A covered bank employee acts as an MLO in six residential mortgage transactions during a rolling 12-month period. Can the bank rely on the federal de minimis exception?
A. Yes, because every employee may originate up to ten loans
B. Not if the employee exceeds five transactions during the rolling 12-month period
C. No; the exception is limited to an employee who has never acted as an MLO before
D. Yes, if all six borrowers consent
Source: PRIMARY -- 12 CFR 1007.101(c)(2): de minimis exception
A licensee stores all loan records with an outside processor. During an examination, who is responsible for making the records available?
A. Only the processor, never the licensee
B. The borrowers collectively
C. The licensee remains responsible for access and production
D. No one, because outsourced records are exempt
Source: PRIMARY -- MSL XX.XXX.160(1) and (5): access to records and licensee control
Why can the conforming loan limit differ by location and property units?
A. Each appraiser selects a private limit
B. The borrower chooses the limit
C. The note rate determines it
D. FHFA establishes baseline and high-cost-area limits, with adjustments for multi-unit properties
Source: PRIMARY -- Conforming Loan Limit structure and annual determination
An applicant was convicted 12 years ago of a felony involving fraud and has not been pardoned. What does the model law generally provide?
A. The fraud felony remains disqualifying regardless of how long ago it occurred
B. It is ignored because more than seven years passed
C. It matters only if a borrower complained
D. It converts automatically into a civil violation
Source: PRIMARY -- MSL XX.XXX.060(2)(b): fraud, dishonesty, breach-of-trust, and money-laundering felonies
A fixed-rate borrower asks whether the total monthly payment can ever change. What is the best answer?
A. No component can ever change
B. Principal and interest are fixed, but escrowed taxes or insurance can change
C. The interest rate changes annually
D. The loan balance increases every month
Source: PRIMARY -- Fixed-rate mortgage explanation
