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NMLS Practice Exam #4 Questions and
Answers 100% Pass
The administrative authority of the Commissioner includes all but which of the following?
- Promulgate rules or regulations implementing the S.A.F.E. Act
- Administer, interpret, and enforce the S.A.F.E. Act
- Carry out the intentions of the Legislature
- Sentencing violators of the S.A.F.E. Act to appropriate prison terms - ANS Sentencing
violators of the S.A.F.E. Act to appropriate prison terms
Which of the following forms of compensation is a violation of RESPA?
- A fee paid by a title company to an originator for referral of settlement services
- Borrower credit
- Money earned by a title company for closing a loan
- Broker fee - ANS A fee paid by a title company to an originator for referral of settlement
services
When is it legal to refuse to conduct a lending transaction with a consumer on the basis of their
personal characteristics?
- The consumer is a minority who may need assistance with closing costs
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- A large percentage of the borrower's income is from public assistance
- The applicant is married but applying individually
- The borrower is too young to have legal authority to enter a binding contract - ANS The
borrower is too young to have legal authority to enter a binding contract
All of the following types of information must be reported for government monitoring purposes
in accordance with HMDA, except:
- Identification of loans subject to HOEPA
- Action taken on the loan and the location of the subject property
- Ethnicity, race, sex, and income of the applicant
- Ethnicity, race, sex, and religion of the applicant - ANS Ethnicity, race, sex, and religion of
the applicant
Which of the following borrowers is best suited for an HECM?
- A borrower who needs money for several home improvement projects
- A 62-year old borrower who just cashed in a 401k for a down payment
- A borrower who was disabled during service for the military
- A 65-year-old borrower without a mortgage who would like to supplement his income -
ANS A 65-year-old borrower without a mortgage who would like to supplement his income
A consumer signs a closed-end lending agreement on Wednesday. What is the latest that
he/she may wait to exercise the right to rescind?
- Midnight on Friday
- Midnight on Saturday
- Midnight on Monday
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- Midnight on Tuesday - ANS Midnight on Saturday
If a borrower is required to pay alimony or child support, it must be included as a(n):
- Asset
- Liability
- Qualifier
- Mitigating circumstance - ANS Liability
According to the SAFE Act, which of the following is defined as a nontraditional mortgage
product?
- Any mortgage product other than a 30-year fixed-rate mortgage
- A 30-year fixed-rate mortgage
- An ARM loan with a 5-year fixed-rate period
- A 15-year fixed-rate mortgage - ANS Any mortgage product other than a 30-year fixed-rate
mortgage
A lender who refuses to originate loans in a particular neighborhood or ZIP code because of the
perceived creditworthiness of consumers living in the area is in violation of:
- FCRA
- ECOA
- HOEPA
- RESPA - ANS ECOA
ECOA applies to the extension of credit for:
, ©THESTAR 2025 ALL RIGHTS RESERVED
- Loans secured by a first or subordinate lien on residential property
- Residential, business, commercial, and agricultural loans
- Business, commercial, and agricultural loans
- All credit other than government loans - ANS Residential, business, commercial, and
agricultural loans
Which law restricts the sharing of nonpublic personal information given when a consumer
applies for a mortgage loan?
- Fair Credit Reporting Act
- FTC Disposal Rules
- Gramm-Leach-Bliley Act
- Consumer Regulatory Protection Act - ANS Gramm-Leach-Bliley Act
In the absence of caps, adjustments on an ARM loan would be determined solely by:
- The index
- The margin
- The fully-indexed rate
- The lifetime rate - ANS The fully-indexed rate
Which of the following would prevent the conveyance of title?
- Paid lien
- Owner dies and leaves a legal will
- Encumbrance
NMLS Practice Exam #4 Questions and
Answers 100% Pass
The administrative authority of the Commissioner includes all but which of the following?
- Promulgate rules or regulations implementing the S.A.F.E. Act
- Administer, interpret, and enforce the S.A.F.E. Act
- Carry out the intentions of the Legislature
- Sentencing violators of the S.A.F.E. Act to appropriate prison terms - ANS Sentencing
violators of the S.A.F.E. Act to appropriate prison terms
Which of the following forms of compensation is a violation of RESPA?
- A fee paid by a title company to an originator for referral of settlement services
- Borrower credit
- Money earned by a title company for closing a loan
- Broker fee - ANS A fee paid by a title company to an originator for referral of settlement
services
When is it legal to refuse to conduct a lending transaction with a consumer on the basis of their
personal characteristics?
- The consumer is a minority who may need assistance with closing costs
, ©THESTAR 2025 ALL RIGHTS RESERVED
- A large percentage of the borrower's income is from public assistance
- The applicant is married but applying individually
- The borrower is too young to have legal authority to enter a binding contract - ANS The
borrower is too young to have legal authority to enter a binding contract
All of the following types of information must be reported for government monitoring purposes
in accordance with HMDA, except:
- Identification of loans subject to HOEPA
- Action taken on the loan and the location of the subject property
- Ethnicity, race, sex, and income of the applicant
- Ethnicity, race, sex, and religion of the applicant - ANS Ethnicity, race, sex, and religion of
the applicant
Which of the following borrowers is best suited for an HECM?
- A borrower who needs money for several home improvement projects
- A 62-year old borrower who just cashed in a 401k for a down payment
- A borrower who was disabled during service for the military
- A 65-year-old borrower without a mortgage who would like to supplement his income -
ANS A 65-year-old borrower without a mortgage who would like to supplement his income
A consumer signs a closed-end lending agreement on Wednesday. What is the latest that
he/she may wait to exercise the right to rescind?
- Midnight on Friday
- Midnight on Saturday
- Midnight on Monday
, ©THESTAR 2025 ALL RIGHTS RESERVED
- Midnight on Tuesday - ANS Midnight on Saturday
If a borrower is required to pay alimony or child support, it must be included as a(n):
- Asset
- Liability
- Qualifier
- Mitigating circumstance - ANS Liability
According to the SAFE Act, which of the following is defined as a nontraditional mortgage
product?
- Any mortgage product other than a 30-year fixed-rate mortgage
- A 30-year fixed-rate mortgage
- An ARM loan with a 5-year fixed-rate period
- A 15-year fixed-rate mortgage - ANS Any mortgage product other than a 30-year fixed-rate
mortgage
A lender who refuses to originate loans in a particular neighborhood or ZIP code because of the
perceived creditworthiness of consumers living in the area is in violation of:
- FCRA
- ECOA
- HOEPA
- RESPA - ANS ECOA
ECOA applies to the extension of credit for:
, ©THESTAR 2025 ALL RIGHTS RESERVED
- Loans secured by a first or subordinate lien on residential property
- Residential, business, commercial, and agricultural loans
- Business, commercial, and agricultural loans
- All credit other than government loans - ANS Residential, business, commercial, and
agricultural loans
Which law restricts the sharing of nonpublic personal information given when a consumer
applies for a mortgage loan?
- Fair Credit Reporting Act
- FTC Disposal Rules
- Gramm-Leach-Bliley Act
- Consumer Regulatory Protection Act - ANS Gramm-Leach-Bliley Act
In the absence of caps, adjustments on an ARM loan would be determined solely by:
- The index
- The margin
- The fully-indexed rate
- The lifetime rate - ANS The fully-indexed rate
Which of the following would prevent the conveyance of title?
- Paid lien
- Owner dies and leaves a legal will
- Encumbrance
