Module 1 NMLS exam questions and answers
2024\2025 Grade A+
What are the penalties for violation of RESPA/Section 8
- correct answer Section 8 of RESPA prohibits referral fees and other forms of kickbacks/fee splitting.
Penalties include fines of up to 10,000 and up to one year in prison
Disclosures due within three business days of loan application
- correct answer Loan Estimate
Your Home Loan Toolkit: A Step By Step Guide
CHARM Booklet
Variable-rate program disclosures
Home equity plan disclosures
Notice of Right to Receive an Appraisal Report
What can result in a 1,000,000 fine and 30 years in prison?
- correct answer Acts of mortgage fraud
Definition of the term "creditor"
- correct answer The Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act (FCRA), and the
Fair and Accurate Credit Transactions Act (FACTA) all use the same definition for creditor. A creditor is
any person who regulary extends, renews, or continues credit. Loan originators, lenders, and other
mortgage progessionals are included in this definition.
Transactions reported under HMDA..
- correct answer Purchases
Refinances
Home improvement loans
Pre-qualifications must also be reported, along with their disposition
, When a borrowers LTV reaches 80%...
- correct answer He/she is permitted to request discontinuation of PMI. The Homeowners Protection
Act sets the requirements for discontinuation of PMI. It is at the lenders discretion to permit
discontinuation - the borrower must be current on payments
An initial privacy notice is due..
- correct answer At the time that a customer relationship is established. the Gramm-Leach Bliley Act
requires financial institution (including mortgage brokers) to provide and intial privacy notice " not later
than when you establish a customer relationship..." The initial privacy notice should also be
accompanied by the opt-out noitce
HMDA requires loan originators to...
- correct answer Request information on and applicants race, ethnicity, and sex. The applicant may
decline to answer, in which case the loan originator must make a best guess based on visual
observation. This information is necessary to meet the reporting requirements of HMDA
A permissible purpose is required...
- correct answer When obtaining a credit report. Under FCRA, lenders and mortgage progessionals must
provide the consumer reporting agency with a certification of permissible purpose in order to pull credit.
Loan qualification is considered a permissible purpose.
The Gramm-Leach Bliley Act does not protect...
- correct answer Publicly-available information. This includes information that can be found in
government real estate records, information available from the phonebook, and information included
on a public unrestricted website.
The loan estimate must be provide...
- correct answer No later than 3 business days after receiving a completed application.
No later than 7 business days prior to consummation
The Closing Disclosure must be provided...
- correct answer At least three business days prior to consummation
Exemptions under ECOA
- correct answer Although ECOA prohibits inquires about protected personal characteristics, mortgage
professional are permitted to ask HMDA questions. Inquires about protected characteristics may also be
2024\2025 Grade A+
What are the penalties for violation of RESPA/Section 8
- correct answer Section 8 of RESPA prohibits referral fees and other forms of kickbacks/fee splitting.
Penalties include fines of up to 10,000 and up to one year in prison
Disclosures due within three business days of loan application
- correct answer Loan Estimate
Your Home Loan Toolkit: A Step By Step Guide
CHARM Booklet
Variable-rate program disclosures
Home equity plan disclosures
Notice of Right to Receive an Appraisal Report
What can result in a 1,000,000 fine and 30 years in prison?
- correct answer Acts of mortgage fraud
Definition of the term "creditor"
- correct answer The Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act (FCRA), and the
Fair and Accurate Credit Transactions Act (FACTA) all use the same definition for creditor. A creditor is
any person who regulary extends, renews, or continues credit. Loan originators, lenders, and other
mortgage progessionals are included in this definition.
Transactions reported under HMDA..
- correct answer Purchases
Refinances
Home improvement loans
Pre-qualifications must also be reported, along with their disposition
, When a borrowers LTV reaches 80%...
- correct answer He/she is permitted to request discontinuation of PMI. The Homeowners Protection
Act sets the requirements for discontinuation of PMI. It is at the lenders discretion to permit
discontinuation - the borrower must be current on payments
An initial privacy notice is due..
- correct answer At the time that a customer relationship is established. the Gramm-Leach Bliley Act
requires financial institution (including mortgage brokers) to provide and intial privacy notice " not later
than when you establish a customer relationship..." The initial privacy notice should also be
accompanied by the opt-out noitce
HMDA requires loan originators to...
- correct answer Request information on and applicants race, ethnicity, and sex. The applicant may
decline to answer, in which case the loan originator must make a best guess based on visual
observation. This information is necessary to meet the reporting requirements of HMDA
A permissible purpose is required...
- correct answer When obtaining a credit report. Under FCRA, lenders and mortgage progessionals must
provide the consumer reporting agency with a certification of permissible purpose in order to pull credit.
Loan qualification is considered a permissible purpose.
The Gramm-Leach Bliley Act does not protect...
- correct answer Publicly-available information. This includes information that can be found in
government real estate records, information available from the phonebook, and information included
on a public unrestricted website.
The loan estimate must be provide...
- correct answer No later than 3 business days after receiving a completed application.
No later than 7 business days prior to consummation
The Closing Disclosure must be provided...
- correct answer At least three business days prior to consummation
Exemptions under ECOA
- correct answer Although ECOA prohibits inquires about protected personal characteristics, mortgage
professional are permitted to ask HMDA questions. Inquires about protected characteristics may also be
