NMLS PRACTICE EXAMINATION 2026
QUESTIONS WITH ANSWERS GRADED A+
◍ Sources of Risk Factors.
Answer: BorrowersMultiple Sources
◍ Which law requires businesses to print only the last five card numbers on a
credit card receipt?.
Answer: FACT ACT
◍ GFE average charge calculations allowed.
Answer: If based on the period of time (between 30 days and 6 months), the
type of loan, and the geographic area (not size of loan or property value). if
used must be used for all loans in a specific loan classification
◍ What gets a right of recision?.
Answer: Refi/HELOC
◍ APR.
Answer: Annual Percentage Rate
◍ ECOA Regulation B.
Answer: Equal Credit Opportunity Act Prohibits lenders and other who
grant or arrange ecredit to consumers from discriminating on the basis of
race, religion, color, national origin, sex, marital status, age, or dependence
on public assitance. Lenders must provide applicants written notice within
30 days with reasons for the denial or termination of credit.
◍ Define HMDA and what is means.
Answer: Requires certain mortgage loan originators to report data. They
send the data to the federal government to see if they are able to serve
different population groups and determine if there is discrimination
◍ Most Common Type of Loan.
, Answer: Conventional Loan
◍ For how many years must a lender retain the Loan Estimate?.
Answer: Three
◍ Which regulation states that the only correct way to ask about a borrower's
marital status is: are you married, unmarried or separated?.
Answer: ECOA - Regulation B
◍ Federal Financial Institutions Examination Council.
Answer: Interagency body empowered to prescribe uniform principles,
standards, and report forms for the federal examination of financial
institutions
◍ 4 criteria to look at in a financial transaction that are red flags.
Answer: 1. Funds from illegal activities2. Transactions that try to evade any
requirements3. something that has no lawful or business purpose 4. use of a
loan to conduct criminal activity
◍ Individuals must file a report when they transport how much cash out the
country?.
Answer: $10,000 or more
◍ Appraisal Delivery.
Answer: ECOA requires the copy of any valuation report (Appraisal) be
mailed 3 business days prior to closingis the client however wants to get it at
closing they must agree to it 3 days prior to closing.
◍ FinCEN Loan Originator.
Answer: A person who accepts a residential loan application as well as
offers and negotiates terms.
◍ (FCRA) Fair Credit Reporting Act - Regulation V Disclosures.
Answer: A one-time written notice of derogatory information separate from
TIL disclosures
◍ As it relates to the initial loan estimate - what is the definition of a Business
day?.
, Answer: Any day that the Creditor's office is open for business
◍ Different Types of Mortgages.
Answer: - FHA - Conventional- VA - USDA- Construction - SubPrime -
NonConforming
◍ Reg (B) ECOA Equal Credit Opportunity Act Income Evaluation.
Answer: A creditor may not discount or refuse to consider:Public assistance
incomeIncome because of sex or marital statusIncome from verifiable and
consistent part time employment, overtime, pension, annuity or retirement
benefits programsRegular alimony, child support or separate maintenance
payments, if the applicant chooses to disclose it
◍ Payment Shock.
Answer: Borrowers Experience this once the loan beings amortizing
◍ What type of property is covered under RESPA?.
Answer: 1 - 4 unit Residential Property
◍ If someone sells their property their right to rescind is...
Answer: Eliminated
◍ HELOC.
Answer: - acts as a big credit card- usually requires 5 to 10 years of interest
payment- usually over 15 years- interest rate changes monthly
◍ All advertisements - Visual, Audio, Paper****require.
Answer: - Interest Rates- APR
◍ When do you file a SAR?.
Answer: once suspicious activity is discovered
◍ How does the privacy rule require the privacy notice to be delivered?.
Answer: Requires it to be delivered in writing unless the customer/consumer
wants it electronically in that case it needs to be acknowledged that it will be
done electronically.
◍ FACTA - Fair and Accurate Credit Transaction Act - Red Flag Rules
require:.
, Answer: Written identity theft prevention programCard issuers validate
change of address requestsUsers of consumer reports to verify identity of
subject in the event of address discrepancyAccording to the FTC, red flags
fall into these categories:
◍ Which two ways can a borrower go through pre-qualification.
Answer: An interview in person/ over the phoneSending in an application
and loan officer will receive it
◍ If an application works 40 hours every week and is paid $13.52 per hour,
what is the applicant's monthly income?.
Answer: $2,343.47
◍ What type of mortgage requires a non-refundable funding fee?.
Answer: VA Loan
◍ Portfolio and Risk Management Practices.
Answer: Section of Guidance that is targeted towards financial institutions
and the way they manage their portfolios
◍ Reduction Option Mortgage.
Answer: A fixed-rate mortgage that gives the borrower a limited opportunity
to reduce the interest rate one time during the course of the loan, provided
certain conditions are met.
◍ What is the purpose of CFPD?.
Answer: overseeing the Federal financial laws that specifically protect
consumers
◍ Business Day.
Answer: Any day that a company is open for business typically
Monday-Saturday
◍ Short Sale Schemes.
Answer: False statements to a lender in order to resell less than the value of
the mortgage
◍ Safe Harbor Loan.
