NMLS PRACTICE EXAM 2026/2027
QUESTIONS AND ANSWERS
1. Under the SAFE Act, which of the following is considered a non-traditional mortgage
product?
A. A 30-year fixed-rate mortgage
B. A reverse mortgage
C. A 15-year fixed-rate mortgage
D. Any mortgage product other than a 30-year fixed-rate mortgage
Answer: D
Conceptual Explanation: The SAFE Act defines a non-traditional mortgage product as any
mortgage product other than a 30-year fixed-rate mortgage.
2. According to the Truth in Lending Act (TILA), which of the following is included in the
Finance Charge?
A. Title insurance fees
B. Appraisal fees
C. Mortgage broker fees
,D. Seller’s points
Answer: C
Conceptual Explanation: Finance charges generally include interest, loan origination fees,
and mortgage broker fees. Fees for services like appraisals and title insurance are typically
excluded if they are bona fide and reasonable.
3. Which regulation prohibits a lender from discouraging a qualified applicant from applying
for a loan based on their race or national origin?
A. Regulation X (RESPA)
B. Regulation B (ECOA)
C. Regulation Z (TILA)
D. Regulation C (HMDA)
Answer: B
Conceptual Explanation: The Equal Credit Opportunity Act (ECOA), implemented by
Regulation B, prohibits discrimination in credit transactions based on protected classes.
4. A borrower has a gross monthly income of $5,000. Their housing expense is $1,200 and
they have other monthly debts totaling $600. What is their total Debt-to-Income (DTI) ratio?
A. 36%
B. 12%
C. 24%
, D. 42%
Answer: A
Conceptual Explanation: Total DTI is calculated as ($1,200 + $600) / $5,000 = $1,800 /
$5,000 = 0.36 or 36%.
5. Under RESPA Section 8, what is the maximum penalty for providing a kickback for a
referral?
A. $10,000 and 1 year in prison
B. $5,000 and 6 months in prison
C. $25,000 and 2 years in prison
D. $50,000 and 5 years in prison
Answer: A
Conceptual Explanation: Violations of RESPA Section 8 (anti-kickback) can result in fines
up to $10,000 and imprisonment for up to one year per violation.
6. Which of the following is a primary objective of the Home Mortgage Disclosure Act
(HMDA)?
A. To help identify possible discriminatory lending patterns
B. To ensure lenders provide accurate APR disclosures
C. To limit the amount of closing costs charged to borrowers
D. To protect consumer privacy from third-party marketers
QUESTIONS AND ANSWERS
1. Under the SAFE Act, which of the following is considered a non-traditional mortgage
product?
A. A 30-year fixed-rate mortgage
B. A reverse mortgage
C. A 15-year fixed-rate mortgage
D. Any mortgage product other than a 30-year fixed-rate mortgage
Answer: D
Conceptual Explanation: The SAFE Act defines a non-traditional mortgage product as any
mortgage product other than a 30-year fixed-rate mortgage.
2. According to the Truth in Lending Act (TILA), which of the following is included in the
Finance Charge?
A. Title insurance fees
B. Appraisal fees
C. Mortgage broker fees
,D. Seller’s points
Answer: C
Conceptual Explanation: Finance charges generally include interest, loan origination fees,
and mortgage broker fees. Fees for services like appraisals and title insurance are typically
excluded if they are bona fide and reasonable.
3. Which regulation prohibits a lender from discouraging a qualified applicant from applying
for a loan based on their race or national origin?
A. Regulation X (RESPA)
B. Regulation B (ECOA)
C. Regulation Z (TILA)
D. Regulation C (HMDA)
Answer: B
Conceptual Explanation: The Equal Credit Opportunity Act (ECOA), implemented by
Regulation B, prohibits discrimination in credit transactions based on protected classes.
4. A borrower has a gross monthly income of $5,000. Their housing expense is $1,200 and
they have other monthly debts totaling $600. What is their total Debt-to-Income (DTI) ratio?
A. 36%
B. 12%
C. 24%
, D. 42%
Answer: A
Conceptual Explanation: Total DTI is calculated as ($1,200 + $600) / $5,000 = $1,800 /
$5,000 = 0.36 or 36%.
5. Under RESPA Section 8, what is the maximum penalty for providing a kickback for a
referral?
A. $10,000 and 1 year in prison
B. $5,000 and 6 months in prison
C. $25,000 and 2 years in prison
D. $50,000 and 5 years in prison
Answer: A
Conceptual Explanation: Violations of RESPA Section 8 (anti-kickback) can result in fines
up to $10,000 and imprisonment for up to one year per violation.
6. Which of the following is a primary objective of the Home Mortgage Disclosure Act
(HMDA)?
A. To help identify possible discriminatory lending patterns
B. To ensure lenders provide accurate APR disclosures
C. To limit the amount of closing costs charged to borrowers
D. To protect consumer privacy from third-party marketers
