NMLS Practice Exam 5 Question and
Answers Latest Updates 2026 Graded
A+
Which law restricts the sharing of information given when a consumer
applies for a mortgage loan?
FTC Disposal Rules
Consumer Regulatory Protection Act
Fair Credit Reporting Act
Gramm-Leach-Bliley Act
Gramm-Leach-Bliley Act
In accordance with Section 8 of the Real Estate Settlement
Procedures Act, a mortgage broker may receive compensation for
which of the following?
A-The reasonable value of goods and/or services actually performed
or provided
B-Referring a borrower to a real estate agent
C-Submitting a loan to a lender
D-Taking information to be used in a loan application and submitting
the file to processing
A-The reasonable value of goods and/or services actually performed or
provided
When a loan is characterized as "conforming," it means the loan:
Is a 30-year fixed
Meets standards for a government program
Requires no PMI
Meets guidelines established by Fannie Mae and Freddie Mac
Meets guidelines established by Fannie Mae and Freddie Mac
The initial Loan Estimate must be delivered at least how many days
prior to consummation?
Three business days
,Seven business days
There is no timing requirement
One business day
Seven business days
The most commonly used type of reverse mortgage is known as a:
Home Equity Line of Credit
Home Equity Consolidation Mortgage
Home Equity Conversion Mortgage
Home Equity Conversion Loan
Home Equity Conversion Mortgage
On what page of the Closing Disclosure would the consumer find
information about the cash needed to close, in comparison to
information on the Loan Estimate?
Page two
Page four
Page three
Page one
Page three
The Guidance on Nontraditional Mortgage Product Risks examined
and made recommendations on the use of what types of loans?
A-Payment-option ARMs, limited documentation loans, and reverse
mortgages
B-30-year and 15-year fixed loans made to elderly borrowers
C-Interest-only, payment-option ARMs, and other nontraditional
adjustable-rate mortgages
D-Interest-only, payment-option ARMs, and reverse mortgages
,C-Interest-only, payment-option ARMs, and other nontraditional adjustable-
rate mortgages
The front end ratio is:
A comparison of the amount of the loan and the borrower's income
A comparison of the borrower's total monthly obligations and gross
monthly income
A comparison of the value of the property and the amount of the loan
A comparison of the borrower's monthly housing expense and his or
her income
A comparison of the borrower's monthly housing expense and his or her
income
If a lender wants to obtain copies of a borrower's tax returns, the
borrower is asked to sign what?
4506-T
1003
A waiver of financial information
1040
4506-T
Under RESPA, the initial escrow account statement:
Is due no later than the time of settlement
Is due no later than 45 days after application
Is due no later than 45 days after settlement
Is due no later than the time of application
Is due no later than 45 days after settlement
What is the maximum fee that may be charged for preparation of the
Closing Disclosure?
$0
.1% of the loan amount
1% of the loan amount
$50
$0
The generally accepted appraisal standards in the United States are
known as:
, USASB
USPAP
FinCEN
ASB
USPAP
In an adjustable-rate mortgage, this term refers to the maximum
amount by which the interest rate may vary during its lifetime.
Annual cap
Periodic rate adjustment cap
Lifetime cap
Payment cap
Lifetime cap
What agency ensures that GSEs are using sound financial practices
and have adequate capital to engage in the mortgage business?
The Office of Federal Housing Enterprise Oversight
The Department of Housing and Urban Development
The Office of the Comptroller of the Treasury
The Federal Housing Finance Agency
The Federal Housing Finance Agency
An FHA loan, insured by the federal government, protects lenders
against:
Flood or other hazard
Fraud or misappropriation
Foreclosure
Market fluctuation
Foreclosure
The Telemarketing Sales Rule prohibits calls made to consumers:
After 8:00 a.m. or before 9:00 p.m.
Not listed on the Do-Not-Call Registry
Who have specifically asked a mortgage professional not to contact
them
Who have established a business relationship within the last 12
months
Who have specifically asked a mortgage professional not to contact them
Answers Latest Updates 2026 Graded
A+
Which law restricts the sharing of information given when a consumer
applies for a mortgage loan?
