NMLS final exam Questions and Answers all
100% Correct| Latest update 2024-2025
If a lender wants to obtain copies of a borrower's tax returns, the borrower is asked to
sign what?
A. 4506-T
B. A waiver of financial information
C. 1003
D. 1040 - ✔✔A. 4506-T
An increase in fees and issuance of a revised Loan Estimate to reflect the new amounts
is permitted in which of the following cases?
A. The creditor failed to provide an accurate estimate of transfer taxes and wants to
issue a revised Loan Estimate showing actual costs
B. The consumer is not allowed to shop for flood zone determination services and the
actual costs are more than the estimated costs
C. The title company affiliated with the lender decides to charge more for its services
than initially disclosed
D. The consumer has failed to respond to a loan officer within ten business days and the
lending terms have changed - ✔✔D. The consumer has failed to respond to a loan
officer within ten business days and the lending terms have changed
All of the following are true of FHA fixed-rate loans, except:
A. They require upfront MIP on all loans
B. They are available in 15- and 30-year terms
C. The borrower is only required to carry MIP until the LTV reaches 78%
,D. The borrower must make at least a 3.50% investment - ✔✔C. The borrower is only
required to carry MIP until the LTV reaches 78%
Previously used as compensation for mortgage professionals, yield spread premiums
must now be used:
A.As referral fees paid to the broker by a settlement service provider
B. As credits to the borrower to help pay settlement costs
C. As commissions paid in addition to mortgage broker compensation
D. As credits off of the interest rate of the loan - ✔✔B. As credits to the borrower to
help pay settlement costs
On which portion of the loan application would one find a street address and legal
description of the property?
A. Section X
B. Section II
C. Section XV
D. Section III - ✔✔B. Section II
Which of the following best describes the legal consequences of providing an inflated
description of income on a loan application?
A. It is not an illegal act, but may impact the consumer's credit score
B. It is a violation of multiple federal lending laws and constitutes fraud
C. It is not a violation of criminal laws, and any penalties imposed are civil, not criminal
D. It is not illegal if the applicant inflates his or her income to secure approval for the
loan but fully intends to repay the obligation - ✔✔B. It is a violation of multiple
federal lending laws and constitutes fraud
Which of the following is permitted as a result of a referral?
,A. A free monthly pass to the gym with each closing
B. A well-written thank you note
C. A coffee card for each client
D. The names, phone numbers, and annual incomes of clients who have applied for
loans - ✔✔B. A well-written thank you note
What agency ensures that GSEs are using sound financial practices and have adequate
capital to engage in the mortgage business?
A. The Federal Housing Finance Agency
B. The Department of Housing and Urban Development
C. The Office of the Comptroller of the Treasury
D. The Office of Federal Housing Enterprise Oversight - ✔✔A. The Federal Housing
Finance Agency
What is the maximum fee that may be charged for preparation of the Closing
Disclosure?
A. $50
B. .1% of the loan amount
C. $0
D. 1% of the loan amount - ✔✔C) $0
Don is refinancing his home in order to save money. If the loan goes through, his
payment will drop from $2,000 per month (PITI) to $1,500 per month (PITI). Don's gross
income each month is $6,800, but he has a $300 car payment, a $150 credit card
payment, and monthly alimony payments of $1,300. What is Don's housing ratio on the
proposed loan?
A.29%
B.31%
, C.48%
D. 22% - ✔✔D) 22%
In this case, his proposed housing expense (PITI) will be $1,500/month. $1,500 / $6,800
= 22%
Mishandling borrowers' funds or improperly managing their funds is a practice
prohibited by:
A. TILA
B. FNMA
C. RESPA
D. GLB - ✔✔C. RESPA
When a loan is characterized as "conforming," it means the loan:
A. Requires no PMI
B. Meets guidelines established by Fannie Mae and Freddie Mac
C. Meets standards for a government program
D. Is a 30-year fixe - ✔✔B. Meets guidelines established by Fannie Mae and Freddie
Mac
A buyer pays $200,000 for a home and gets a fixed-rate loan from his lender at 5.75%.
He puts $40,000 down. What is the LTV on this loan, and does the buyer have to pay
PMI?
