MLO Exam Flashcards — NMLS Study Cards

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Section 8 prohibits kickbacks, fee-splitting, and unearned fees for settlement service referrals. Violations can result in up to $10,000 fine and/or 1 year imprisonment.

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3 business days. The application is triggered when the lender receives 6 data points: borrower name, income, SSN, property address, estimated property value, and loan amount.

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80% LTV. Loans with LTV above 80% require Private Mortgage Insurance (PMI). The Homeowners Protection Act requires automatic PMI termination at 78% LTV.

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General QM: 43% back-end DTI maximum. GSE-eligible QMs may exceed 43% if they meet Fannie Mae or Freddie Mac guidelines.

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1) Borrower name, 2) Income, 3) Social Security Number, 4) Property address, 5) Estimated property value, 6) Loan amount sought.

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Borrowers have 3 business days to cancel a refinance on their primary residence. Does NOT apply to purchase money mortgages. The rescission period begins after the later of: closing, delivery of Truth-in-Lending disclosures, or delivery of rescission notice.

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A straw buyer is a person who purchases property on behalf of another individual who cannot qualify for a mortgage. This is a form of fraud for property/housing and can result in federal criminal charges.

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Unfair, deceptive, or abusive lending practices that take advantage of borrowers. Signs include: excessive fees, loan flipping, equity stripping, balloon payments without disclosure, and steering to higher-cost products.

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A permanent number assigned to each MLO and mortgage company registered in NMLS. It must appear on all loan documents, business cards, websites, and advertising. The number stays with the individual throughout their career.

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20 hours minimum: 3 hours federal law + 3 hours ethics + 2 hours non-traditional lending + 12 hours electives. Some states require additional state-specific hours.