NMLS TEST PREP
Which of the following would not be a prohibited practice regarding an appraisal? - Answer: It is
allowable to request that an appraiser looks at additional information or additional comparables
with the hope that the appraiser might raise the value of the property. What is not acceptable is
threatening, bribing or coercing an appraiser to raise a property value
Fair Lending, Fair Housing and ECOA - Answer: Any person wanting to apply for a mortgage,
must be allowed to do so, unless they are under 18.
Truth in Lending (TILA) and Reg Z - Answer: 1) MDIA - Mortgage Disclosure Improvement Act 2)
Advertising 3) HOEPA 4) Loan Estimate 5) Annual Percentage Rate (APR) 6) Qualified Mortgage
(QM) 7) Loan Officer Compensation 8) CHARM Booklet
RESPA - Answer: Real Estate Settlement Procedures Act
Reverse Mortgage - Answer: a) Negative Amortization - mortgage balance goes up every month
because the interest is not paid (no mortgage payments) b) No Escrows, the borrower is
responsible to pay their own taxes and insurance c) Minimum age 62 d) Mandatory counseling
before they can apply e) Non-Recourse Mortgage - if the mortgage balance is higher than the
value a the end of the loan. FHA absorbs the loss.
USDA (United States Department of Agriculture) - Answer: a) in areas of less than 35,000 people
b) 100% financing. Income limitations to be eligible
c) 29/41 Underwriting ratios
d) MIP - Government mortgage insurance is required for the life of the loan.
e) USDA must underwrite and fund all loans
FHA (Federal Housing Administration) - Answer: a) maximum LTV is 96.5
b) 31/43 underwriting ratios
c) MIP is required for the life of the loan if over 90% LTV
, NMLS TEST PREP
d) seller concessions is limited to 6%
HELOC - Home Equity Line of Credit - Answer: a) term is usually 8-10 years
b) floating interest rate
c) no principal payment required unless the borrower chooses to or at the end of the loan
d) Borrower does not pay interest on the land unless hey draw part of the proceeds. Then each
month they will pay interest on the balance they have drawn
Application or the 1003 - Answer: Uniform Residential Loan Application (URLA)
Seller Concessions - Answer: may include title insurance, origination fees, processing fees, etc.
PMI (Private Mortgage Insurance) - Answer: required on all conventional/conforming loans
when the down payment is less than 20% or if the loan has an LTV of 80 percent or higher
FHA (Federal Housing Administration) - Answer: loans insured by the Department of Housing
and Urban Development (HUD) FHA are generally easier to obtains as their underwriting
guidelines are more lenient than conventional guidelines.
CAIVRS (Credit Alert Verification Reporting System) - Answer: a underwriter will use this system
to determine whether a borrower has ever failed to repay debts or obligations
FHA Streamline - Answer: Refinance product. Borrowers with current FHA mortgages would like
to reduce their mortgage insurance, interest rate or payment. Require less documentation and
underwriting and may not need an appraisal.
Regulatory Authority - Answer: can't issue a license
, NMLS TEST PREP
The Regulatory Authority may impose penalties for each violation up to, and not exceeding: -
Answer: $25,000
Who determines continuing education requirements and dates for license renewal? - Answer:
The state Regulatory Authority as established under the SAFE Act
Surety bonds must be maintained by: - Answer: All licensees, unless excluded by the Regulatory
Authority.
The Nationwide Multistate Licensing System and Registry is developed and maintained by which
of the following: - Answer: The Conference of State Bank Supervisors and The American
Association of Residential Mortgage Regulators
After failing three (3) exams, an applicant must wait how long before taking the exam again -
Answer: 6 months
(HECM) - Answer: Home Equity Conversion Mortgage
S.A.F.E. is the short title for what Mortgage Licensing act of 2008? - Answer: Secure and Fair
Enforcement
Consumer Financial Protection Bureau - Answer: CFPB (Regulation G)
Regulatory Authority may appoint an examiner to work on behalf of the Regulator in making
examinations of loan originator operations - Answer: Examiners may administer oaths and
affirmations, make examinations and examination reports.
