During a Virginia renewal checklist, a loan file reviewer must resolve a question about sponsorship and employment status. Which statement should control?
Correct Answer
D) Virginia applies the stated financial-responsibility, bond, credit-history, or net-worth requirement.
Virginia MLO applicants must be covered by either an individual bond or a bond filed by the Chapter 16 licensed or exempt person for whom they are an employee or exclusive agent, and the minimum bond is $25000 or a greater amount required by the Commission based on preceding-calendar-year origination volume.
Why This Is the Correct Answer
Virginia applies the stated financial-responsibility, bond, credit-history, or net-worth requirement. This is correct because Virginia MLO applicants must be covered by either an individual bond or a bond filed by the Chapter 16 licensed or exempt person for whom they are an employee or exclusive agent, and the minimum bond is $25000 or a greater amount required by the Commission based on preceding-calendar-year origination volume.
Why the Other Options Are Wrong
Option A: Virginia treats bond coverage as optional if the MLO is sponsored or has passed the SAFE test.
Virginia treats bond coverage as optional if the MLO is sponsored or has passed the SAFE test. is not correct because it does not match the Virginia rule applied in this scenario.
Option B: Virginia allows MLOs to keep originating after sponsor termination while NMLS sponsorship is pending.
Virginia allows MLOs to keep originating after sponsor termination while NMLS sponsorship is pending. is not correct because it does not match the Virginia rule applied in this scenario.
Option C: Virginia mortgage records may be mixed with unrelated business records and destroyed normally once the file closes.
Virginia mortgage records may be mixed with unrelated business records and destroyed normally once the file closes. is not correct because it does not match the Virginia rule applied in this scenario.
Memory Technique
VA -> sponsorship and employment status
Exam Tip
Identify the Virginia state requirement first, then choose the answer that preserves licensing, disclosure, record, supervision, or enforcement compliance.
Common Mistakes to Avoid
- -Using a generic national rule when the Virginia state requirement controls
- -Treating Virginia licensing, reporting, advertising, records, or enforcement duties as optional
More UST Questions
In a pricing desk question, an audit analyst sees facts tied to Prohibited Misrepresentation. What should the file reflect?
An applicant previously had an MLO license revoked by a state regulator. Under the SAFE Act minimum standards for a new state-licensed MLO license, which statement is correct?
Which statement correctly distinguishes a license suspension from a license revocation?
A state regulator has issued an order suspending an MLO's authority effective immediately. The MLO has filed an appeal, but no stay has been granted. What should the MLO do?
An MLO license application asks whether the applicant has been the subject of a regulatory order. The applicant has a recent consent order that falls within the question. What is the proper response?
Why does NMLS maintain licensing and enforcement information that participating regulators can access?
A regulator issues a final license suspension without giving the MLO notice of the alleged violation or any opportunity to respond, even though applicable law requires both. What issue is presented?
A regulator finds that an MLO charged consumers prohibited fees. Which set of actions is consistent with the enforcement tools contemplated by Regulation H?
An MLO's license status in NMLS changes to suspended, with no stay or reinstatement shown. What is the immediate operational effect?
Which fact most directly supports disciplinary action against an MLO rather than merely a request for additional application information?
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