Uniform State Test Questions Flashcards
Prior to SAFE, how could a suspended broker set up shop in a new state without the knowledge of the other state regulators?
A) The broker could not; each state compares licensing application against federal, criminal, and credit checks which would have alerted the new state
B) Each state reported suspensions, violations, complaints or other adverse interactions for only 180 days so brokers would “wait it out” then start over
C) The broker could not; each state captured all licensed brokers in a centralized licensing registry
D) Each state acted in its own regulatory silo and did not communicate across state lines with other regulatory personnel
D) Each state acted in its own regulatory silo and did not communicate across state lines with other regulatory personnel
States have been the sole regulators for licensing and registration. Under this practice, the regulators across the 50 states found it challenging to share and/or find information on “bad actors” when complaints were filed.
An MLO scores a 70% on their 2nd attempt at the National exam. What are their options to complete the testing requirement?
A) Wait 30 days to attempt the exam again
B) Wait 6 months to attempt the exam again
C) Retake the portion missed
D) Petition for a conditional application.
A) Wait 30 days to attempt the exam again
Applicants have to pass a required national and state exam with a score of at least 75%. Per the HUD clarification of the SAFE act, the first three tests can be taken within 30 days of each other, but after failing a third attempt at a test, the applicant must wait 6 months before trying again
With respect to confidentiality of information, which of the following statements is not true?
A) Federal Law privacy or confidentiality requirements of any information provided to the NMLS shall not apply after the information has been disclosed to the NMLS.
B) The Commissioner is authorized to enter agreements or sharing arrangements with other governmental agencies or other associations representing governmental agencies.
C) Information and material may be shared with all State and Federal regulatory officials with mortgage industry oversight authority .
D) Information or material that is subject to a privilege or confidentiality shall not be subject to disclosure under any Federal or State law .
A) Federal Law privacy or confidentiality requirements of any information provided to the NMLS shall not apply after the information has been disclosed to the NMLS.
Except as otherwise provided in the SAFE Act, the requirements under any Federal law or [State] public disclosure law regarding the privacy or confidentiality of any information or material provided to the NMLS, shall continue to apply to such information or material after the information or material has been disclosed to the NMLS. Such information may also be shared with all State and Federal regulatory officials with mortgage industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by Federal law. (Source: MSL XX.XXX.150)
What happens if the license of a mortgage loan originator fails to satisfy the minimum standards for license renewal?
A) The license will expire unless the Commissioner adopts procedures for the reinstatement of expired licenses.
B) It will remain active because there are no specific standards set for license renewal.
C) It will remain active provided the MLO pays the corresponding fees plus penalty charges.
D) It will expire permanently.
A) The license will expire unless the Commissioner adopts procedures for the reinstatement of expired licenses.
The license will expire, though a state can create procedures for reinstating a license. Specifically, The license of a mortgage loan originator failing to satisfy the minimum standards for license renewal shall expire. However, the Commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the NMLS. (Source: MSL XX.XXX.090).
Which of the following would NOT be exempt from the mortgage loan originator definition and thus need to be licensed and registered per SAFE rules?
A) Contract Underwriter who makes final lending decisions for loan applications
B) Data Entry Clerk who reviews and forwards all loan applications from mail advertisements to mortgage brokers
C) Employee of a bank or other financial institution whose title is Mortgage Underwriter and who makes lending decisions for loan applications
D) Receptionist who reviews and forwards all loan applications from online submissions to mortgage brokers
A) Contract Underwriter who makes final lending decisions for loan applications
The definition also includes two other categories that differ from a number of standard state laws: 1. Any real estate brokers compensated by a loan originator 2. Processors or underwriters who act as independent contractors.
When should the unique identifier appear on residential mortgage loan application forms, solicitations or advertisements?
A) Only on residential mortgage loan application forms.
B) Never
C) Only when asked by the Commissioner
D) Always
D) Always
The unique identifier of any person originating a residential mortgage loan shall be clearly shown on all residential mortgage loan application forms, solicitations or advertisements, including business cards or websites, and any other documents as established by rule, regulation or order of the Commissioner. (Source: MSL XX.XXX.210)
Which of the following is sufficient to complete the SAFE Act requirement for Nontraditional Mortgage education for a state-licensed MLO applicant?
A) A 1 hour course covering Reverse Mortgages
B) A state mandated NMLS-approved pre-license course
C) A 2 hour NMLS-approved, elective pre-license course on FHA loan programs
D) A 2 hour NMLS-approved Nontraditional Mortgages course on interest only mortgages
D) A 2 hour NMLS-approved Nontraditional Mortgages course on interest only mortgages
State legislation requires applicants to complete 20 hours or more of education. A SAFE Act required component of the education is 2 hours regarding Non-Traditional Mortgage. This education must be NMLS-approved and the NMLS must have classified the course as a Nontraditional Mortgages, regardless of the stated discussion topic.
For the purpose of investigating violations or complaints or for the purpose of examination, the licensee is required:
A) To make available to the Commissioner, upon request, the books and records relating to his operations.
B) To keep his Audited Financial Reports as these are not part of the records that will be requested by the Commissioner.
C) To instruct his officers, principals, mortgage loan originators, employees, agents, and customers not to readily entertain interviews that will be conducted by the Commissioner.
