Mortgage Loan Originator (MLO) Licensing Practice Test

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Prepare for the Mortgage Loan Originator Licensing Test. Utilize diverse question formats, including flashcards and multiple choice, with detailed explanations. Gear up for your MLO exam with comprehensive study material!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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How many days are lenders required to send an Adverse Action notice?

15 days
30 days
45 days
60 days

The correct answer is: 30 days

Lenders are required to send an Adverse Action notice within 30 days following the action taken with respect to a credit application. This requirement is mandated by the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA). The purpose of the Adverse Action notice is to inform applicants when their credit has been denied or when they receive less favorable terms. This notice must provide specific details, including the reasons for the adverse action, information about the credit reporting agency if a credit report was used, and the applicant's rights to dispute the findings. By ensuring that lenders provide this notice within a 30-day timeframe, the regulations support transparency and ensure that consumers are informed about decisions that affect their credit applications.