A. 80% and YES
B. 90% and YES
C. Unknown - need to know the term of the loan to determine
100% Correct| Latest update 2024-2025
If a lender wants to obtain copies of a borrower's tax returns, the borrower is asked to
sign what?
A. 4506-T
B. A waiver of financial information
C. 1003
D. 1040 - ✔✔A. 4506-T
An increase in fees and issuance of a revised Loan Estimate to reflect the new amounts
is permitted in which of the following cases?
A. The creditor failed to provide an accurate estimate of transfer taxes and wants to
issue a revised Loan Estimate showing actual costs
B. The consumer is not allowed to shop for flood zone determination services and the
actual costs are more than the estimated costs
C. The title company affiliated with the lender decides to charge more for its services
than initially disclosed
D. The consumer has failed to respond to a loan officer within ten business days and the
lending terms have changed - ✔✔D. The consumer has failed to respond to a loan
officer within ten business days and the lending terms have changed
All of the following are true of FHA fixed-rate loans, except:
A. They require upfront MIP on all loans
B. They are available in 15- and 30-year terms
C. The borrower is only required to carry MIP until the LTV reaches 78%
,D. The borrower must make at least a 3.50% investment - ✔✔C. The borrower is only
required to carry MIP until the LTV reaches 78%
Previously used as compensation for mortgage professionals, yield spread premiums
must now be used:
A.As referral fees paid to the broker by a settlement service provider
B. As credits to the borrower to help pay settlement costs
C. As commissions paid in addition to mortgage broker compensation
D. As credits off of the interest rate of the loan - ✔✔B. As credits to the borrower to
help pay settlement costs
On which portion of the loan application would one find a street address and legal
description of the property?
A. Section X
B. Section II
C. Section XV
D. Section III - ✔✔B. Section II
Which of the following best describes the legal consequences of providing an inflated
description of income on a loan application?
A. It is not an illegal act, but may impact the consumer's credit score
B. It is a violation of multiple federal lending laws and constitutes fraud
C. It is not a violation of criminal laws, and any penalties imposed are civil, not criminal
D. It is not illegal if the applicant inflates his or her income to secure approval for the
loan but fully intends to repay the obligation - ✔✔B. It is a violation of multiple
federal lending laws and constitutes fraud
Which of the following is permitted as a result of a referral?
,A. A free monthly pass to the gym with each closing
B. A well-written thank you note
C. A coffee card for each client
D. The names, phone numbers, and annual incomes of clients who have applied for
loans - ✔✔B. A well-written thank you note
What agency ensures that GSEs are using sound financial practices and have adequate
capital to engage in the mortgage business?
A. The Federal Housing Finance Agency
B. The Department of Housing and Urban Development
C. The Office of the Comptroller of the Treasury
D. The Office of Federal Housing Enterprise Oversight - ✔✔A. The Federal Housing
Finance Agency
What is the maximum fee that may be charged for preparation of the Closing
Disclosure?
A. $50
B. .1% of the loan amount
C. $0
D. 1% of the loan amount - ✔✔C) $0
Don is refinancing his home in order to save money. If the loan goes through, his
payment will drop from $2,000 per month (PITI) to $1,500 per month (PITI). Don's gross
income each month is $6,800, but he has a $300 car payment, a $150 credit card
payment, and monthly alimony payments of $1,300. What is Don's housing ratio on the
proposed loan?
A.29%
B.31%
, C.48%
D. 22% - ✔✔D) 22%
In this case, his proposed housing expense (PITI) will be $1,500/month. $1,500 / $6,800
= 22%
Mishandling borrowers' funds or improperly managing their funds is a practice
prohibited by:
A. TILA
B. FNMA
C. RESPA
D. GLB - ✔✔C. RESPA
When a loan is characterized as "conforming," it means the loan:
A. Requires no PMI
B. Meets guidelines established by Fannie Mae and Freddie Mac
C. Meets standards for a government program
D. Is a 30-year fixe - ✔✔B. Meets guidelines established by Fannie Mae and Freddie
Mac
A buyer pays $200,000 for a home and gets a fixed-rate loan from his lender at 5.75%.
He puts $40,000 down. What is the LTV on this loan, and does the buyer have to pay
PMI?
A. 80% and YES
B. 90% and YES
C. Unknown - need to know the term of the loan to determine
