California State NMLS Practice Test Graded A+, 2022/2023

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California State NMLS Practice Test Graded A+ "Federal banking agencies" include: Answers A. The Director of the Office of Thrift Supervision, the Board of Governors of the Federal Reserve System... , and FDIC B. Fannie Mae and Freddie Mac C. The Comptroller of the Currency and the National Credit Union Administration D. A and C ✔✔D. A borrower approaches a lender to refinance their existing negative amortization loan, which was originated by that same lender. Which of the following statements is incorrect? A. The lender must make due regard for the borrower's ability to repay the new loan. B. The new loan cannot be a stated income pay option arm. C. The lender can collect a prepayment penalty, as long as it does not exceed 1.75% of the principal balance. D. If their existing mortgage is a reverse mortgage, it is not considered a negative amortization loan. ✔✔C.A borrower cannot be required to pay interest on the principal balance of a loan secured by a mortgage on real property more than how many days prior the date that loan proceeds are disbursed from escrow? Answers A. One (1) day B. Three (3) days C. Five (5) days D. Seven (7) days ✔✔A. A borrower's file requires a VOD, however currently, the borrower has no money but is expecting an inheritance check. What can the MLO do? Answers A. The MLO may request the VOD takes place after the funds are deposited B. Request the borrower to take out a pay day advance loan, put it in his account, and repay it once the verification is done C. The MLO may loan the borrower money and take it back after the VOD is complete ✔✔A. A foreclosure consultant may not charge a fee in which exceeds ___ percent per annum of a loan which the consultant makes to the owner. Answers A. 10%B. 20% C. 3% D. 5% ✔✔A. A late charge may be imposed for late payment of an installment due on a mortgage loan or deed of trust but cannot exceed greater than $5 or ___ percent of the installment due. Answers A. One (1) percent B. Three (3) percent C. Five (5) percent D. Ten (10) percent ✔✔C. A mortgage broker's fiduciary duty to a client involves which of the following? Answers A. A duty of exclusivity B. Full disclosure to the client, even at the expense of another client C. Putting the client's economic interest ahead of the broker's own D. Securing the best loan which the client could hope to find ✔✔C. A mortgage company advertises for loans in both Spanish and English. Which of the following statements is true?Answers A. The mortgage company must provide the key disclosures such as the TIL and Good Faith Estimate in Spanish to their Spanish speaking clients. B. At least 40% of the employees of the company must be bilingual. C. The company must have at least one native Spanish speaker available during regular business hours. D. The actual loan documents (note, mortgage, deed, etc.) must be provided in Spanish. ✔✔A. A mortgage loan originator must pass the licensing test in order to obtain a new license if he has failed to maintain a license over how many years? Answers A. Five (5) years B. Seven (7) years C. Ten (10) years D. MLOs do not ever have to retake the licensing test ✔✔A. A mortgagee must execute a certificate of the discharge of a mortgage and record it in the county in which the mortgage is recorded within how many days after the mortgage has been satisfied? Answers A. Thirty (30) daysB. Sixty (60) days C. Ninety (90) days D. One hundred twenty (120) days ✔✔A. A mortgagee must furnish the mortgagor a written statement showing the amount of moneys received for interest, repayment of the principal of the loan, and late charges within how many days of the end of the calendar year? Answers A. Fifteen (15) days B. Thirty (30) days C. Sixty (60) days D. Ninety (90) days ✔✔B. A person cannot serve as an officer, director, or other key employee or control person of a residential mortgage lender if he has been held liable in a civil or administrative action within how many years? Answers A. Three (3) years B. Five (5) years C. Seven (7) years D. Ten (10) years ✔✔B.A person receiving monthly principal and interest payment is which of the following? Answers A. Lender / Servicer B. Broker C. Mortgage Banker D. Escrow Company ✔✔A. A prepayment charge can be imposed on any amount prepaid in any twelve (12) month period which exceeds __ percent of the original principal amount of the loan. Answers A. 10% B. 15% C. 20% D. 25% ✔✔C. A "Registered Mortgage Loan Originator": Answers A. Is registered with NMLS but has not completed all the prerequisites for licensing B. Works as a mortgage loan originator and is employed by a depository institutionC. Works for a Federal Banking agency as a loss mitigation specialist D. Has met additional registration requirements with The Farm Credit Administration and Federal Banking Agencies ✔✔B. A "unique identifier" is described as: Answers A. A unique combination of the scrambling of your driver's license number and social security number that must be provided to each applicant you meet. B. Your personal social security number that must be posted in your licensed mortgage production branch office. C. Your identification number with the IRS that must be on each mortgage document in the loans you originate. D. The number assigned to you when you become a registered loan originator with the NMLS. ✔✔D. According to the legal definition, a mortgage: Answers A. Does not include an estate for years in real property B. Involved a hypothecation which necessitates a change in possession C. Can be created or renews orally or in writingD. Can be created on property held adversely to the mortgagor ✔✔D. Advertisements that make a representation of a specific installment in repayment of a loan must also make an equally prominent disclosure of the following information about the loan, except: Answers A. Down payment amount B. Simple annual