Preview Questions Loan Officer | Role Specific Skill

Question 1: Which regulatory change introduced stricter guidelines on high-risk mortgage loans post-2008 financial crisis?

Which action should you take?

Choose only one option

The Truth in Lending Act (TILA)

The Dodd-Frank Act, including the Qualified Mortgage (QM) rule

The Real Estate Settlement Procedures Act (RESPA)

The Home Mortgage Disclosure Act (HMDA)

Question 2: In a client consultation for a business loan, what is the most critical financial metric to evaluate the client's business stability?

Which action should you take?

Choose only one option

The business's market share compared to competitors

The personal credit score of the business owner

The business's cash flow and its ability to meet debt obligations

The future expansion plans of the business

Question 3: What does the amortization schedule of a loan detail?

Which action should you take?

Choose only one option

The loan amount after each monthly payment

The breakdown of monthly payments into principal and interest over time

The total interest paid over the life of the loan

The total loan amount after adjustments

Question 4: Under the Consumer Financial Protection Bureau (CFPB), which of the following is a requirement for loan disclosures?

Which action should you take?

Choose only one option

Disclosures must only focus on the interest rate and term of the loan

Disclosures must be provided in the borrower's native language, even if it is not English

Disclosures must include only the cost of the loan, excluding hidden fees

Disclosures must be clear and concise, with terms and conditions fully explained

Question 5: In assessing creditworthiness, why is it important to consider loan seasoning (the length of time a loan has been held)?

Which action should you take?

Choose only one option

It only affects mortgage loans

Longer loan seasoning indicates better payment behavior and stability

It has no impact on creditworthiness

It guarantees lower interest rates for the borrower

Question 6: What is the primary role of a credit report in client creditworthiness assessment for loan approval?

Which action should you take?

Choose only one option

To determine collateral quality

To calculate the loan-to-value (LTV) ratio

To assess a client's monthly income vs. expenses

To provide a detailed history of a client's past loan repayment