NMLS MLO FLASHCARDS QUESTIONS
AND ANSWERS
"What is a triggering term in advertising? - Answer-Specific terms like '5% down' that
require full disclosure of loan terms"
"What law regulates high-cost mortgages? - Answer-HOEPA (Home Ownership and
Equity Protection Act)"
"What section of TILA does HOEPA fall under? - Answer-Section 32"
"What section of TILA regulates higher-priced mortgage loans? - Answer-Section 35"
"What is the max DTI ratio for a Qualified Mortgage? - Answer-43%"
"What law prohibits discrimination in lending? - Answer-ECOA (Equal Credit Opportunity
Act)"
"Which regulation is ECOA associated with? - Answer-Regulation B"
"What are the protected classes under ECOA? - Answer-Race" color religion national
origin sex marital status age public assistance
"How long must lenders keep records of ECOA compliance? - Answer-25 months"
"What does HMDA stand for? - Answer-Home Mortgage Disclosure Act"
"What is the purpose of HMDA? - Answer-To identify possible discriminatory lending
patterns"
"Which regulation is HMDA associated with? - Answer-Regulation C"
"What does FACTA stand for? - Answer-Fair and Accurate Credit Transactions Act"
"What is the purpose of FACTA? - Answer-To prevent identity theft and improve
accuracy of credit reports"
"What is the Red Flags Rule? - Answer-A FACTA requirement that lenders implement
programs to detect and prevent identity theft"
, "What law created the CFPB? - Answer-The Dodd-Frank Wall Street Reform and
Consumer Protection Act"
"What does SAFE Act stand for? - Answer-Secure and Fair Enforcement for Mortgage
Licensing Act"
"What is the purpose of the SAFE Act? - Answer-To establish minimum standards for
licensing and registration of MLOs"
"What does RESPA stand for? - Answer-Real Estate Settlement Procedures Act"
"Which regulation is RESPA associated with? - Answer-Regulation X"
"What is the purpose of RESPA? - Answer-To provide disclosures about settlement
costs and prohibit kickbacks/unearned fees"
"When must the Loan Estimate (LE) be provided? - Answer-Within 3 business days of
application"
"Which disclosure replaced the Good Faith Estimate (GFE)? - Answer-The Loan
Estimate (LE)"
"Which disclosure replaced the HUD-1 Settlement Statement? - Answer-The Closing
Disclosure (CD)"
"When must the Closing Disclosure be received by the borrower? - Answer-At least 3
business days before closing"
"What is the maximum penalty for RESPA violation? - Answer-$10" 000 fine and up to 1
year in prison
"What does TILA stand for? - Answer-Truth in Lending Act"
"Which regulation is TILA associated with? - Answer-Regulation Z"
"What is the main purpose of TILA? - Answer-To ensure consumers understand the true
cost of credit (APR" finance charges)
"What is APR? - Answer-Annual Percentage Rate" the cost of credit expressed as a
yearly rate
"What law requires disclosure of APR? - Answer-TILA (Reg Z)"
"Which disclosure must be given at closing under TILA? - Answer-The Closing
Disclosure"
AND ANSWERS
"What is a triggering term in advertising? - Answer-Specific terms like '5% down' that
require full disclosure of loan terms"
"What law regulates high-cost mortgages? - Answer-HOEPA (Home Ownership and
Equity Protection Act)"
"What section of TILA does HOEPA fall under? - Answer-Section 32"
"What section of TILA regulates higher-priced mortgage loans? - Answer-Section 35"
"What is the max DTI ratio for a Qualified Mortgage? - Answer-43%"
"What law prohibits discrimination in lending? - Answer-ECOA (Equal Credit Opportunity
Act)"
"Which regulation is ECOA associated with? - Answer-Regulation B"
"What are the protected classes under ECOA? - Answer-Race" color religion national
origin sex marital status age public assistance
"How long must lenders keep records of ECOA compliance? - Answer-25 months"
"What does HMDA stand for? - Answer-Home Mortgage Disclosure Act"
"What is the purpose of HMDA? - Answer-To identify possible discriminatory lending
patterns"
"Which regulation is HMDA associated with? - Answer-Regulation C"
"What does FACTA stand for? - Answer-Fair and Accurate Credit Transactions Act"
"What is the purpose of FACTA? - Answer-To prevent identity theft and improve
accuracy of credit reports"
"What is the Red Flags Rule? - Answer-A FACTA requirement that lenders implement
programs to detect and prevent identity theft"
, "What law created the CFPB? - Answer-The Dodd-Frank Wall Street Reform and
Consumer Protection Act"
"What does SAFE Act stand for? - Answer-Secure and Fair Enforcement for Mortgage
Licensing Act"
"What is the purpose of the SAFE Act? - Answer-To establish minimum standards for
licensing and registration of MLOs"
"What does RESPA stand for? - Answer-Real Estate Settlement Procedures Act"
"Which regulation is RESPA associated with? - Answer-Regulation X"
"What is the purpose of RESPA? - Answer-To provide disclosures about settlement
costs and prohibit kickbacks/unearned fees"
"When must the Loan Estimate (LE) be provided? - Answer-Within 3 business days of
application"
"Which disclosure replaced the Good Faith Estimate (GFE)? - Answer-The Loan
Estimate (LE)"
"Which disclosure replaced the HUD-1 Settlement Statement? - Answer-The Closing
Disclosure (CD)"
"When must the Closing Disclosure be received by the borrower? - Answer-At least 3
business days before closing"
"What is the maximum penalty for RESPA violation? - Answer-$10" 000 fine and up to 1
year in prison
"What does TILA stand for? - Answer-Truth in Lending Act"
"Which regulation is TILA associated with? - Answer-Regulation Z"
"What is the main purpose of TILA? - Answer-To ensure consumers understand the true
cost of credit (APR" finance charges)
"What is APR? - Answer-Annual Percentage Rate" the cost of credit expressed as a
yearly rate
"What law requires disclosure of APR? - Answer-TILA (Reg Z)"
"Which disclosure must be given at closing under TILA? - Answer-The Closing
Disclosure"
