Uniform State Content (USC)

Question 1

To hold an active license, an MLO must:

Answer 1

Must be sponsored by a licensed entity who supervises them

-An entity refers to a person or organization possessing separate legal rights

Question 2

When was the Housing and Economic Recovery Act signed into law?

Answer 2

2008

Question 3

In order to renew your license, you must annually complete which of the minimum requirements pertaining to Continuing Education:

Answer 3

3 hrs of federal, 2 hrs of ethics, 2 hrs of non traditional, and 1 hr of elective content

-The SAFE Act requires a minimum of 8 hours of continuing education yearly, these 8 hours must include 3 hours of federal law, 2 hours of ethics, 2 hours of non-traditional and 1 hour of elective content. States can add to this requirement as they see fit.

Question 4

All the following would be considered to be performing clerical or support duties EXCEPT:

Answer 4

An MLO

-Loan processors, underwriters and appraisers are not required to be licensed as MLOs as long as they only complete clerical or support duties. Appraisers do have to be licensed in their state to be an appraiser.

Question 5

The penalties issued by the State Regulatory Authority are levy ____ penalties on mortgage loan originators.

Answer 5

Civil

-State regulatory authorities can levy civil penalties. They can also refer an individual or licensee to the Attorney General in their state for criminal prosecution, but they themselves do not levy criminal penalties.

Question 6

An individual is looking to obtain a mortgage loan originator license, should be aware that they cannot obtain a licensee if which of the following appears on their credit report:

Answer 6

Open tax lien

-An applicant is required to show financial responsibility. Things that can call into question an applicant’s financial responsibility include current outstanding judgments (except medical ones), current outstanding tax liens, foreclosures within the past 3 years, and a pattern of seriously delinquent accounts in the past 3 years.

-A open tax lien is when the IRS assesses a tax against you and sends you a bill that you neglect or refuse to pay it.

Question 7

The State Regulatory Authority may impose penalties for each violation up to, and not exceeding:

Answer 7

$25,000

-The maximum penalty under the SAFE Act is $25,000.

Question 8

All of the following are grounds for the Regulatory Authority to revoke a license except:

Answer 8

Not completing continuing education before Dec 31st

-If a licensee fails to complete their CE before expiration, they do not meet the requirements for renewal and their license will expire

Question 9

How long must an applicant wait to receive a new license if they have previously had their license revoked?

Answer 9

Once revoked, that person is never eligible for a future license

-It is prohibited under the SAFE Act for anyone who has had a license revoked under any government jurisdiction to obtain an MLO license again.

Question 10

The State Regulatory Authority shall renew a mortgage loan originator’s (MLO) license if all of the following are done EXCEPT:

Answer 10

MLO retests

-An MLO only has to take and pass the test once unless they become unlicensed for 5 or more years. MLOs do have to take yearly continuing education, pay yearly renewal fees and maintain the same level of qualifications at renewal as they did at initial licensure.

Question 11

All of the following are required to be licensed except:

Answer 11

An individual negotiating a residential mortgage loan with or on behalf of an immediate family member

-Under the SAFE Act, individuals negotiating loans on behalf of their immediate family members are exempt from licensure as an MLO

Question 12

Which of the following is not considered a Federal Banking Agency?

Answer 12

The consumer financial protection bureau (CFPB)

-The CFPB is a federal regulatory authority not a federal banking agency

Question 13

After failing three (3) exams, an applicant must wait how long before taking the exam again?

Answer 13

6 months

Question 14

The minimum passing score of the National Test with UST is:

Answer 14

75%

Question 15

A loan originator is:

Answer 15

Someone who takes residential mortgage loan applications and offers/negotiates terms of a residential loan for compensation or gain

-A mortgage loan originator or MLO is an individual who for compensation or gain or in the expectation of compensation or gain; takes a residential mortgage loan application; or offers or negotiates terms of a residential mortgage loan.

Question 16

A loan originator who applies to be licensed again must:

Answer 16

Complete the CE requirements for the last year in which the license was held

-It is required under the SAFE Act if a licensee becomes unlicensed, they must prove they completed their continuing education requirements for the last year in which they did hold a valid license before applying for a new or renewed license

Question 17

The SAFE Act outlines all of the following EXCEPT:

Answer 17

Loan originator compensation requirements

-Loan Originator Compensation is a rule under Regulation Z.

-Regulation Z prohibits certain practices relating to payments made to compensate mortgage brokers and other loan originators. The goal of the amendments is to protect consumers in the mortgage market from unfair practices involving compensation paid to loan originators

Question 18

The Nationwide Multistate Licensing System and Registry is developed and maintained by which of the following:

Answer 18

The Conference of State Bank supervisors & The American Association of Residential Mortgage Regulators

-Both the CSBS and AARMR were responsible for the creation of the NMLS.

Question 19

A Mortgage Lender shall maintain capital of not less than $______ per licensed location:

Answer 19

An amount determined by the state regulatory authority

-Surety Bond and Net Worth requirements are outlined by the state regulatory authority at their discretion. The SAFE Act does not outline a minimum requirement.

Question 20

The NMLS is responsible for all the following EXCEPT:

Answer 20

Approving or denying license applications

-The NMLS is a licensing database that helps the states communicate with licensees and applicants. They do not deny or approve a license application, the individual states regulatory authorities do that. They do collect things like licensing fees and house a licensee’s education record. They also assign the licensees unique identifier (NMLS ID#).

Question 21

Background checks performed by the State Regulatory Authority cannot include:

Answer 21

Personal checking account info

-The regulatory authority does not look at a borrower’s personal finances aside from what appears on their credit report.

Question 22

Who determines continuing education requirements and dates for license renewal?

Answer 22

The state Regulatory Authority, under the SAFE Act

-Each state has the authority to add to the requirements under the SAFE Act. They cannot have requirements that are less than what’s required under the SAFE Act.

Question 23

All advertising of a Mortgage Loan Originator must include which of the following?

Answer 23

Their unique identifier

-All MLOs must include their NMLS ID# (unique identifier) on their advertisements.

Question 24

Which of the following are powers/duties of State Regulatory Authorities?

Answer 24

Conduct examinations of licensee’s books and records

-State regulatory authority has a broad responsibility to protect the consumers in that state, this includes things like conducting examinations of a borrower’s books and records. They do not have the authority to arrest or imprison a licensee for a violation or prevent a licensee from taking a continuing education class. They also can only enforce the law, they do not create it.

Question 25

The SAFE Act is designed to do all of the following except:

Answer 25

Reduce fraud by creating an enforcement of unethical activity

-
The SAFE Act implemented the NMLS and standardized minimum requirements for licensure for MLOs over all 50 states. This would help increase the integrity of the industry as a whole, enhance consumer protection and reduce fraud by limiting who can and cannot be an MLO.