Prepare MLO Exam Questions [2025] Recently Updated Questions [Q33-Q49]

NO.33 Which of the following entities is the primary regulatory authority for state-licensed, non-depository lenders?

NMLS

The Federal Trade Commission

A state regulator

The Conference of State Bank Supervisors

NO.34 According to the Truth in Lending Act (TILA), a dwelling includes which of the following?

An unimproved lot

A six-unit apartment complex

An individual condominium unit

A timeshare

NO.35 Which of the following loans is subject to right of rescission?

A purchase loan secured by a rental home

A refinance loan secured by a vacation home

A cash-out refinance loan on a primary residence

A rate and term refinance loan through the same creditor

NO.36 Which of the following acts provides a state licensing and regulatory agency to investigate and examine a mortgage company?

SAFE Act

Truth in Lending Act (TILA)

Real Estate Settlement Procedures Act (RESPA)

Home Ownership and Equity Protection Act (HOEPA)

NO.37 Illegal fee splitting occurs when:

two service providers split a fee.

wages are split by two employees.

fees are split between lender and broker.

three companies split a fee but one did no work.

NO.38 Which of the following is not a primary function for compensation undertaken by a mortgage loan originator on an FHA loan?

Taking an application

Offering or negotiating credit terms

Assisting a consumer in applying for credit

Performing real estate brokerage activities

NO.39 Which of the following scenarios describes an assumable loan?

A borrower has an option to take out a second mortgage

A borrower has an option to choose a loan servicer.

A purchaser of a property may be able to take over the existing loan payments.

A loan holder can sell the loan.

NO.40 A borrower’s monthly debt-to-income ratio is calculated by taking the:

borrower’s gross monthly housing expense divided by the principal, interest, and appraised value.

eligible total monthly debt obligations, including the monthly housing expense, divided by the borrower’s gross monthly income.

eligible total monthly debt obligations for trade lines greater than 12 months multiplied by the borrower’s net monthly income.
D eligible total monthly debt obligations excluding the monthly housing expense divided by the borrower’s net monthly income

NO.41 Which of the following must be included in advertisements displayed by mortgage loan originators (MLOs) on their social media pages for mortgage services including payment amounts?

The APR

The MLO’s personal website

The MLO’s business address

The number of days that the rate is available

NO.42 What is the minimum amount of flood insurance a lender must require on a residential building located in a special flood hazard area?

$50,000 for residential property structures

$150,000 for residential property structures

$250,000 for residential property structures

$350,000 for residential property structures

NO.43 According to Federal Reserve Regulation Z, which of the following fees is a finance charge in a residential mortgage transaction?

Notary

Interest

Credit report

Title Insurance

NO.44 Which of the following items is a liquid asset?

Antique jewelry

Publicly traded stocks

Net worth of a business

An automobile owned free and clear

NO.45 During the loan application process, which of the following documents specifies the time period that a mortgage lender agrees to hold the mortgage interest rate at a certain percentage?

Loan application

Preapproval letter

Closing Disclosure

Rate lock agreement

NO.46 Which of the following is an example of a non-fluctuating income source?

Salaried W-2 position

Self-employed income

Commission-based W-2 income

Part-time work with irregular hours

NO.47 Which of the following applicant characteristics is legally permitted to be considered in evaluating credit risk?

Whether the applicant seems likely to have children

Whether the applicant has a phone number listing in their name

Whether the applicant’s age makes them ineligible for credit-related insurance

Whether the alimony payments the applicant relies on for income are likely to continue and to be consistently made

NO.48 Which of the following activities is an example of redlining in mortgage lending?

Ensuring that all creditworthy borrowers are afforded equal treatment when applying for a mortgage loan

The mortgage loan originator convincing the underwriter to move their loan file to the front of the line or “redline” it

The act of the mortgage lender putting a “red line” under the borrower’s name in a file to indicate they are a substandard applicant

The systematic denial of various services to residents of specific, often racially associated, neighborhoods or communities, either explicitly or through the selective raising of prices

NO.49 An individual who is a loan processor or underwriter must maintain a state originator license if they:

perform clerical duties for a mortgage lender as a supervised employee

are not in communication with the consumer to obtain mortgage loan information.

are an independent contractor and collect, receive or distribute information in connection with making a credit decision.

are an employee of a loan processing or underwriting company that supports a mortgage broker/lender and only perform supervised clerical duties.