EMT Practice Test

1. Question Content...

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Question1: In a federally related mortgage loan transaction, a charge for a settlement service by a person for which no services or nominal services are performed is prohibited:

Question2: Which of the following sources of funds is acceptable to utilize for down payments, closing costs or financial reserves?

Question3: A second (subordinate) mortgage loan includes:

Question4: According to the TILA-RESPA Integrated Disclosure rule (TRID), changed circumstances that may result in a revised Loan Estimate include which of the following situations?

Question5: How many continuing education hours must mortgage loan originators complete every year to renew their license?

Question6: Which of the following is an example of a non-fluctuating income source?

Question7: Which of the following statements defines the term "business day" in a mortgage rescission under the Truth in Lending Act (TILA)?

Question8: The debt-to-income analysis should assess a borrower's total monthly housing related payments as a percentage of the:

Question9: Which of the following activities is a function of the Consumer Financial Protection Bureau (CFPB)?

Question10: Which of the following is an origination fee?

Question11: Which of the following acts provides a state licensing and regulatory agency to investigate and examine a mortgage company?

Question12: A licensed mortgage loan originator (MLO) sharing his commission with another licensed MLO at his company for actual services performed on a loan is considered which of the following terms?

Question13: A mortgage loan originator (MLO) is in the process of taking an application for a 30-year mortgage, and the borrowers are over 72 years old. Which of the following actions must the MLO take?

Question14: According to the Truth in Lending Act (TILA), the term "finance charge" includes which of the following charges?

Question15: A borrower works at Company XYZ and was recently approved for a cash-out refinance of her primary residence. The closing is scheduled for Friday. On Monday of closing week, the mortgage loan originator (MLO) sees on the local news that XYZ is closing and the employees have been let go. Which of the following actions, if any, should the MLO take?

Question16: Which of the following statements describes an advantage of a purchase money second mortgage?

Question17: Upon becoming employed by a state-licensed mortgage company, an individual who works for a depository institution as a mortgage loan originator (MLO) shall not be deemed to have temporary authority to act as an MLO in an application state if which of the following events has occurred?

Question18: Which of the following loans is subject to right of rescission?

Question19: The Equal Credit Opportunity Act (ECOA) defines the term "elderly" as anyone:

Question20: For an FHA loan, which of the following payments must a borrower make to protect a lender in case of a foreclosure?

Question21: The loan-to-value ratio for an FHA loan is calculated by dividing the loan amount by:

Question22: What is the maximum APR that will qualify as a Safe Harbor qualified mortgage?

Question23: A mortgage loan in which a large portion of the borrowed principal is repaid at the end of the loan period is known as a:

Question24: Which of the following actions should a mortgage loan originator (MLO) take if a real estate broker offers the MLO $500 to obtain a purchase-money mortgage for the real estate broker's client?

Question25: Which of the following responses describes the required amount of flood insurance coverage?

Question26: Which of the following documents is a real estate conveyance?

Question27: If a mortgage loan includes a prepayment penalty, it must be included on which of the following disclosures?

Question28: Which of the following responses describes the main purpose of the secondary market?

Question29: Which of the following items may lenders use to verify a borrower's income for his ability to repay a mortgage?

Question30: The SAFE Act prohibits individuals from engaging in the business of a residential mortgage loan originator without first obtaining a:

Question31: A mortgage loan originator (MLO) originates a 5/1 ARM where the indexed rate is likely to be higher than the introductory rate. The Truth in Lending Act (TILA) states that an MLO must calculate a borrower's monthly Payment amount based on which of the following?

Question32: Consumer complaints and the analysis of complaints play a vital role in identifying weaknesses in elements of a company's:

Question33: Which of the following components of an ARM adjusts periodically?

Question34: How many days after loan consummation does a lender have to refund an excess charge subject to the 10% aggregate tolerance?

Question35: A borrower's monthly debt-to-income ratio is calculated by taking the:

Question36: Which of the following entities is the primary regulatory authority for state-licensed, non-depository lenders?

Question37: Interest-only mortgages are considered high risk compared to traditional mortgage products because:

Question38: A real estate broker overhears her buyer discussing what she believes to be illegal activities while on a phone conversation. The real estate broker notifies the buyer's mortgage loan originator (MLO) that the borrower may be using illegally acquired funds as down payment for this property. The MLO decides to report some suspicious cash deposit transactions found in the borrower's bank records. Under the Patriot Act, the MLO may discuss the filing of this report with which of the following parties, if any?

Question39: Which of the following loan types is regulated by the Home Ownership and Equity Protection Act (HOEPA)?

Question40: Which of the following federal laws requires disclosures intended to prevent lenders or mortgage loan originators (MLOs) from increasing fees during the origination process?

Question41: Which of the following fees or charges is an allowable closing cost typically found on a Closing Disclosure?

Question42: A borrower who knowingly makes false statements on a federally related mortgage loan to obtain property may be:

Question43: Under the TILA-RESPA Integrated Disclosure rule (TRID), what is the minimum time period that must pass between a borrower's receipt of a Loan Estimate and the closing of a mortgage loan?

Question44: According to the SAFE Act, which of the following activities requires licensure as a mortgage loan originator?

Question45: A lender is permitted to accept the employment information provided by the borrower on the initial loan application without asking for a letter of explanation in which of the following circumstances?

Question46: According to the Truth in Lending Act (TILA), which of the following advertising statements does not require additional disclosures to supplement the advertisement?

Question47: An appraiser agrees to give a mortgage loan originator (MLO) half of her appraisal fees in return for the MLO's future business. This illegal practice is known as:

Question48: Which of the following items is a liquid asset?

Question49: Which of the following entities has the primary enforcement authority under the Red Flags Rule?

Question50: A creditor receives an application with all the required pieces of information but wants to have additional information to determine a borrower's qualifications for a loan. Which of the following actions is most compliant with industry regulations?

Question51: Which of the following fees is a finance charge?

Question52: Prepaid charges include which of the following items?

Question53: How often must a nonexempt telemarketing entity check their call list against the National Do Not Call Registry?