QUESTIONS WITH ANSWERS GRADED A+
◍ Sources of Risk Factors.
Answer: BorrowersMultiple Sources
◍ Which law requires businesses to print only the last five card numbers on a
credit card receipt?.
Answer: FACT ACT
◍ GFE average charge calculations allowed.
Answer: If based on the period of time (between 30 days and 6 months), the
type of loan, and the geographic area (not size of loan or property value). if
used must be used for all loans in a specific loan classification
◍ What gets a right of recision?.
Answer: Refi/HELOC
◍ APR.
Answer: Annual Percentage Rate
◍ ECOA Regulation B.
Answer: Equal Credit Opportunity Act Prohibits lenders and other who
grant or arrange ecredit to consumers from discriminating on the basis of
race, religion, color, national origin, sex, marital status, age, or dependence
on public assitance. Lenders must provide applicants written notice within
30 days with reasons for the denial or termination of credit.
◍ Define HMDA and what is means.
Answer: Requires certain mortgage loan originators to report data. They
send the data to the federal government to see if they are able to serve
different population groups and determine if there is discrimination
◍ Most Common Type of Loan.
, Answer: Conventional Loan
◍ For how many years must a lender retain the Loan Estimate?.
Answer: Three
◍ Which regulation states that the only correct way to ask about a borrower's
marital status is: are you married, unmarried or separated?.
Answer: ECOA - Regulation B
◍ Federal Financial Institutions Examination Council.
Answer: Interagency body empowered to prescribe uniform principles,
standards, and report forms for the federal examination of financial
institutions
◍ 4 criteria to look at in a financial transaction that are red flags.
Answer: 1. Funds from illegal activities2. Transactions that try to evade any
requirements3. something that has no lawful or business purpose 4. use of a
loan to conduct criminal activity
◍ Individuals must file a report when they transport how much cash out the
country?.
Answer: $10,000 or more
◍ Appraisal Delivery.
Answer: ECOA requires the copy of any valuation report (Appraisal) be
mailed 3 business days prior to closingis the client however wants to get it at
closing they must agree to it 3 days prior to closing.
◍ FinCEN Loan Originator.
Answer: A person who accepts a residential loan application as well as
offers and negotiates terms.
◍ (FCRA) Fair Credit Reporting Act - Regulation V Disclosures.
Answer: A one-time written notice of derogatory information separate from
TIL disclosures
◍ As it relates to the initial loan estimate - what is the definition of a Business
day?.
, Answer: Any day that the Creditor's office is open for business
◍ Different Types of Mortgages.
Answer: - FHA - Conventional- VA - USDA- Construction - SubPrime -
NonConforming
◍ Reg (B) ECOA Equal Credit Opportunity Act Income Evaluation.
Answer: A creditor may not discount or refuse to consider:Public assistance
incomeIncome because of sex or marital statusIncome from verifiable and
consistent part time employment, overtime, pension, annuity or retirement
benefits programsRegular alimony, child support or separate maintenance
payments, if the applicant chooses to disclose it
◍ Payment Shock.
Answer: Borrowers Experience this once the loan beings amortizing
◍ What type of property is covered under RESPA?.
Answer: 1 - 4 unit Residential Property
◍ If someone sells their property their right to rescind is...
Answer: Eliminated
◍ HELOC.
Answer: - acts as a big credit card- usually requires 5 to 10 years of interest
payment- usually over 15 years- interest rate changes monthly
◍ All advertisements - Visual, Audio, Paper****require.
Answer: - Interest Rates- APR
◍ When do you file a SAR?.
Answer: once suspicious activity is discovered
◍ How does the privacy rule require the privacy notice to be delivered?.
Answer: Requires it to be delivered in writing unless the customer/consumer
wants it electronically in that case it needs to be acknowledged that it will be
done electronically.
◍ FACTA - Fair and Accurate Credit Transaction Act - Red Flag Rules
require:.
, Answer: Written identity theft prevention programCard issuers validate
change of address requestsUsers of consumer reports to verify identity of
subject in the event of address discrepancyAccording to the FTC, red flags
fall into these categories:
◍ Which two ways can a borrower go through pre-qualification.
Answer: An interview in person/ over the phoneSending in an application
and loan officer will receive it
◍ If an application works 40 hours every week and is paid $13.52 per hour,
what is the applicant's monthly income?.
Answer: $2,343.47
◍ What type of mortgage requires a non-refundable funding fee?.
Answer: VA Loan
◍ Portfolio and Risk Management Practices.
Answer: Section of Guidance that is targeted towards financial institutions
and the way they manage their portfolios
◍ Reduction Option Mortgage.
Answer: A fixed-rate mortgage that gives the borrower a limited opportunity
to reduce the interest rate one time during the course of the loan, provided
certain conditions are met.
◍ What is the purpose of CFPD?.
Answer: overseeing the Federal financial laws that specifically protect
consumers
◍ Business Day.
Answer: Any day that a company is open for business typically
Monday-Saturday
◍ Short Sale Schemes.
Answer: False statements to a lender in order to resell less than the value of
the mortgage
◍ Safe Harbor Loan.
