Free MLO Practice Test Questions 2026

When a consumer applies for an ARM, the creditor must provide a variable-rate program disclosure:

A. No later than three business days before loan consummation.

B. No later than seven business days before loan consummation.

C. After the creditor has received documents verifying information related to the consumer's application.

D. At the time an application form is provided or before the consumer pays a nonrefundable fee, whichever is earlier.

If a borrower only receives commission pay for 18 months, which of the following actions should a mortgage loan originator (MLO) take?

A. Take the application but tell the borrower that they will need a cosigner

B. Take the application because positive factors may offset the short income history

C. Tell the borrower they need a steady income and not one that fluctuates

D. Tell the borrower to come back in 6 months when they will have 24 months of commission pay

A title insurance policy ensures that:

A. A condominium is warrantable.

B. The title commitment is accurate.

C. The borrower owns the property.

D. The borrower can repay the loan.

A licensed mortgage loan originator (MLO) sharing his commission with another licensed MLO at his company for actual services performed on a loan is considered which of the following terms?

A. Tip sharing

B. Fee splitting

C. Single fee method

D. Double fee method

Which of the following scenarios is permissible according to the SAFE Act?

A. An unlicensed assistant to a mortgage loan originator (MLO) conducts MLO activities under the authority of the MLO's unique identifier and licenses.

B. An MLO who is not licensed in a subject property's state still originates the loan under the authority of the company's license in that particular state.

C. A third-party underwriter conducts administrative and clerical duties while working under the supervision of a licensed MLO with their organization.

D. An underwriter who is functioning as an independent contractor conducts administrative and clerical duties while working under the supervision of a licensed MLO.

Which of the following settlement costs is considered a prepaid item?

A. Closing fee

B. Recording fee

C. Title insurance

D. Real estate taxes

Under which of the following programs is a creditor required to provide disclosures to the consumer that fully describe each of the creditor's variable-rate loan programs in which the consumer expresses an interest?

A. ARM

B. FHA

C. Fixed

D. Construction

Consumer complaints and the analysis of complaints play a vital role in identifying weaknesses in elements of a company's:

A. hiring procedures and training.

B. compliance management training and internal controls

C. secondary marketing practices of selling loans to investors.

D. compliance management, senior management and branch locations.

Which of the following acts provides a state licensing and regulatory agency to investigate and examine a mortgage company?

A. SAFE Act

B. Truth in Lending Act (TILA)

C. Real Estate Settlement Procedures Act (RESPA)

D. Home Ownership and Equity Protection Act (HOEPA)

How often must a nonexempt telemarketing entity check their call list against the National Do Not Call Registry?

A. Every 7 days

B. Every 2 weeks

C. Every 31 days

D. Annually

Which of the following individuals is required to be licensed as a mortgage loan originator (MLO)?

A. A seller providing financing to the purchaser of a dwelling owned by the seller

B. A loan processor performing clerical duties under the direction and supervision of a licensed broker

C. An MLO’s assistant explaining and describing the steps that a borrower will need to take in order to obtain a loan

D. An underwriter presenting a revised loan offer to a borrower under the direction and supervision of a licensed lender

The ability to originate loans under temporary authority applies to which of the following?

A. Previously licensed real estate brokers

B. Previously registered mortgage loan originators (MLOs)

C. An MLO who has scheduled their test but not completed it

D. An MLO who is still waiting for their credit check to be completed