NMLS CERTIFICATION SCRIPT 2026
QUESTIONS WITH SOLUTIONS GRADED A+
◍ Section 35 stands for?triggers?things to remember?.
Answer: Higher Priced LoanAPR > APOR- 1.5% 1st lien- 2.5% jumbo oan-
3.5% subordinate lienrequires escrow account for minimum of 5 years
◍ If you are required to provide ____________________, you must also
provide the partial payment policy.
Answer: mortgage transfer notice
◍ Are there any restrictions on how many days before consummation a revised
Loan Estimate may be provided?.
Answer: - receives revised LE at least 4 business days before
consummation- cannot provide revised LE after providing closing disclosure
◍ Fraud for property:.
Answer: Also called "fraud for housing," this is a willful misrepresentation
of material facts on a loan application with the intent of gaining property.
This type of fraud is more likely to be perpetuated by borrowers and result
in less damage to the creditor(s) involved because the loan is typically paid
in a timely manner.
◍ What if the creditor does not provide anestimate of a particular charge that
islater charged?.
Answer: it's ok as long as sum of all charges is 10% or less
◍ Reverse Mortgage things to know?Loan amount
calculation?eligibility?property types?.
Answer: - no repayment until: last borrower dies, sells, doesn't live in home
for 12 consecutive months- no income requirements- equity decreases, debt
increases- title of home under borrower's nameLoan amount calculation- age
of youngest borrower- current interest rate- lesser of appraised value or max
, lending limitEligibilty - 62+ years- 1st lien- all borrowers must attend
mandatory counseling Property Types- 1-4 unit primary residence-
condominiums - PUD (Planned Unit Development)
◍ Under non-bank activates, RMLOs are required for transactions that involve
aggregates funds or other assets of at least how much, to make a SARs
report?.
Answer: $5000
◍ Identity theft prevention program:.
Answer: A written program designed to detect the warning signs of identity
theft in day-to-day operations. Businesses defined as "financial institutions"
under the Fair and Accurate Credit Transactions Act's Red Flags Rule are
required to implement this kind of program. Because of the broadness of the
definition, all mortgage brokerages and mortgage banks are covered by it.
◍ What are the initial disclosures.
Answer: Home loan tool kit (RESPA), LE(TILA), Mortgage servicing
disclosure(RESPA), List of HUD counselols (RESPA)
◍ Fraud for shelter (property).
Answer: Borrower intends to live in property, but uses false
personal/financial information to get a larger mortgage, but their income
can't support. Usually, within 2 years the homes is foreclosed on because the
criminals can't make payments.
◍ Fair Credit Reporting Act:.
Answer: A federal law regulating the users and use of consumer credit
information. Parts of the law are now implemented and enforced by the
Consumer Financial Protection Bureau, but parts of it remain with the
Federal Trade Commission.
◍ How long should ECOA disclosures be retained?.
Answer: 25 months
◍ 5 rights under FACRA.
Answer: 1. Right to adverse action notice 2. Free copy of credit report 3.
, Request credit score 4. The right to dispute incomplete or inaccurate
information 5. Limit prescreened offers
◍ Which law prohibits making a loan to a customer without verifying the
customer's ability to repay the loan?.
Answer: HOEPA
◍ Mortgage Fraud definitiontypes?.
Answer: any misrepresentation or concealment to obtain a mortgage
loanTypes - Saddle1. Silent second - buyer obtains 2nd mortgage to pay
down payment without telling lender 2. Air loan - non-existent loan3. Deed
Scam - forged seller's signature on deed. Thief mortgages property, cashes
out, and walks away4. Double Sold Loans - borrower signs multiple
applications and LO sends to multiple lenders5. Loan Flipping - refinancing
without benefit to borrower6. Equity Skimming - investor rescues borrower
facing foreclosure and takes title. Investor refinances a loan knowing
borrower cannot repay.
◍ What are the eligibility docs required for VA loans?.
Answer: DD-214 discharge papersCOE
◍ Dodd Frank Act responsibilities?why created? what year?things to know?.
Answer: 5 responsibilities:1. created CFPB to give consumers accurate info
to shop for mortgages. 2. Established QM, verify borrowers have ATR3.
