SAFE MLO Test Practice Questions by Topic

The Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.) and Regulation X (12 CFR Part 1024): Section 8 kickbacks and unearned fees, affiliated business arrangements, the special information booklet, escrow account limits and statements, servicing transfers, qualified written requests and error resolution, and force-placed insurance.

The Truth in Lending Act and Regulation Z (12 CFR Part 1026): finance charge and APR, the right of rescission, advertising trigger terms, higher-priced mortgage loans (HPML) and high-cost mortgages under HOEPA, with the dollar thresholds that adjust every January.

The TILA-RESPA Integrated Disclosure rule (12 CFR 1026.19(e)-(f), 1026.37-38): what triggers an application, Loan Estimate and Closing Disclosure timing under the two business-day definitions, waiting periods, tolerance buckets, changed circumstances, revised disclosures and cures.

Regulation Z's ability-to-repay rule and qualified mortgage definitions (12 CFR 1026.43), points-and-fees limits, and the loan originator compensation and anti-steering rules (12 CFR 1026.36), including dual-compensation limits and the safe harbor.

The Equal Credit Opportunity Act and Regulation B (12 CFR Part 1002), the Fair Housing Act, and the Home Mortgage Disclosure Act and Regulation C (12 CFR Part 1003): prohibited bases, notices of action taken, appraisal copies, demographic information and record keeping.

FCRA/FACTA and Regulation V, Gramm-Leach-Bliley privacy (Regulation P) and the Safeguards Rule, the Bank Secrecy Act and FinCEN SAR rules for non-bank lenders, the Telemarketing Sales Rule and Do-Not-Call, the MAP rule (Regulation N), the Homeowners Protection Act, E-SIGN, and which agencies enforce what.

The SAFE Act (12 U.S.C. 5101 et seq.), Regulations G and H, and the CSBS/AARMR Model State Law: who needs a license or registration, NMLS unique identifiers, pre-licensing education, the SAFE MLO Test, background checks, continuing education, renewal and temporary authority to operate.

State mortgage regulators under the Model State Law: the commissioner's powers, investigations and examinations, prohibited acts, advertising and NMLS ID display, record keeping, mortgage call reports, and penalties such as license denial, suspension, revocation and civil money penalties.

Conventional conforming and non-conforming loans (Fannie Mae, Freddie Mac), FHA (HUD Handbook 4000.1), VA, USDA Rural Development, private mortgage insurance, and qualified versus non-qualified mortgage programs.

Fixed-rate, adjustable-rate (index, margin, caps), balloon, interest-only, reverse (HECM), home equity lines, construction and bridge loans, and the vocabulary the test uses: liens, amortization, escrow, points, rate locks, the secondary market and more.

Taking an application: the six pieces of information that make an application under TRID, the Uniform Residential Loan Application (URLA/Form 1003), required early disclosures, verifying identity, rate locks, pre-qualification versus pre-approval, and what an MLO may and may not do before a Loan Estimate is issued.

How a file is processed and underwritten: income and employment verification, assets and reserves, credit reports and scores, the appraisal and property eligibility, title, hazard and flood insurance, and the four Cs of credit.

From clear-to-close to funding: the closing process, settlement agents, title insurance, the Closing Disclosure at the table, rescission and disbursement, the promissory note and security instrument, recording, and post-closing.

The math the test expects with a basic calculator: debt-to-income ratios, LTV and CLTV, discount points, prepaid (per diem) interest, PITI, ARM rate adjustments with caps, mortgage insurance, down payment and cash to close, income calculations and tolerance cures.

Mortgage fraud schemes (occupancy, income, straw buyers, air loans, flipping, appraisal fraud), red flags in a loan file, predatory practices (equity stripping, loan flipping, packing), and what an MLO must do when something looks wrong.

Ethical behavior in origination: honest dealing with borrowers, conflicts of interest, steering, fair lending in practice, UDAAP, truthful advertising and social media, borrower data protection, and relationships with real estate agents, appraisers and settlement providers.