NMLS SAFE MLO Test

1. Question 1 · Federal Mortgage-related Laws

   Which of the following transactions is covered by RESPA?
   • A.Purchase of a 25-acre vacant land
   • B.Cash sale of a commercial property
   • C.Federally-related mortgage loan on a 1-4 family home
   • D.Home equity loan on a rental property
   Show answer and explanation

   Answer: C. Federally-related mortgage loan on a 1-4 family home

   RESPA applies to federally related mortgage loans secured by a 1-4 family residential property. It does not apply to large tracts of land, commercial properties, or cash transactions.

2. Question 2 · Federal Mortgage-related Laws

   Which of the following is a valid reason to issue a revised Loan Estimate?
   • A.Borrower changes their phone number
   • B.Interest rate is locked after initial disclosure
   • C.Lender updates branding
   • D.Borrower changes their legal name
   Show answer and explanation

   Answer: B. Interest rate is locked after initial disclosure

   A revised Loan Estimate is permitted when interest rates are locked or other valid “changed circumstances” occur.

3. Question 3 · Uniform State Content

   Which national system is used to manage MLO licensing and registration under the SAFE Act?
   • A.FNMA
   • B.FHLMC
   • C.CFPB Database
   • D.NMLS
   Show answer and explanation

   Answer: D. NMLS

   The Nationwide Multistate Licensing System (NMLS) is the centralized system used to track and manage MLO licenses.

4. Question 4 · Mortgage Loan Origination Activities

   Which of the following triggers a complete loan application under the TRID Rule?
   • A.Borrower’s Social Security number only
   • B.Receipt of all six required application elements
   • C.A credit check by the lender
   • D.A signed authorization form
   Show answer and explanation

   Answer: B. Receipt of all six required application elements

   A complete application under TRID includes six key elements: name, income, SSN, property address, estimated value, and loan amount.

5. Question 5 · Mortgage Loan Origination Activities

   If a borrower pays $2,400 annually for property taxes, how much should be collected monthly in escrow?
   • A.$150
   • B.$200
   • C.$250
   • D.$300
   Show answer and explanation

   Answer: B. $200

   $2,400 ÷ 12 months = $200/month

6. Question 6 · Federal Mortgage-related Laws

   Which of the following is not covered under RESPA?
   • A.A federally related mortgage on a primary residence
   • B.A reverse mortgage
   • C.A 10-acre vacant land loan
   • D.A refinance of a conventional 30-year fixed loan
   Show answer and explanation

   Answer: C. A 10-acre vacant land loan

   RESPA does not apply to loans for 25 acres or more, vacant land, or business/agricultural purposes.

7. Question 7 · Federal Mortgage-related Laws

   The Loan Estimate must be delivered or mailed within how many business days of receiving a complete application?
   • A.1
   • B.2
   • C.3
   • D.7
   Show answer and explanation

   Answer: C. 3

   TRID requires the Loan Estimate to be provided within 3 business days after receiving the six application elements.

8. Question 8 · Uniform State Content

   What is the minimum passing score for the national MLO licensing exam?
   • A.65%
   • B.70%
   • C.75%
   • D.80%
   Show answer and explanation

   Answer: C. 75%

   A score of 75% is required to pass the national SAFE MLO licensing exam.

9. Question 9 · Mortgage Loan Origination Activities

   Which document must be used to collect borrower data in a standard mortgage application?
   • A.Uniform Closing Statement
   • B.Form 1003 (URLA)
   • C.Loan Estimate
   • D.Mortgage Servicing Disclosure
   Show answer and explanation

   Answer: B. Form 1003 (URLA)

   The Uniform Residential Loan Application (URLA), also known as Form 1003, is used to collect borrower financial and personal data.

10. Question 10 · Mortgage Loan Origination Activities

    How many discount points are required to pay $3,000 on a $150,000 loan?
    • A.1 point
    • B.2 points
    • C.1.5 points
    • D.0.5 point
    Show answer and explanation

    Answer: B. 2 points

    1 point = 1% of the loan. $3,000 ÷ $150,000 = 0.02 = 2 points

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