NMLS ACTUAL EXAM PAPER 2026
QUESTIONS WITH ANSWERS GRADED A+
◍ C. 0%.
Answer: What is the maximum that a disclosed origination charge can
INCREASE?A. 10%B. 5%C. 0%D. .125%
◍ Interest only.
Answer: A Construction loan requires payment of:
◍ What is title insurance?.
Answer: Protects against title defects.
◍ Average Prime Offer Rate.
Answer: Rate higher than a benchmark rate
◍ FCRAFair Credit Reporting ActSection 1681b.
Answer: Enacted in 1970 that regulates the collection of credit information
and access to your credit report to ensure fairness, accuracy and privacy of
the personal information contained in the files of the credit reporting
agencies.
◍ Rebuttable Presumption.
Answer: The borrower has the ability to raise a legal challenge but must
overcome the legal presumption that the lender complied with this
obligation
◍ NPINonpublic Personal Information.
Answer: Any "personally identifiable financial information" that a financial
institution collects about an individual in connection with providing a
financial product or service that is not public
◍ Regulation Z Advertising Rules:.
Answer: 1.) Only advertise the terms available in the credit plan being
, offered2.) The ad must state the APR ( if triggers are used)3.) If the APR
can increase - you must state this in the ad "may increase or subject to
change"4.) A note rate can be in the ad but NOT MORE CONSPICUOUS
than the APR
◍ Terms of the credit transaction.
Answer: Under the Truth-in-Lending Act, a mortgage professional is
required to disclose ________ to a borrower.
◍ C. $700.
Answer: HUD estimates that the new disclosures will reduce settlement
costs by _____ per transaction.A. $250B. $500C. $700D. $1000
◍ 2% of the outstanding loan amount during the first year of the loan.
Answer: Pre payment penalties, when allowed per Dodd/Frank cannot
exceed?
◍ What is an encumbrance?.
Answer: Lien or claim against property.
◍ B.) Rate adjustments on adjustable rate programs.
Answer: The Cost of Funds Index is traditionally used to determine interest
rates of what type of loans?A. 360 month mortgage-Fixed rates.B. Rate
adjustments on adjustable rate programs.C. Reverse mortgage.D. HELOC
◍ OTSOffice of Thrift Supervision.
Answer: Federal agency under the Department of the Treasury that
chartered, supervised, and regulated all federally chartered and
state-chartered savings banks and savings and loans associations.
◍ D. A day where the creditor is customarily open to the public for carrying on
substantially all of the creditor's business functions..
Answer: For the initial disclosures, what is the definition of "business
day?"A. Any day other than Sundays and recognized legal holidays.B.
Monday through Friday.C. Any day other than bank holidays.D. A day
where the creditor is customarily open to the public for carrying on
substantially all of the creditor's business functions.
,◍ $5,000 or prison for 1 year or both.
Answer: Iff someone willfully gives false information or consistently
understates the APR or fails to comply with TILA the fine is
◍ What does a processor do?.
Answer: Collects and verifies documentation; prepares file for underwriting;
does not negotiate terms.
◍ Predatory LendingFTCA Section 5.
Answer: Lending practice that imposes unfair or abusive loan terms on a
borrower. It is also any practice that convinces a borrower to accept unfair
terms through deceptive, coercive, exploitative or unscrupulous actions for a
loan that a borrower doesn't need, doesn't want or can't afford
◍ FACTA or FACT ACT Fair and Accurate Credit Transactions Act.
Answer: Enacted in 2003, contains provisions to help reduce identity theft
and allows consumers to request and obtain a free credit report once every
twelve months from each of the three nationwide consumer credit reporting
companies
◍ Hypothecation.
Answer: Another term for pledging collateral
◍ CHARM BookletConsumer Handbook On Adjustable-Rate Mortgages.
Answer: This is an informational booklet containing general information on
Adjustable Rate Mortgages (ARM's) that is provided by the lender to the
loan applicant at the time of application for certain adjustable mortgage
loans
◍ > attest to the truthfulness of the document > expresses how the application
was taken and who the MLO is employed by.
Answer: What is the significance of having the MLO sign the last page of
the 1003?
◍ c. All.
Answer: If one or the multiple borrowing parties on a loan decides to
, exercise the right of rescission, the act will apply to ______ of the
borrowing partiesA. oneb. nonec. alld. some
◍ When can an MLO get temporary authority?.
Answer: When transitioning from federal registration or certain eligible
situations and a complete license application is submitted and pending.
◍ HECM.
Answer: When a borrower reaches 62 years of age and he has significant
equity in his home, which of the following mortgage programs would best
assist that person if he is in need of addictional living expenses, access to
funds for home repair or other needs?HELOCHECMSwing-LoanARM
◍ > 1-4 family dwellings> Condos> Manufactured housing (must be placed on
a lot that the consumer owns).
Answer: CFPB has oversight on RESPAProtects borrowers on Real Estate
Loans:
◍ A. Appraisal fees.
Answer: When calculating finance charges in compliance with the TILA, all
of the following are included except.A. Appraisal feesB. Mortgage broker
fees.C. PMID. Settlement fees.
◍ DTIDebt to Income Ratio.
Answer: Ratio lenders use to measure an individual's ability to manage
monthly payment and repay debts
◍ CBAControlled Business Arrangement.
Answer: A real estate brokerage office that provides related services through
subsidiary companies that operate within the brokerage office
◍ A. Saturday.
Answer: Settlement of a refinance transaction for a borrower's principal
residence occurs on Tuesday at 130pm, when is the loan funded?A.
SaturdayB. Friday at 1:30pmC. The next MondayD. Tuesday, day of
closing.
