WB Chapter 1

Question 1

What is a mortgage?

Answer 1

A mortgage is a written instrument using real property to secure repayment of a debt. It is a financial document that essentially binds the real property and its value as collateral to insure the repayment of the loan by the borrower.

If the borrower does not repay the debt, then that real property and its value would be used for the repayment of that debt. It is considered a voluntary lien.

Question 2

The creation of the Federal National Mortgage Association (FNMA or Fannie Mae) in 1938
increased the

Answer 2

liquidity in the market and allowed for more money to become available for
lenders.

Question 3

Fannie Mae and Freddie Mac are

Answer 3

considered government-sponsored entities

Question 4

** Created the Consumer Financial Protection Bureau (CFPB)?

Answer 4

The Dodd-Frank Wall Street Reform Act

Question 5

Name two things that define an MLO:

Answer 5

A mortgage loan originator or MLO is:

An individual who for compensation or gain or in the expectation of compensation or gain;
Takes a residential mortgage loan application; or
Offers or negotiates terms of a residential mortgage loan.

Question 6

What is the difference between an MILO and a registered MILO?

Answer 6

A registered MLO works for a depository institution and is not licensed.

Question 7

The unique identifier is

Answer 7

is a number that will identify which MLO is originating a loan by appearing on the residential loan application.

Question 8

Name three examples of “clerical or support duties.”

Answer 8

Communicating with a consumer to obtain the information necessary for the processing or underwriting of a loan

Receiving the appraisal

Collecting a VOE

Question 9

An independent contractor is

Answer 9

is basically a loan processor or underwriter who is not under the direct supervision of a licensee.

Question 10

To be licensed as an MILO an individual must

Answer 10

be sponsored.

Question 11

Name the two levels of regulatory authority that MLOs are subject to:

Answer 11

State regulatory authority
Federal regulatory authority

Question 12

Mortgage backed securities
are

Answer 12

are a type of asset-backed security that is secured by a mortgage or collection of mortgages

Question 13

The SAFE Act is the

Answer 13

the key federal law that regulates the licensing process and responsibilities of mortgage loan originators.

Question 14

List out the steps of obtaining a license:

Answer 14

Complete the Application
Complete PE and Testing Requirements
Pay the fees

Question 15

What two things must an applicant give permission for at the time of application?

Answer 15

Criminal Background Check & Credit Report

Question 16

How many hours of pre-licensing education are required for an MLO?

Answer 16

20 hours

Question 17

Alexa is looking to become a licensed MILO, she is unsure about what she needs to know about the National Test. Tell Alexa three things that are important to remember about taking and passing the National Test.

Answer 17

75% is the minimum passing score

She can take the test 3 consecutive times, 30 days apart

If she becomes unlicensed for or more years, she has to retake the test.

Question 18

Give two examples of things that would show financial irresponsibility.

Answer 18

Foreclosures in the past 3 years

Open tax liens

Question 19

What are the three things that are required for renewal?

Answer 19

Continuing Education
Paying the Fees
Maintaining the minimum requirements for initial licensure