Prohibits unfair lending practices and established penalties for irresponsible
lending.4. Expands protection for Section 32 loans. 5. Housing Counseling-
created as a response to the worst financial crisis since the Great Depression
in 2010- Title X: Consumer Protection Act- Title XIV: Mortgage Reform
and Anti Predatory Lending Act
◍ Wholesale lenders:.
Answer: Entities that purchase and sell loans that have been originated by
third parties. Wholesale lenders may purchase loans with the intent to
package the loans for sale to secondary market investors; or they may
purchase loans in order to service the loans themselves
, ◍ State-licensed loan originator:.
Answer: A loan originator who is licensed by his or her state, registered with
the NMLS-R and isn't employed by entities mentioned in the definition of
"registered loan originator." If you are reading this study guide, you are
likely planning on becoming (or have already become) a state-licensed loan
originator
◍ Hybrid ARM.
Answer: - initial interest rate, then adjusts annually 3/1, 5/1, 7/1, 10/1- have
caps and initial interest discounts
◍ Immediate family member:.
Answer: A spouse, child, sibling, parent, grandparent or grandchild. An
individual who only originates loans with or on behalf of an immediate
family member doesn't need a loan originator license.
◍ TILA- APR Accuracy and re-disclosure.
Answer: 1/8%(.125%)for regular/traditional1/4 (.25%) for
irregular/non-traditional
◍ 3/6 interest rate caps.
Answer: 1st adjustment = initial interest rate + 3% Periodic adjustments =
interest rate + 3% Max lifetime rate = initial interest rate + 6%
◍ What are the 2 exceptions in which a lender does not have to send the initial
disclosures.
Answer: 1. If the borrower withdraws, 2.If lender denies application before
the 3rd business day
◍ RESPA transactions not covered.
Answer: *All cash sale*Sale where the individual seller takes back the
mortgage*Rental property transaction*Property of 25 acres or more*Vacant
or unimproved property (unless a dwelling will be constructed or moved on
within 2 yrs.* Commercial properties*Bridge and construction loans
◍ Undisclosed concessions:.
Answer: Monies related to a purchase transaction passing between buyer
QUESTIONS WITH SOLUTIONS GRADED A+
◍ Section 35 stands for?triggers?things to remember?.
Answer: Higher Priced LoanAPR > APOR- 1.5% 1st lien- 2.5% jumbo oan-
3.5% subordinate lienrequires escrow account for minimum of 5 years
◍ If you are required to provide ____________________, you must also
provide the partial payment policy.
Answer: mortgage transfer notice
◍ Are there any restrictions on how many days before consummation a revised
Loan Estimate may be provided?.
Answer: - receives revised LE at least 4 business days before
consummation- cannot provide revised LE after providing closing disclosure
◍ Fraud for property:.
Answer: Also called "fraud for housing," this is a willful misrepresentation
of material facts on a loan application with the intent of gaining property.
This type of fraud is more likely to be perpetuated by borrowers and result
in less damage to the creditor(s) involved because the loan is typically paid
in a timely manner.
◍ What if the creditor does not provide anestimate of a particular charge that
islater charged?.
Answer: it's ok as long as sum of all charges is 10% or less
◍ Reverse Mortgage things to know?Loan amount
calculation?eligibility?property types?.
Answer: - no repayment until: last borrower dies, sells, doesn't live in home
for 12 consecutive months- no income requirements- equity decreases, debt
increases- title of home under borrower's nameLoan amount calculation- age
of youngest borrower- current interest rate- lesser of appraised value or max
, lending limitEligibilty - 62+ years- 1st lien- all borrowers must attend
mandatory counseling Property Types- 1-4 unit primary residence-
condominiums - PUD (Planned Unit Development)
◍ Under non-bank activates, RMLOs are required for transactions that involve
aggregates funds or other assets of at least how much, to make a SARs
report?.
Answer: $5000
◍ Identity theft prevention program:.
Answer: A written program designed to detect the warning signs of identity
theft in day-to-day operations. Businesses defined as "financial institutions"
under the Fair and Accurate Credit Transactions Act's Red Flags Rule are
required to implement this kind of program. Because of the broadness of the
definition, all mortgage brokerages and mortgage banks are covered by it.
