Free NMLS SAFE MLO National Test practice questions

Question 01

A creditor delivers the initial Closing Disclosure Wednesday in person, but on Friday the APR increases beyond the applicable tolerance due to a rate change. What is the effect on the closing scheduled for the following Monday?

Question 02

On a payment-option ARM, negative amortization occurs when:

Question 03

Which situation is the clearest example of asset fraud rather than income fraud?

Question 04

A borrower is eligible for a well-suited fixed-rate loan, but the MLO recommends a riskier adjustable-rate product mainly because it fits the MLO's monthly sales quota, not the borrower's needs or interest. This conduct primarily breaches the MLO's duty to:

Question 05

To qualify for Temporary Authority to Operate as a state-licensed MLO in a new state, an individual must have most recently been:

Question 06

Which statement best describes the relationship between the finance charge and the APR?

Question 07

An 'air loan' scheme is characterized by which of the following?

Question 08

A HECM is a 'non-recourse' loan. What does this protection mean for the borrower and heirs?

Question 09

A borrower's credit report shows a strong account on which the borrower is only an 'authorized user,' not the account holder. In evaluating creditworthiness, the underwriter should:

Question 10

During the interest-only period of an interest-only mortgage, what happens to the loan's principal balance if only the required payment is made?

Question 11

The rescission period on a home equity loan secured by the borrower's principal dwelling does not begin to run until which of the following has occurred?

Question 12

A borrower earns $7,500/month. Proposed PITI is $1,800 and other monthly debts (car, cards, student loan) total $900. What is the back-end DTI?