interest rate and annual percentage rate C. Number, amount and period of payments scheduled to the date of maturity D. Balance due at maturity (balloon payment) if not fully amortized ✔✔A. After a disciplinary order is made final, a licensee has how many days to ask the court to restrain enforcement of the order? Answers A. Five (5) days B. Fifteen (15) days C. Thirty (30) days D. Sixty (60) days ✔✔B All licenses for mortgage loan originators will now expire __________, and continuing education for renewal should be completed __________ each year, to be effective the following year. AnswersA. One year from the date of issuance/one month before expiration B. On December 31/before December 1 C. On January 1/before December 1 D. December 31/before October 31 ✔✔D. All of the following are true regarding a disciplinary action against a California mortgage loan originator licensee, except: Answers A. Licensees may petition in writing for a monetary penalty at any time after filing of an accusation and before the effective date of a decision B. No specific form of petition is required C. Petitioners must automatically cease and desist all origination activities until a decision has been rendered D. Upon receipt of a the petition, the Commissioner may grant a stay of the effective date of the decision up to 30 days for the purpose of determining whether the public interest will served if the petition is granted ✔✔C. An applicant for a mortgage loan provides a lender with funds to cover bona fide third party expenses in connection with the applied for loan. Which of the following statements is not true? Answers A. The funds must be placed in a separate account.B. The lender must keep and provide accurate accounting, and receipts, for all funds collected. C. The lender cannot collect 3rd party fees and must direct the applicant to pay the 3rd parties directly. D. The lender cannot retain any portion of the 3rd party fees. ✔✔C. An applicant for a residential mortgage lender or servicer license must agree to keep and maintain business records and other information required by law for how many months from the date of final entry of any mortgage loan? Answers A. Six (6) months B. Twelve (12) months C. Twenty four (24) months D. Thirty Six (36) months ✔✔D An application for a loan originator license may be denied for all the following reasons EXCEPT if the applicant: Answers A. Pled guilty to a felony involving personal conduct nine (9) years agoB. Has not completed pre-licensing education requirements C. Had a loan originator licensed revoked in TN three (3) years ago D. Has failed to demonstrate the required financial responsibility ✔✔A An attorney is helping a client handle their estate, and the attorney is handling a variety of real estate issues. Which of the following would be in violation of the attorney's mortgage originator exemption? Answers A. The attorney suggests that the client's real estate holdings be placed into a trust. B. The attorney reviews the client's loan closing documents for accuracy. C. The attorney reviews the good faith estimate and truth in lending disclosures with the client, and explains the client's legal obligations in regards to the documents. D. The attorney suggests that the client refinance their loan to a lower interest rate, and the lender pays the attorney a monthly fee for his services. ✔✔D. An individual engaging in mortgage loan modification or forbearance activities for a fee who takes a power of attorney from a borrower: AnswersA. Is guilty of prohibited conduct and may be imprisoned for up to one (1) year in jail. B. Is guilty of prohibited conduct and may be fined for up to $5,000 per offense. C. Is guilty of prohibited conduct and may be imprisoned and/or fined for up to $10,000 and one (1) year in jail D. Is guilty of prohibited conduct and may be imprisoned for up to two (2) years in jail. Incorrec ✔✔A An individual may retake a test three (3) consecutive times, provided that each retake occurs at least thirty (30) days after the preceding test. After failing three (3) consecutive tests, an individual shall wait at least _______ months before taking the test again. Answers A. Six (6) B. Three (3) C. Two (2) D. One (1) ✔✔A. As a broker, you only have to put your NMLS number on what type of materials? Answers A. Loan applicationsB. Advertising materials C. On the branch business door D. Closing statements ✔✔B Assuming a residential mortgage lender or servicer licensee's fiscal year ends December 31st, he must prepare and file with the commissioner a report giving the information necessary to make the annual assessment calculation by: Answers A. January 31st B. February 15th C. March 1st D. April 30th ✔✔A. At least two (2) days prior to closing, a mortgage loan company shall provide to the borrower(s) the following federal disclosures specific to the mortgage loan the borrower(s) is receiving: Answers A. Good Faith Estimate B. Truth in Lending Statement C. HUD Statement D. A and B ✔✔D.At the end of the year, one of the following occurs: a mortgage loan originator does not apply to renew their license, the director declines to renew the mortgage loan originator's license, or the loan originator does not otherwise maintain eligibility under the requirements. What is the best term to describe the status of their license at that point? Answers A. Expired B. Suspended C. Revoked D. Surrendered ✔✔A. 32.) California mortgage loan originators or required to register with __________. Answers A. The Bureau of Loans B. The Secretary of State C. The Nationwide Mortgage Licensing System (NMLS) D. The California Department of Banking ✔✔C. Chuck, the owner of a mortgage lender, hires his good friend Eric as a loan originator. Chuck trusts Eric to do his job and does not interfere or interrupt Eric in any way when Eric is originating. Later, it is brought to the attention of the director that Eric h [Show More]

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