Mortgage Loan Originator (MLO) Licensing Practice Test

Fannie Mae's guidelines allow certain fees to be charged to credit cards as part of a mortgage application process. The correct answer indicates that borrowers can use credit cards for fees up to 1% of the loan amount, which includes an additional $500 specifically for appraisal and credit report fees. This reflects Fannie Mae's intent to maintain a reasonable cost structure for the borrower while still allowing flexibility in the payment methods for essential upfront costs associated with the loan process.

These fees are capped to prevent excessive costs that could negatively impact the borrower's ability to afford the mortgage or overextend their financial resources. By allowing a percentage of the loan amount plus fixed fees for particular services, it balances borrower needs and lender risk management effectively.

Other suggested options do not align with Fannie Mae's guidelines for acceptable fee structures. While some may imply lower or fixed amounts, they do not take into account the comprehensive nature of the borrower’s expenses involving both regulatory fees and evaluations that must be remitted directly to service providers like appraisers and credit bureaus. This ensures that the lender can evaluate the borrower's credit risk accurately while providing a small degree of financial leniency.