward the down payment at closing?

A

$25,000

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3
Q

If an applicant works 40 hours every week and is paid $13.52 per hour, what is the applicants monthly income?

A

$2,343.47

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4
Q

The requirement for private mortgage insurance is generally discontinued when the loan-to-value ratio falls below:

A

80%

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5
Q

Which document itemizes all settlement costs including lender charges?

A

HUD1/Closing disclosure

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6
Q

according to TILA, refinance means to:

A

satisfaction of existing obligation and its replacement by new obligation

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7
Q

what does an MLO use to determine the estimated value of a property based in an analytical comparison of similar property sales?

A

an appraisal

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8
Q

which method of disclosure does NOT meet ECOA requirements

A

telephone

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9
Q

According to TILA, Which fee is excluded from the calculation of the APR?

A

hazard insurance

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10
Q

A funding fee is required for a

A

VA loan

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11
Q

MIP is required on

A

FHA loan

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12
Q

The borrower does NOT sign the

A

deed

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13
Q

What is usually NOT recorded

A

a note

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14
Q

a mortgagee title insurance policy is NOT

A

optional

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15
Q

which parties sign the deed?

A

the grantor and two witnesses

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16
Q

when a mortgager and mortgagee title insurance policies are issued at the same time, this is known as

A

simultaneous issue

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17
Q

a shrubbery hedge is one example of an

A

acceptable title impediment

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18
Q

The GFE/loan estimate must be mailed or given to the borrower within how many days after receiving the signed application

A

3 business days

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18
Q

what minimum percentage of ownership in a related service requires a conflict of interest disclosure ?

A

10%

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19
Q

a salary employee may have to produce which document to obtain a loan?

A

2 years W2s

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20
Q

which law defines right to rescission?

A

TILA

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21
Q

How long after the application must social security payments be received to be counted as income?

A

3 years

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22
Q

what clause in a mortgage prevents the lender from foreclosing unless the borrower is in default ?

A

defeasance

23
Q

what increases cap rate?

A

lower purchase price

24
Q

who is responsible for maintaining national flood maps?

A

FEMA

25
Q

PMI is automatically cancelled when LTV reaches

A

78%

26
Q

what loan is meant for rural areas?

A

USDA

27
Q

The purchase price of a home is $200,000 and the loan amount is $180,000. The borrower pays 6% interest with 1 discount point and 1 origination point. What is the cost of the points?

A

$3,600

28
Q

If the gross rent multiplier decreases, the property value

A

decreases

29
Q

when a property increases in value, this is known as

A

appreciation

30
Q

which appraisal approach is best for an office building?

A

income capitalization approach

31
Q

what is not a fully amortized loan?

A

a term mortgage

32
Q

Fannie Mae does NOT require

A

6 months of bank statements

33
Q

what is the FHA minimum down payment?

A

3.5%

34
Q

what is the minimum down payment for a USDA loan?

A

0%

35
Q

who completes the HUD1-/Loan disclosure?

A

closing agent

36
Q

a mortgagers title insurance policy is based on

A

purchase price

37
Q

the assignee (new lender) of a mortgage and note is participating in

A

the secondary mortgage market

38
Q

VA loans are

A

partially guaranteed

39
Q

what clause prevents lender from recovering additional assets from the mortgager if there is a shortfall in the foreclosure process?

A

exculpatory

40
Q

what describes the intentional delay of action on the part of a lender regarding borrowers default ?

A

forbearance

41
Q

Fannie Mae allows what amount of fees to be charged to a credit card?

A

1% of the loan amount plus $500 for the appraisal and credit report

41
Q

Freddie Mac was originally known as

A

federal home loan mortgage corporation

42
Q

Loan prospector can’t be used for what type of loan?

A

commercial loan

43
Q

a five bedroom, one bathroom house is an example

A

functional obsolescence

44
Q

what is NOT a benefit from FHA loans?

A

No monthly mortgage insurance

45
Q

the most comprehensive form of ownership is

A

fee simple absolute

46
Q

what is the maximum term for an FHA loan?

A

30 years

47
Q

what is NOT a component of a valid contract

A

two witnesses

48
Q

what co-ownership permits property to pass to an heir?

A

tenants in common

49
Q

the economic concept that a knowledgable buyer will pay no more for one property than they would pay for an equally desirable comparable property is

A

principle of substitution

50
Q

what law requires the interviewer to complete the government monitoring section on the 1003 ?

A

ECOA

51
Q

what law allows applicant a copy of property appraisal report

A

ECOA

52
Q

who enforces respa violations?

A

CFPB

53
Q

what law requires special information booklet be given to borrowers?

A

RESPA

54
Q

what is the Fine for violating federal do not call rules?

A

$43,792

MLO EXAM (13 decks)

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