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
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