A State-licensed loan originator who fails to maintain a valid license for a period of___________
or longer shall retake the test. - Answer: 5 years
Which of the following would not be a prohibited practice regarding an appraisal? - Answer: It is
allowable to request that an appraiser looks at additional information or additional comparables
with the hope that the appraiser might raise the value of the property. What is not acceptable is
threatening, bribing or coercing an appraiser to raise a property value
Fair Lending, Fair Housing and ECOA - Answer: Any person wanting to apply for a mortgage,
must be allowed to do so, unless they are under 18.
Truth in Lending (TILA) and Reg Z - Answer: 1) MDIA - Mortgage Disclosure Improvement Act 2)
Advertising 3) HOEPA 4) Loan Estimate 5) Annual Percentage Rate (APR) 6) Qualified Mortgage
(QM) 7) Loan Officer Compensation 8) CHARM Booklet
RESPA - Answer: Real Estate Settlement Procedures Act
Reverse Mortgage - Answer: a) Negative Amortization - mortgage balance goes up every month
because the interest is not paid (no mortgage payments) b) No Escrows, the borrower is
responsible to pay their own taxes and insurance c) Minimum age 62 d) Mandatory counseling
before they can apply e) Non-Recourse Mortgage - if the mortgage balance is higher than the
value a the end of the loan. FHA absorbs the loss.
USDA (United States Department of Agriculture) - Answer: a) in areas of less than 35,000 people
b) 100% financing. Income limitations to be eligible
c) 29/41 Underwriting ratios
d) MIP - Government mortgage insurance is required for the life of the loan.
e) USDA must underwrite and fund all loans
FHA (Federal Housing Administration) - Answer: a) maximum LTV is 96.5
b) 31/43 underwriting ratios
c) MIP is required for the life of the loan if over 90% LTV
, NMLS TEST PREP
d) seller concessions is limited to 6%
HELOC - Home Equity Line of Credit - Answer: a) term is usually 8-10 years
b) floating interest rate
c) no principal payment required unless the borrower chooses to or at the end of the loan
d) Borrower does not pay interest on the land unless hey draw part of the proceeds. Then each
month they will pay interest on the balance they have drawn
Application or the 1003 - Answer: Uniform Residential Loan Application (URLA)
Seller Concessions - Answer: may include title insurance, origination fees, processing fees, etc.
PMI (Private Mortgage Insurance) - Answer: required on all conventional/conforming loans
when the down payment is less than 20% or if the loan has an LTV of 80 percent or higher
FHA (Federal Housing Administration) - Answer: loans insured by the Department of Housing
and Urban Development (HUD) FHA are generally easier to obtains as their underwriting
guidelines are more lenient than conventional guidelines.
CAIVRS (Credit Alert Verification Reporting System) - Answer: a underwriter will use this system
to determine whether a borrower has ever failed to repay debts or obligations
FHA Streamline - Answer: Refinance product. Borrowers with current FHA mortgages would like
to reduce their mortgage insurance, interest rate or payment. Require less documentation and
underwriting and may not need an appraisal.
Regulatory Authority - Answer: can't issue a license
, NMLS TEST PREP
The Regulatory Authority may impose penalties for each violation up to, and not exceeding: -
Answer: $25,000
Who determines continuing education requirements and dates for license renewal? - Answer:
The state Regulatory Authority as established under the SAFE Act
Surety bonds must be maintained by: - Answer: All licensees, unless excluded by the Regulatory
Authority.
The Nationwide Multistate Licensing System and Registry is developed and maintained by which
of the following: - Answer: The Conference of State Bank Supervisors and The American
Association of Residential Mortgage Regulators
After failing three (3) exams, an applicant must wait how long before taking the exam again -
Answer: 6 months
(HECM) - Answer: Home Equity Conversion Mortgage
S.A.F.E. is the short title for what Mortgage Licensing act of 2008? - Answer: Secure and Fair
Enforcement
Consumer Financial Protection Bureau - Answer: CFPB (Regulation G)
Regulatory Authority may appoint an examiner to work on behalf of the Regulator in making
examinations of loan originator operations - Answer: Examiners may administer oaths and
affirmations, make examinations and examination reports.
A State-licensed loan originator who fails to maintain a valid license for a period of___________
or longer shall retake the test. - Answer: 5 years
