NMLS Practice Test with Complete
Solutions
A GFE is not issued until a complete application is received from a consumer. Which
answer is NOT part of the list of information that qualifies a Borrower?
A) Consumers SS#
B) Consumer Assets
C) Address of the Property
D) The mortgage loan amount sought - ANS-B.
Which type of loan is exempt from RESPA?
A) a loan to finance commercial warehouse
B) reverse mtg
C) home equity line of credit
D) mortgage to purchase a single-family home - ANS-A) RESPA doesn't cover
temporary and business loans
The initial escrow statement includes all of the following accept:
A) amount of monthly mtg
B) amount that is collected for hoa dues
C) portion of the monthly payment going to escrow
D) amount of reserve or cushion as determined by the loan servicers - ANS-B) HOA
dues are not included in the escrow/monthly payment
When is an adverse action required:
A) when application is withdrawn
B) a counter offer is extended, and accepted
C) counter offer is extended, and rejected
D) when there is a change in terms of the mortgage - ANS-C) adverse action is required
when a consumers credit is denied or they are rejected
Which factor can be considered when evaluating a loan application
A) immigration status
B) national origin
C) Pregnancy
D) Marital status - ANS-A) immigration status can effect credit history
Which income source can not be considered in a loan review
A) Educational military benefits
B) Part Time income
C) Alimony and child support
, D) Annuity Income - ANS-A) does not continue once school is finished
What type of property does a right of rescission apply to?
A) A second home
B) A non-owner occupied duplex
C) A principal residence
D) A non-owner occupied condo - ANS-C) right of rescission applies to primary prop
and gives the borrower 3 days to back out of the loan
All of the following are examples of a finance charge except:
A) interest
B) points
C) processing fee
D) title insurance - ANS-D) under tila
All of the following are required to be covered by HOEPA EXCEPT:
A) refinance
B) reverse mortgage
C) close-ended home equity loans
D) Purchase money mortgages - ANS-B) Majority of loans are covered by HOPEA
including: owner occupied, second, investment prop, and HELOCS
To avoid steering a customer to a loan product that may give higher compensation to a
MLO, an MLO must provide multiple loan options for a borrower to review. These loan
options must include all of the following EXCEPT:
A)loan with the lowest interest rate
B) loan with the lowest amount of origination/discount points
C) loan with the shortest term
D) loan with the lowest interest rate that does not have a prepayment penalty, interest
only, neg am, or a balloon in the first 7 yrs - ANS-C)
What is NOT an example of "Change of Circumstances"
A) need for Flood Insurance
B) Change in loan amount after GFE was issued
C) A disaster
D) Change in borrowers monthly income - ANS-D) a change in circumstances are
normally acts of god or new info on flood area
Once a complete application has been received, the LE must be delivered or mailed to
borrower:
A) 3 Calendar days
B) 3 Business days
C) 7 Business days
D) 7 Calendar days - ANS-B) 3 Business days
The Truth in Lending Act ensures all of the following EXCEPT:
Solutions
A GFE is not issued until a complete application is received from a consumer. Which
answer is NOT part of the list of information that qualifies a Borrower?
A) Consumers SS#
B) Consumer Assets
C) Address of the Property
D) The mortgage loan amount sought - ANS-B.
Which type of loan is exempt from RESPA?
A) a loan to finance commercial warehouse
B) reverse mtg
C) home equity line of credit
D) mortgage to purchase a single-family home - ANS-A) RESPA doesn't cover
temporary and business loans
The initial escrow statement includes all of the following accept:
A) amount of monthly mtg
B) amount that is collected for hoa dues
C) portion of the monthly payment going to escrow
D) amount of reserve or cushion as determined by the loan servicers - ANS-B) HOA
dues are not included in the escrow/monthly payment
When is an adverse action required:
A) when application is withdrawn
B) a counter offer is extended, and accepted
C) counter offer is extended, and rejected
D) when there is a change in terms of the mortgage - ANS-C) adverse action is required
when a consumers credit is denied or they are rejected
Which factor can be considered when evaluating a loan application
A) immigration status
B) national origin
C) Pregnancy
D) Marital status - ANS-A) immigration status can effect credit history
Which income source can not be considered in a loan review
A) Educational military benefits
B) Part Time income
C) Alimony and child support
, D) Annuity Income - ANS-A) does not continue once school is finished
What type of property does a right of rescission apply to?
A) A second home
B) A non-owner occupied duplex
C) A principal residence
D) A non-owner occupied condo - ANS-C) right of rescission applies to primary prop
and gives the borrower 3 days to back out of the loan
All of the following are examples of a finance charge except:
A) interest
B) points
C) processing fee
D) title insurance - ANS-D) under tila
All of the following are required to be covered by HOEPA EXCEPT:
A) refinance
B) reverse mortgage
C) close-ended home equity loans
D) Purchase money mortgages - ANS-B) Majority of loans are covered by HOPEA
including: owner occupied, second, investment prop, and HELOCS
To avoid steering a customer to a loan product that may give higher compensation to a
MLO, an MLO must provide multiple loan options for a borrower to review. These loan
options must include all of the following EXCEPT:
A)loan with the lowest interest rate
B) loan with the lowest amount of origination/discount points
C) loan with the shortest term
D) loan with the lowest interest rate that does not have a prepayment penalty, interest
only, neg am, or a balloon in the first 7 yrs - ANS-C)
What is NOT an example of "Change of Circumstances"
A) need for Flood Insurance
B) Change in loan amount after GFE was issued
C) A disaster
D) Change in borrowers monthly income - ANS-D) a change in circumstances are
normally acts of god or new info on flood area
Once a complete application has been received, the LE must be delivered or mailed to
borrower:
A) 3 Calendar days
B) 3 Business days
C) 7 Business days
D) 7 Calendar days - ANS-B) 3 Business days
The Truth in Lending Act ensures all of the following EXCEPT:
