Mortgage Loan Originator (MLO) Licensing Practice Test

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Prepare for the Mortgage Loan Originator (MLO) Licensing Test. Study with flashcards and multiple-choice questions, each with hints and explanations. Get ready to succeed on your exam!

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How many days does a lender have to send the Satisfaction of Mortgage letter after settlement?

30 days
45 days
60 days
90 days

The correct answer is: 60 days

The timeframe in which a lender must send the Satisfaction of Mortgage letter after settlement is 60 days. This requirement ensures that borrowers receive timely notification when their mortgage obligation has been fulfilled and formally cleared. Sending the Satisfaction of Mortgage within this period is important for maintaining proper records, as it helps both the borrower and the local authorities recognize that the mortgage has been satisfied and that the borrower no longer has any legal obligation to the lender for that loan. It aids in avoiding potential issues that might arise if the title is not properly cleared in a reasonable time frame. Options suggesting shorter or longer periods, such as 30, 45, or 90 days, do not comply with the established norms within the mortgage industry that aim to streamline documentation and protect the interests of borrowers. Thus, 60 days stands as the correct duration for this process.