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Question 1 of 7

1. Question
An applicant applies for a mortgage loan through a company that employs mortgage loan originators. During a compliance review, regulators determine that one originator failed to satisfy required qualification standards.

Why could this create a regulatory violation?
- A) MLOs are exempt from qualification standards if supervised by a lender
- B) Mortgage loan originators must be qualified and meet applicable criteria and regulations
- C) Qualification standards apply only to FHA-approved lenders
- D) Qualification requirements apply only after loan consummation
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Question 2 of 7

2. Question
A mortgage company allows a newly hired loan originator to begin originating residential mortgage loans before obtaining the required state license.

Why could this violate federal and state law?
- A) Licensing requirements apply only to independent mortgage brokers
- B) MLOs must be licensed as required under federal and state regulations
- C) Loan originators may operate without licenses for the first year of employment
- D) Licensing is required only for commercial mortgage transactions
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Question 3 of 7

3. Question
A federally regulated depository institution hires an employee to originate residential mortgage loans and assumes federal registration requirements do not apply because the institution is a bank.

Which statement is correct?
- A) MLOs employed by depositories are exempt from all qualification requirements
- B) Depository institutions are regulated only by state mortgage laws
- C) MLOs employed by depositories are still subject to qualification requirements
- D) Qualification requirements apply only to non-depository lenders
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Question 4 of 7

4. Question
A state regulator discovers that a mortgage company allowed a loan originator to begin work before completing the required criminal background review.

Why could this violate mortgage licensing requirements?
- A) Background checks are optional if the applicant has prior mortgage experience
- B) Criminal background checks are required for mortgage loan originators
- C) Background reviews apply only to commercial lenders
- D) Background checks are required only after state licensing approval
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Question 5 of 7

5. Question
A licensing authority denies an MLO application after determining the applicant failed to meet minimum ethical conduct and trustworthiness standards.

Which requirement is most directly involved in this decision?
- A) Debt-to-income qualification standards
- B) Escrow account regulations
- C) Character and fitness requirements
- D) Appraisal independence rules
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Question 6 of 7

6. Question
An applicant completes mortgage loan originator education but fails the required licensing examination. The applicant nevertheless attempts to begin originating residential mortgage loans.

Why could this violate licensing regulations?
- A) Mortgage loan originators must satisfy required training, education, and testing requirements
- B) Licensing exams are voluntary for federally related mortgage loans
- C) Education requirements apply only to commercial mortgage lending
- D) Testing requirements apply only to mortgage brokers, not employees
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Question 7 of 7

7. Question
A non-depository mortgage company hires loan originators but does not require them to obtain state-issued mortgage licenses.

Why could this create a regulatory problem?
- A) State licensing applies only to depository institutions
- B) Non-depository mortgage lenders are exempt from state regulation
- C) Licensing requirements apply only to FHA-approved lenders
- D) MLOs employed by non-depositories are subject to state licensing requirements
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