Preview Questions Loan Officer | Role Specific Skill

Question 1: Which of the following is NOT covered under the Dodd-Frank Wall Street Reform and Consumer Protection Act?

Which action should you take?

Choose only one option

Consumer Financial Protection Bureau (CFPB)

Truth in Lending Act (TILA)

Volcker Rule

Bank Secrecy Act (BSA)

Question 2: What is the key feature of a reverse mortgage?

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It allows homeowners aged 62 or older to convert home equity into loan proceeds

It is an interest-only loan for homebuyers

It is only available for commercial properties

It requires monthly repayments for the loan term

Question 3: Which of the following is an example of a red flag under anti-money laundering (AML) regulations?

Which action should you take?

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A borrower paying off a small loan in full early

A borrower making early payments on a loan

A borrower submitting multiple loan applications within a short period

A borrower with a high credit score requesting a large loan

Question 4: Which regulation mandates the collection and reporting of demographic data related to residential loan applicants in the United States?

Which action should you take?

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The Equal Credit Opportunity Act (ECOA), which mandates equal access to credit regardless of race or gender

The Home Mortgage Disclosure Act (HMDA), which requires lenders to report data on loan applications

The Dodd-Frank Act, which focuses on consumer protection and financial stability

The Fair Housing Act (FHA), which mandates fair access to housing for all racial and ethnic groups

Question 5: In loan underwriting, when considering a borrower's credit risk, which of the following financial products would mitigate risk?

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A secured loan product where the borrower offers collateral to back the loan

Cash advances, which are high-risk and generally carry high interest rates

Unsecured loans, which are based solely on creditworthiness without collateral

Personal lines of credit, which offer flexibility but no collateral

Question 6: When preparing loan documentation for a fixed-rate mortgage, which of the following is essential to calculate the loan terms?

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A recent property appraisal, establishing the value of the home

The borrower's credit report, showing their ability to repay the loan

The interest rate and loan term, which define the borrower's repayment schedule and total interest cost

The borrower's current employment status, ensuring stable income for repayment