QUESTIONS WITH ANSWERS GRADED A+
◍ C. 0%.
Answer: What is the maximum that a disclosed origination charge can
INCREASE?A. 10%B. 5%C. 0%D. .125%
◍ Interest only.
Answer: A Construction loan requires payment of:
◍ What is title insurance?.
Answer: Protects against title defects.
◍ Average Prime Offer Rate.
Answer: Rate higher than a benchmark rate
◍ FCRAFair Credit Reporting ActSection 1681b.
Answer: Enacted in 1970 that regulates the collection of credit information
and access to your credit report to ensure fairness, accuracy and privacy of
the personal information contained in the files of the credit reporting
agencies.
◍ Rebuttable Presumption.
Answer: The borrower has the ability to raise a legal challenge but must
overcome the legal presumption that the lender complied with this
obligation
◍ NPINonpublic Personal Information.
Answer: Any "personally identifiable financial information" that a financial
institution collects about an individual in connection with providing a
financial product or service that is not public
◍ Regulation Z Advertising Rules:.
Answer: 1.) Only advertise the terms available in the credit plan being
, offered2.) The ad must state the APR ( if triggers are used)3.) If the APR
can increase - you must state this in the ad "may increase or subject to
change"4.) A note rate can be in the ad but NOT MORE CONSPICUOUS
than the APR
◍ Terms of the credit transaction.
Answer: Under the Truth-in-Lending Act, a mortgage professional is
required to disclose ________ to a borrower.
◍ C. $700.
Answer: HUD estimates that the new disclosures will reduce settlement
costs by _____ per transaction.A. $250B. $500C. $700D. $1000
◍ 2% of the outstanding loan amount during the first year of the loan.
Answer: Pre payment penalties, when allowed per Dodd/Frank cannot
exceed?
◍ What is an encumbrance?.
Answer: Lien or claim against property.
◍ B.) Rate adjustments on adjustable rate programs.
Answer: The Cost of Funds Index is traditionally used to determine interest
rates of what type of loans?A. 360 month mortgage-Fixed rates.B. Rate
adjustments on adjustable rate programs.C. Reverse mortgage.D. HELOC
◍ OTSOffice of Thrift Supervision.
Answer: Federal agency under the Department of the Treasury that
chartered, supervised, and regulated all federally chartered and
state-chartered savings banks and savings and loans associations.
◍ D. A day where the creditor is customarily open to the public for carrying on
substantially all of the creditor's business functions..
Answer: For the initial disclosures, what is the definition of "business
day?"A. Any day other than Sundays and recognized legal holidays.B.
Monday through Friday.C. Any day other than bank holidays.D. A day
where the creditor is customarily open to the public for carrying on
substantially all of the creditor's business functions.
,◍ $5,000 or prison for 1 year or both.
Answer: Iff someone willfully gives false information or consistently
understates the APR or fails to comply with TILA the fine is
◍ What does a processor do?.
Answer: Collects and verifies documentation; prepares file for underwriting;
does not negotiate terms.
◍ Predatory LendingFTCA Section 5.
Answer: Lending practice that imposes unfair or abusive loan terms on a
borrower. It is also any practice that convinces a borrower to accept unfair
terms through deceptive, coercive, exploitative or unscrupulous actions for a
loan that a borrower doesn't need, doesn't want or can't afford
◍ FACTA or FACT ACT Fair and Accurate Credit Transactions Act.
Answer: Enacted in 2003, contains provisions to help reduce identity theft
and allows consumers to request and obtain a free credit report once every
twelve months from each of the three nationwide consumer credit reporting
companies
◍ Hypothecation.
Answer: Another term for pledging collateral
◍ CHARM BookletConsumer Handbook On Adjustable-Rate Mortgages.
Answer: This is an informational booklet containing general information on
Adjustable Rate Mortgages (ARM's) that is provided by the lender to the
loan applicant at the time of application for certain adjustable mortgage
loans
◍ > attest to the truthfulness of the document > expresses how the application
was taken and who the MLO is employed by.
Answer: What is the significance of having the MLO sign the last page of
the 1003?
◍ c. All.
Answer: If one or the multiple borrowing parties on a loan decides to
, exercise the right of rescission, the act will apply to ______ of the
borrowing partiesA. oneb. nonec. alld. some
◍ When can an MLO get temporary authority?.
Answer: When transitioning from federal registration or certain eligible
situations and a complete license application is submitted and pending.
◍ HECM.
Answer: When a borrower reaches 62 years of age and he has significant
equity in his home, which of the following mortgage programs would best
assist that person if he is in need of addictional living expenses, access to
funds for home repair or other needs?HELOCHECMSwing-LoanARM
◍ > 1-4 family dwellings> Condos> Manufactured housing (must be placed on
a lot that the consumer owns).
Answer: CFPB has oversight on RESPAProtects borrowers on Real Estate
Loans:
◍ A. Appraisal fees.
Answer: When calculating finance charges in compliance with the TILA, all
of the following are included except.A. Appraisal feesB. Mortgage broker
fees.C. PMID. Settlement fees.
◍ DTIDebt to Income Ratio.
Answer: Ratio lenders use to measure an individual's ability to manage
monthly payment and repay debts
◍ CBAControlled Business Arrangement.
Answer: A real estate brokerage office that provides related services through
subsidiary companies that operate within the brokerage office
◍ A. Saturday.
Answer: Settlement of a refinance transaction for a borrower's principal
residence occurs on Tuesday at 130pm, when is the loan funded?A.
SaturdayB. Friday at 1:30pmC. The next MondayD. Tuesday, day of
closing.
