NMLS EXAM 1 Questions with solutions 2024

NMLS EXAM 1 Questions with solutions 2024 1) Mortgage loan fraud is reported at what level? A. State B. Federal C. County D. City B. Mortgage Fraud is reported to the FBI and to HUD ( The United States Department of Housing and Urban Development is a Cabinet department in the executive branch of the U.S. federal government) 2) Title V of the Housing and Economic Recovery Act (HERA) of 2008 is best known as: A. The SAFE Act B. RESPA C. TILA D. CRA A. S.A.F.E --The complete name of which is the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. Brainpower Read More Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:08 / 0:15 Full screen 3) The Nationwide Mortgage Licensing System & Registry (NMLS) was begun by which of the following organizations: A. CSBS B. HUD C. AARMR D. Both "A" and "C" D. Yes, the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) started the NMLS in 2004. 4) The NMLS online system was built and is maintained by which of the following organizations: A. ABA B. FFIEC C. FINRA D. FTC C. *FINRA*Financial Industry Regulatory Authority and they operate several similar systems in the securities industry 5) All of the following are SAFE Act objectives except: A. Provide increased accountability for MLOs B. Enhance consumer protection C. Cap interest rates and fees for federally related mortgage loans D. Facilitate responsible behavior in the subprime mortgage market C. No caps are put in place by the SAFE Act or any other laws. 6) All of the following are SAFE Act objectives except: A. Improve the flow of information to and between regulatory agencies B. Regulate loan transactions involving 1-4 units of residential owner-occupied properties C. Provide a comprehensive licensing database D. Facilitate the collection and disbursement of consumer complaints B. The SAFE Act NEVER mentions 1 - 4 units of residential owner-occupied properties. It DOES mention any residential mortgage loan that is primarily for personal, family, or household use. 7) Which of the following agencies reviewed and approved the model state law written by CSBS and AARMR: A. HUD B. USDA C. Dept of Veterans Affairs D. OTS A. Yes, the Department of Housing and Urban Development reviewed the legislation for definitions, education and testing requirements, financial responsibility and criminal background standards for MLOs and found it met the minimum requirements for the SAFE Act. 8) According to the SAFE Act, a mortgage loan originator must have the MLO designation to perform all of the following duties except: A. Take a residential mortgage loan application B. Perform work related to extensions of credit for timeshare plans C. Negotiate terms of a residential mortgage loan D. Advise a consumer on rates, fees, and other costs B. An individual would NOT need the MLO designation to perform work related to extensions of credit for timeshare plans. 9) All of the following MLOs are required to be state-licensed except: A. An MLO working under the authority of the Bureau of Real Estate B. An MLO working as a Consumer Finance Lender (CFL) C. An MLO working for a federally insured depository institution D. An MLO working as a mortgage banker through the DBO C. This would include banks, credit unions and subsidiaries owned and controlled by a depository institution and regulated by a federal banking agency. 10) According to the SAFE Act, which of the following do not need to have a unique identifier number to work as an MLO: A. An employee of an insured depository institution B. An MLO working under the authority of the DRE C. An MLO working under the authority of the DBO D. None of the above D. All MLO's need a unique identifier number. The employee of an insured depository institution, however, is registered with the NMLS, not licensed. 11) Which of the following best defines appraisal: A. Same as price B. An estimate of value C. Same as cost D. An estimate of market value D. There is nothing wrong with "B" as an answer, but in the context of residential mortgages, "D" is the best answer and will contribute to your point total. 12) According to the SAFE Act, administrative and clerical tasks that do not require an MLO designation include all of the following except: A. The receipt and collection of information common for the processing or underwriting of a residential mortgage loan B. Collecting information on behalf of the consumer with regard to a residential mortgage loan C. The distribution of information common for the processing or underwriting of a residential mortgage loan D. Communication with a consumer to obtain information necessary for the processing and underwriting of a residential mortgage loan B. The correct answer involves obtaining information for the consumer from various industry sources. This is part of MLO activities and requires an MLO designation. The other answer choices involve receiving, collecting, distributing, and communicating with the consumer to obtain information from the consumer for the purpose of putting together the loan application package. This is clerical in nature.