FTC Disposal Rules
Consumer Regulatory Protection Act
Fair Credit Reporting Act
Gramm-Leach-Bliley Act
Gramm-Leach-Bliley Act
In accordance with Section 8 of the Real Estate Settlement
Procedures Act, a mortgage broker may receive compensation for
which of the following?
A-The reasonable value of goods and/or services actually performed
or provided
B-Referring a borrower to a real estate agent
C-Submitting a loan to a lender
D-Taking information to be used in a loan application and submitting
the file to processing
A-The reasonable value of goods and/or services actually performed or
provided
When a loan is characterized as "conforming," it means the loan:
Is a 30-year fixed
Meets standards for a government program
Requires no PMI
Meets guidelines established by Fannie Mae and Freddie Mac
Meets guidelines established by Fannie Mae and Freddie Mac
The initial Loan Estimate must be delivered at least how many days
prior to consummation?
Three business days
,Seven business days
There is no timing requirement
One business day
Seven business days
The most commonly used type of reverse mortgage is known as a:
Home Equity Line of Credit
Home Equity Consolidation Mortgage
Home Equity Conversion Mortgage
Home Equity Conversion Loan
Home Equity Conversion Mortgage
On what page of the Closing Disclosure would the consumer find
information about the cash needed to close, in comparison to
information on the Loan Estimate?
Page two
Page four
Page three
Page one
Page three
The Guidance on Nontraditional Mortgage Product Risks examined
and made recommendations on the use of what types of loans?
A-Payment-option ARMs, limited documentation loans, and reverse
mortgages
B-30-year and 15-year fixed loans made to elderly borrowers
C-Interest-only, payment-option ARMs, and other nontraditional
adjustable-rate mortgages
D-Interest-only, payment-option ARMs, and reverse mortgages
,C-Interest-only, payment-option ARMs, and other nontraditional adjustable-
rate mortgages
The front end ratio is:
A comparison of the amount of the loan and the borrower's income
A comparison of the borrower's total monthly obligations and gross
monthly income
A comparison of the value of the property and the amount of the loan
A comparison of the borrower's monthly housing expense and his or
her income
A comparison of the borrower's monthly housing expense and his or her
income
If a lender wants to obtain copies of a borrower's tax returns, the
borrower is asked to sign what?
4506-T
1003
A waiver of financial information
1040
4506-T
Under RESPA, the initial escrow account statement:
Is due no later than the time of settlement
Is due no later than 45 days after application
Is due no later than 45 days after settlement
Is due no later than the time of application
Is due no later than 45 days after settlement
What is the maximum fee that may be charged for preparation of the
Closing Disclosure?
$0
.1% of the loan amount
1% of the loan amount
$50
$0
The generally accepted appraisal standards in the United States are
known as:
, USASB
USPAP
FinCEN
ASB
USPAP
In an adjustable-rate mortgage, this term refers to the maximum
amount by which the interest rate may vary during its lifetime.
Annual cap
Periodic rate adjustment cap
Lifetime cap
Payment cap
Lifetime cap
What agency ensures that GSEs are using sound financial practices
and have adequate capital to engage in the mortgage business?
The Office of Federal Housing Enterprise Oversight
The Department of Housing and Urban Development
The Office of the Comptroller of the Treasury
The Federal Housing Finance Agency
The Federal Housing Finance Agency
An FHA loan, insured by the federal government, protects lenders
against:
Flood or other hazard
Fraud or misappropriation
Foreclosure
Market fluctuation
Foreclosure
The Telemarketing Sales Rule prohibits calls made to consumers:
After 8:00 a.m. or before 9:00 p.m.
Not listed on the Do-Not-Call Registry
Who have specifically asked a mortgage professional not to contact
them
Who have established a business relationship within the last 12
months
Who have specifically asked a mortgage professional not to contact them