◍ What are the initial disclosures.
Answer: Home loan tool kit (RESPA), LE(TILA), Mortgage servicing
disclosure(RESPA), List of HUD counselols (RESPA)
◍ Fraud for shelter (property).
Answer: Borrower intends to live in property, but uses false
personal/financial information to get a larger mortgage, but their income
can't support. Usually, within 2 years the homes is foreclosed on because the
criminals can't make payments.
◍ Fair Credit Reporting Act:.
Answer: A federal law regulating the users and use of consumer credit
information. Parts of the law are now implemented and enforced by the
Consumer Financial Protection Bureau, but parts of it remain with the
Federal Trade Commission.
◍ How long should ECOA disclosures be retained?.
Answer: 25 months
◍ 5 rights under FACRA.
Answer: 1. Right to adverse action notice 2. Free copy of credit report 3.
, Request credit score 4. The right to dispute incomplete or inaccurate
information 5. Limit prescreened offers
◍ Which law prohibits making a loan to a customer without verifying the
customer's ability to repay the loan?.
Answer: HOEPA
◍ Mortgage Fraud definitiontypes?.
Answer: any misrepresentation or concealment to obtain a mortgage
loanTypes - Saddle1. Silent second - buyer obtains 2nd mortgage to pay
down payment without telling lender 2. Air loan - non-existent loan3. Deed
Scam - forged seller's signature on deed. Thief mortgages property, cashes
out, and walks away4. Double Sold Loans - borrower signs multiple
applications and LO sends to multiple lenders5. Loan Flipping - refinancing
without benefit to borrower6. Equity Skimming - investor rescues borrower
facing foreclosure and takes title. Investor refinances a loan knowing
borrower cannot repay.
◍ What are the eligibility docs required for VA loans?.
Answer: DD-214 discharge papersCOE
◍ Dodd Frank Act responsibilities?why created? what year?things to know?.
Answer: 5 responsibilities:1. created CFPB to give consumers accurate info
to shop for mortgages. 2. Established QM, verify borrowers have ATR3.
Prohibits unfair lending practices and established penalties for irresponsible
lending.4. Expands protection for Section 32 loans. 5. Housing Counseling-
created as a response to the worst financial crisis since the Great Depression
in 2010- Title X: Consumer Protection Act- Title XIV: Mortgage Reform
and Anti Predatory Lending Act
◍ Wholesale lenders:.
Answer: Entities that purchase and sell loans that have been originated by
third parties. Wholesale lenders may purchase loans with the intent to
package the loans for sale to secondary market investors; or they may
purchase loans in order to service the loans themselves
, ◍ State-licensed loan originator:.
Answer: A loan originator who is licensed by his or her state, registered with
the NMLS-R and isn't employed by entities mentioned in the definition of
"registered loan originator." If you are reading this study guide, you are
likely planning on becoming (or have already become) a state-licensed loan
originator
◍ Hybrid ARM.
Answer: - initial interest rate, then adjusts annually 3/1, 5/1, 7/1, 10/1- have
caps and initial interest discounts
◍ Immediate family member:.
Answer: A spouse, child, sibling, parent, grandparent or grandchild. An
individual who only originates loans with or on behalf of an immediate
family member doesn't need a loan originator license.
◍ TILA- APR Accuracy and re-disclosure.
Answer: 1/8%(.125%)for regular/traditional1/4 (.25%) for
irregular/non-traditional
◍ 3/6 interest rate caps.
Answer: 1st adjustment = initial interest rate + 3% Periodic adjustments =
interest rate + 3% Max lifetime rate = initial interest rate + 6%
◍ What are the 2 exceptions in which a lender does not have to send the initial
disclosures.
Answer: 1. If the borrower withdraws, 2.If lender denies application before
the 3rd business day
◍ RESPA transactions not covered.
Answer: *All cash sale*Sale where the individual seller takes back the
mortgage*Rental property transaction*Property of 25 acres or more*Vacant
or unimproved property (unless a dwelling will be constructed or moved on
within 2 yrs.* Commercial properties*Bridge and construction loans
◍ Undisclosed concessions:.
Answer: Monies related to a purchase transaction passing between buyer
