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For board oversight of an IMB's interest-rate risk, the most relevant metric is typically:
A
B
C
D
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2026 Statistics
Key Facts: MBA Executive CMB Exam
10 yrs
Executive Experience
MBA Requirement
$2,500
Total Program Cost
MBA
1 hour
Oral Panel Duration
After written
6%
Ginnie TNW/Assets Ratio
APM 22-09
35 bps
FHFA Net Worth × UPB
Plus $2.5M floor
$806,500
2026 Conforming Limit
FHFA
MBA's Executive Certified Mortgage Banker designation is the senior-executive track to the CMB, requiring 10 years of executive-level experience plus the same online written exam and 1-hour oral panel before existing CMB designees. Total cost is $2,500. The body of knowledge extends beyond standard CMB to cover corporate strategy, M&A, MSR economics, GSE/Ginnie capital frameworks, CFPB supervisory exam management, Basel III, GLBA Safeguards Rule, AI/algorithmic bias governance, and public-policy advocacy. Our 100 free practice questions cover the strategic and governance knowledge body.
Sample MBA Executive CMB Practice Questions
Try these sample questions to test your MBA Executive CMB exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.
1For an independent mortgage bank, the primary source of regulatory capital risk on the balance sheet is most often:
A.Mortgage Servicing Rights (MSRs) volatility
B.Cash and equivalents
C.Reverse repurchase agreements
D.Customer deposits
Explanation: MSRs are the dominant non-cash asset for many IMBs. Their fair value is highly sensitive to interest rates (prepayment speeds) and represents both a capital and a hedge management challenge. Counterparty warehouse haircuts and operational risk also matter, but MSR volatility is the headline capital-markets risk.
2FHFA's 2022-revised eligibility framework for Fannie/Freddie seller-servicers requires which minimum net worth for an IMB?
A.$2.5M plus 0.35% of UPB serviced
B.$1M flat
C.$25M flat
D.Equal to total servicing rights at fair value
Explanation: Under the GSE eligibility framework (effective Q3 2024 for IMBs), minimum net worth is $2.5 million plus 35 basis points of agency UPB serviced. Capital ratio must be at least 6% (TNW/total assets), and liquidity is 3.5 bps of agency UPB plus incremental for non-performing.
3In a typical mortgage M&A transaction, the 'MSR portfolio' is most commonly valued using:
A.Discounted cash flow model with prepayment speed and discount rate assumptions
B.Book value
C.Replacement cost
D.Comparable sales of branches
Explanation: MSR valuations rely on a DCF: project servicing fee income, ancillary income, float, costs, and prepayment-driven runoff. Key sensitivities are PSA prepayment vector, discount rate (often risk-free + spread), and recapture assumptions. M&A multiples are typically a multiple of expected gross servicing fee.
4Under Dodd-Frank, the CFPB's supervisory exam authority over a non-bank mortgage company is exercised through:
A.CFPB-led supervisory exams, often coordinated with state regulators through SES
B.FDIC exams
C.OCC exams
D.Self-attestation only
Explanation: The CFPB conducts supervisory exams on non-bank mortgage originators and servicers under 12 USC 5514, often coordinating with state regulators via CSBS's State Examination System (SES). Banks above $10B are also CFPB-supervised for consumer compliance.
5In strategic planning for a mortgage banker, 'gain on sale margin compression' is best addressed by:
A.Diversifying channels, optimizing cost-to-originate, and adding non-rate-sensitive products
B.Increasing volume at any cost
C.Eliminating servicing
D.Exiting the warehouse line
Explanation: Margin compression results from competitive pricing and rate volatility. Executive responses include channel diversification (retail/wholesale/correspondent), tight cost-to-originate management, productivity per FTE, ancillary income (servicing retention, recapture), and product mix (purchase, niche, non-QM).
6A 'recapture rate' on a mortgage banker's servicing portfolio measures:
A.Percentage of paid-off loans that the servicer refinances back into its origination pipeline
B.Rate of foreclosure recovery
C.Hedge cost recovery
D.Tax recapture on bond loans
Explanation: Recapture rate = (servicing-retained loans refinanced by the same lender ÷ total loans that refinanced) × 100. High recapture protects MSR value because the lender recovers the customer rather than losing them. CMB executives drive recapture programs as core MSR economics.
7For board oversight of an IMB's interest-rate risk, the most relevant metric is typically:
A.Net pipeline duration after hedges (in months) versus risk tolerance
B.Net income
C.Loan officer headcount
D.Number of branches
Explanation: Boards typically review hedged pipeline duration, MSR sensitivity (DV01), and stressed loss scenarios. The hedged-pipeline duration after considering pull-through forecasts indicates how much P&L is exposed to a 25 bp move. CFOs report this to risk committees regularly.
8Under SEC Rule 17g-7 (rating-agency disclosures for ABS/RMBS), an issuer of private-label RMBS must:
A.Disclose representations and warranties in the offering documents along with rating-agency disclosures
B.Use only one rating agency
C.Avoid all reps and warrants
D.Skip prospectus filing
Explanation: SEC Rule 17g-7 requires NRSROs and issuers to disclose reps and warranties of an asset-backed transaction. Combined with Reg AB II disclosures, this drives transparency for RMBS investors. Executives building private-label issuance programs must architect rep-and-warrant frameworks.
9A mortgage banker's 'liquidity stress test' at the executive level should consider:
A.MSR margin calls, warehouse curtailment, repurchase demands, and operating cash burn under rate-shock scenarios
B.Only operating cash needs
C.Just MSR sale proceeds
D.Only quarterly billings
Explanation: Executive-level liquidity stress modeling includes MSR hedge counterparty margin calls (large in extreme moves), warehouse haircuts and aging penalties, GSE repurchase demands, P&I advance obligations on delinquent loans, plus normal operating cash. The Ginnie Mae issuer liquidity rule explicitly requires this.
10In Ginnie Mae's revised Issuer Capital and Liquidity Framework (effective 2024-2025), what minimum capital ratio is required for non-depository issuers?
A.6% Total Net Worth / Total Assets and risk-based capital approach
B.2% TNW
C.1% Total Equity
D.Same as GSE seller-servicers (no separate framework)
Explanation: Ginnie Mae's APM 22-09 framework (effective 2024 with risk-based capital phase-in to 2024+) requires non-depository issuers to maintain TNW/Total Assets ≥ 6% and meet a risk-based capital ratio incorporating MSR risk weighting. This is more conservative than the prior framework.
About the MBA Executive CMB Practice Questions
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