D) Not to have access to the documents or records as necessary to conduct its ordinary business affairs.
A) To make available to the Commissioner, upon request, the books and records relating to his operations.
Each licensee, individual or person subject to this Act shall make available to the Commissioner upon request the books and records relating to the operations of such licensee, individual or person subject to this Act. The Commissioner shall have access to such books and records and may interview the officers, principals, mortgage loan originators, employees, independent contractors, agents, and customers of the licensee. (Source: MSL XX.XXX.160).
With respect to license renewal, which of the following would qualify as a credit under the MLO continuing education requirements?
A) Total of at least 8 hours of education which includes NMLS-approved courses on federal law, nontraditional mortgages and ethics training.
B) 2 hours of federal law and regulations education as approved by the NMLS
C) 2 hours of training related to lending standards for the nontraditional mortgage product marketplace
D) 2 hours of ethics education approved by the NMLS, which includes instruction on fraud
D) 2 hours of ethics education approved by the NMLS, which includes instruction on fraud
Note that all education must be reviewed and approved by the NMLS and that there are specific minimum hourse for each section. Specifically, In order to meet the annual continuing education requirements, a licensed MLO shall complete at least 8 hours of education, which shall include AT LEAST 3 hours of Federal law and regulations, 2 hours of ethics, and 2 hours of training related to lending standards for the nontraditional mortgage product marketplace. (Source: MSL XX.XXX.100(1)). These courses must be approved by the NMLS, per MSL XX.XXX.100(2).
Is the Commissioner authorized to render civil penalties to violators of the Act?
A) Yes, but only upon the review by and approval from the NMLS.
B) Yes, but only after the violation has been established through proper hearing.
C) No, Commissioners are not authorized to impose any kind of penalty to violators of the Act.
D) No, MLO violators are only required to pay the penalty corresponding to their violations.
B) Yes, but only after the violation has been established through proper hearing.
The Commissioner may impose a civil penalty on a mortgage loan originator or person subject to this Act, if the Commissioner finds, on the record after notice and opportunity for hearing, that such mortgage loan originator or person subject to this Act has violated or failed to comply with any requirement of this Act or any regulation prescribed by the Commissioner under this Act or order issued under authority of this Act. (Source: MSL XX.XXX.130)
The federal enforcement body designated to carry out the requirements in states that did not adopt the required legislation and infrastructure is the:
A) American Association of Residential Mortgage Regulators (AARMR)
B) Consumer Financial Protection Bureau (CFPB)
C) Conference of State Bank Supervisors (CSBS)
D) Department of Housing and Urban Development (HUD)
B) Consumer Financial Protection Bureau (CFPB)
The Department originally assigned to determine if a state is in compliance with the SAFE Act and designated as the agency to enforce SAFE Act adoption by state was HUD. The responsibility to enforce the SAFE act was transferred to the CFPB.
In reference to the MLO s annual continuing education requirements, which one of these statements is true?
A) The MLO can claim instructor credits for teaching an approved continuing education course.
B) Continuing education may be offered only in a classroom; online courses are not accepted or approved by the NMLS.
C) In no instance can a person make up for any deficiency in continuing education.
A) A licensed MLO who subsequently becomes unlicensed must take continuing education for any years the MLO was not licensed.
A) The MLO can claim instructor credits for teaching an approved continuing education course.
A licensed MLO who is an instructor of an approved continuing education course may receive credit for the MLO annual continuing education requirement at the rate of 2 hours credit for every 1 hour taught. (Source: MSL XX.XXX.100).
How many hours of Elective Education are required to meet SAFE Education guidelines for mortgage brokers?
A) 3 hours of Elective Education
B) 15 hours of Elective Education to include 2 hours of Applicable State Law
C) 12 hours of Elective Education that can include Applicable State Law
D) 9 hours of Elective Education to include 3 hours of Applicable State Law
C) 12 hours of Elective Education that can include Applicable State Law
20 hours of pre-licensing education courses approved by NMLS. The education must include: - 3 hours of Federal law and Regulation - 3 hours of Ethics, including fraud, consumer protection and fair lending - 2 hours of standards for non-traditional mortgage lending - 12 hours electives.
Which of the following statements regarding the national licensing exam is false?
A) If a loan originator fails the exam once, they must wait for 1 month before re-taking the test
B) A candidate must score at least 75% in order to pass the exam
C) If a loan originator fails the exam three times, they must wait for 12 months before re-taking the test.
D) There are 100 questions on the exam
C) If a loan originator fails the exam three times, they must wait for 12 months before re-taking the test.
Current guidelines for the national exam show there will be 125 questions. Originators must correctly answer 75% of the questions to pass. If they fail the test once, they can retake the test again 1 month later and again 1 month after that. If failed three times, they have to wait 6 months to retake the test and then the cycle starts again.
An MLO with 15 years of experience has learned that he must complete SAFE requirements and his state has the last possible deadline date under the SAFE legislation. When must he complete the requirements?
A) Must be completed by June 31,2009
B) Must be completed by January 1, 2011
C) Must be completed by July 31, 2010
D) Must be completed by December 31, 2010
D) Must be completed by December 31, 2010
While each state is allowed to propose ways to transition existing loan originators, all current loan originators will face the same requirements by the end of 2010.
