NMLS Practice Exam Questions and Answers With Verified Solutions 2025
RESP does not apply to:
a) Loans secured by a lien on a principal dwelling
b) Federally related mortgage loans
c) Subprime mortgage loans
d) Loans for business, commercial and agricultural purposes - ✔✔d) Loans for business, commercial and
agricultural purposes
Under the Fair Credit Reporting Act, which of the following entities has the burden of protecting a
consumer's privacy when his/her credit information is being reported?
a) Credit reporting agency
b) HUD
c) Mortgage broker
d) The consumer - ✔✔a) Credit reporting agency
An annual escrow analysis is used to do which of the following?
a) Report underwriting errors
b) Ensure the loan is properly amortized
c) Reduce burden on the servicer
d) Prevent escrow overages - ✔✔d) Prevent escrow overages
If a mortgage professional advertises a loan product at "7.25% APR for the first six months! After six
months, APR is 10.5%, subject to increase based on market conditions," What if any additional
disclosures does TILA require?
a) No other information is required
,b) The finance charges for the loan
c) The monthly payment for the loan
d) The APR in effect after the introductory rate expires - ✔✔a) No other information is required
There is a ________ accuracy tolerance for amounts stated on the Loan Estimate and the actual closing
cost if the consumer is allowed to shop for his/her own settlement service provider.
a) 5% c) 10%
B) 15% d) 0% - ✔✔c) 10%
The USA PATRIOT Act is a federal law that Congress adopted in response to:
a) The need to revitalize the economy in 2008
b) The meltdown of the mortgage lending market in 2007
c) The terrorist attacks on September 11, 2001
d) The need to make HAMP loans available to more Americans - ✔✔c) The terrorist attacks on
September 11, 2001
What federal statute primarily serves to control the settlement costs of residential mortgage loans?
a) TILA b) ECOA
c) RESPA d) HMDA - ✔✔c) RESPA
The disclosure requirements of RESPA would apply to which of the following loans?
a) A loan to purchase 75 acres of land
b) A loan to purchase a duplex & rehabilitate it into a single-family dwelling
c) A loan to purchase a property that includes a gas station and convenience store?
, d) A farm loan - ✔✔b) A loan to purchase a duplex & rehabilitate it into a single-family dwelling
Which of the following is not a duty assigned to the CFPB by the Dodd-Frank Act?
a) Monitoring the markets for consumer financial products and services
b) Granting & denying mortgage loan originator licenses
c) Taking enforcement actions for violations of federal consumer financial laws
d) Collecting & responding to consumer complaints - ✔✔b) Granting & denying mortgage loan originator
licenses
The Fraud Enforcement & Recovery Act was adopted by Congress in 2009 to?
a) Respond to the rising incidence of foreclosure scams
b) Strengthen the Red Flags Rules
c) Respond to identity theft & help victims restore their credit
d) Facilitate the prosecution of those who commit mortgage fraud - ✔✔d) Facilitate the prosecution of
those who commit mortgage fraud
Which of the following reasons for denying an applicant a loan is a violation of fair lending laws?
a) The applicant's recent marital status may lean to a change in employment
b) The applicant's income does not meet the required level for repayment of the loan
c) The applicant's age is below the minimum age for executing a contract
d) The applicant's credit history includes defaults on many credit payments - ✔✔a) The applicant's
recent marital status may lean to a change in employment
Which of the following payments is a violation of RESPA?
a) A title company charges a market fee for examination & evaluation of title evidence
b) Two mortgage brokers decide to split the mortgage broker fee from a residential loan transaction
RESP does not apply to:
a) Loans secured by a lien on a principal dwelling
b) Federally related mortgage loans
c) Subprime mortgage loans
d) Loans for business, commercial and agricultural purposes - ✔✔d) Loans for business, commercial and
agricultural purposes
Under the Fair Credit Reporting Act, which of the following entities has the burden of protecting a
consumer's privacy when his/her credit information is being reported?
a) Credit reporting agency
b) HUD
c) Mortgage broker
d) The consumer - ✔✔a) Credit reporting agency
An annual escrow analysis is used to do which of the following?
a) Report underwriting errors
b) Ensure the loan is properly amortized
c) Reduce burden on the servicer
d) Prevent escrow overages - ✔✔d) Prevent escrow overages
If a mortgage professional advertises a loan product at "7.25% APR for the first six months! After six
months, APR is 10.5%, subject to increase based on market conditions," What if any additional
disclosures does TILA require?
a) No other information is required
,b) The finance charges for the loan
c) The monthly payment for the loan
d) The APR in effect after the introductory rate expires - ✔✔a) No other information is required
There is a ________ accuracy tolerance for amounts stated on the Loan Estimate and the actual closing
cost if the consumer is allowed to shop for his/her own settlement service provider.
a) 5% c) 10%
B) 15% d) 0% - ✔✔c) 10%
The USA PATRIOT Act is a federal law that Congress adopted in response to:
a) The need to revitalize the economy in 2008
b) The meltdown of the mortgage lending market in 2007
c) The terrorist attacks on September 11, 2001
d) The need to make HAMP loans available to more Americans - ✔✔c) The terrorist attacks on
September 11, 2001
What federal statute primarily serves to control the settlement costs of residential mortgage loans?
a) TILA b) ECOA
c) RESPA d) HMDA - ✔✔c) RESPA
The disclosure requirements of RESPA would apply to which of the following loans?
a) A loan to purchase 75 acres of land
b) A loan to purchase a duplex & rehabilitate it into a single-family dwelling
c) A loan to purchase a property that includes a gas station and convenience store?
, d) A farm loan - ✔✔b) A loan to purchase a duplex & rehabilitate it into a single-family dwelling
Which of the following is not a duty assigned to the CFPB by the Dodd-Frank Act?
a) Monitoring the markets for consumer financial products and services
b) Granting & denying mortgage loan originator licenses
c) Taking enforcement actions for violations of federal consumer financial laws
d) Collecting & responding to consumer complaints - ✔✔b) Granting & denying mortgage loan originator
licenses
The Fraud Enforcement & Recovery Act was adopted by Congress in 2009 to?
a) Respond to the rising incidence of foreclosure scams
b) Strengthen the Red Flags Rules
c) Respond to identity theft & help victims restore their credit
d) Facilitate the prosecution of those who commit mortgage fraud - ✔✔d) Facilitate the prosecution of
those who commit mortgage fraud
Which of the following reasons for denying an applicant a loan is a violation of fair lending laws?
a) The applicant's recent marital status may lean to a change in employment
b) The applicant's income does not meet the required level for repayment of the loan
c) The applicant's age is below the minimum age for executing a contract
d) The applicant's credit history includes defaults on many credit payments - ✔✔a) The applicant's
recent marital status may lean to a change in employment
Which of the following payments is a violation of RESPA?
a) A title company charges a market fee for examination & evaluation of title evidence
b) Two mortgage brokers decide to split the mortgage broker fee from a residential loan transaction
