NMLS CERTIFICATION SCRIPT 2026
COMPLETE QUESTIONS AND CORRECT
ANSWERS
◉While banks remain the largest source of investment funds their
increased participation in long term home mortgage lending is
possible because of a change in federal banking regulations. What is
that change?. Answer: Reserve requirements have been reduced and
first lien home mortgages at less than 80% LTV are in the lowest risk
category. The banks increased participation in these loans still leave
funds available for other loans and investments.
◉The adjustable component use to compute the note rate on an
ARM is called the _____________________.. Answer: Index
◉According to USDA Rural Development Programs a small town can
include up to ________________ people.. Answer: 20,000 people
◉What kind of buy down would reduce the note rate?. Answer: A
permanent buy down.
◉The SAFE act is a key element of (the) _______________________..
Answer: HERA, Housing and Economic Recovery Act of 2008
,◉A Real Estate Company accepted and distributed flyers from a
Mortgage Company to Prospective Clients. Which Law(s) if any have
been violated and by who?. Answer: No laws have been violated by
any party. (per RESPA, there was no agreement to provide referrals
or something of value)
◉The FHA debt ratios are _____________/__________________.. Answer:
31/43. 31% Primary Housing Expense (Front End Ratio) and 43%
Total Obligations (Back End Ratio)
◉The SAFE Act uses unique identifiers instead of _______________..
Answer: Social Security Numbers
◉Lenders report detailed loan information and demographic
information because of which of the following acts?
1. GLBA
2.HMDA
3.RESPA
4.TIlA. Answer: HMDA, The Home Mortgage Disclosure Act
◉Three people own a primary residence as joint owners with rights
of survivorship. At the closing of their refinance, each was given a
notice of the right to rescind. How of the three must exercise that
,right to cancel the funding?. Answer: One, any one of the three can
rescind and cancel the refinance transaction
◉Section 8 of RESPA prohibits _____________________.. Answer:
Kickbacks for referrals.
◉A refinance of the borrower's residence that closes on Monday will
fund on _________________________.. Answer: Friday (three business day
right of rescission period ends after midnight on Thursday)
◉Per RESPA the maximum origination fee that may be charged on a
loan is ____________________.. Answer: Unknown, RESPA requires
disclosure of origination fees but does not set the maximum fee that
can be charged.
◉Per the Dodd-Frank Act does a "qualified mortgage" provide a
"safe harbor" regarding compliance with the ability-to-repay
requirement?. Answer: Yes
◉Relative to the Do-Not-Call registry a company may call a
consumer for up to __________________________ months after the
consumer makes an inquiry or submits an application to the
company.. Answer: 3 Months
, ◉There are three (3) groups of laws under the CFPB includig 1.
financial disclosure, 2. privacy, protection and consumer
identification and 3. __________________________.. Answer: 3. Prohibition
of Predatory Lending
◉The 3/7/3 Rule is a provision of the _______________ Act related to
required disclosures and waiting periods.. Answer: TILA, Truth in
Lending Act
◉The illegal practice of inducing owners to sell their homes by
suggesting that the ethnic or racial composition of the neighborhood
is changing is called _____________________________.. Answer:
Blockbusting
◉The borrower's ability to pay a loan is referred to as
_________________________.. Answer: Capacity
◉The Fair Housing Act of 1968 protects against discrimination
based on race, color, religion, sex, national origin, disability and
__________________________.. Answer: Familial Status
◉Which law requires that all mortgage loan originators pass a
national licensing exam?. Answer: The SAFE Act, The Secure and Fair
Enforcement for the mortgage licensing act of 2008.
COMPLETE QUESTIONS AND CORRECT
ANSWERS
◉While banks remain the largest source of investment funds their
increased participation in long term home mortgage lending is
possible because of a change in federal banking regulations. What is
that change?. Answer: Reserve requirements have been reduced and
first lien home mortgages at less than 80% LTV are in the lowest risk
category. The banks increased participation in these loans still leave
funds available for other loans and investments.
◉The adjustable component use to compute the note rate on an
ARM is called the _____________________.. Answer: Index
◉According to USDA Rural Development Programs a small town can
include up to ________________ people.. Answer: 20,000 people
◉What kind of buy down would reduce the note rate?. Answer: A
permanent buy down.
◉The SAFE act is a key element of (the) _______________________..
Answer: HERA, Housing and Economic Recovery Act of 2008
,◉A Real Estate Company accepted and distributed flyers from a
Mortgage Company to Prospective Clients. Which Law(s) if any have
been violated and by who?. Answer: No laws have been violated by
any party. (per RESPA, there was no agreement to provide referrals
or something of value)
◉The FHA debt ratios are _____________/__________________.. Answer:
31/43. 31% Primary Housing Expense (Front End Ratio) and 43%
Total Obligations (Back End Ratio)
◉The SAFE Act uses unique identifiers instead of _______________..
Answer: Social Security Numbers
◉Lenders report detailed loan information and demographic
information because of which of the following acts?
1. GLBA
2.HMDA
3.RESPA
4.TIlA. Answer: HMDA, The Home Mortgage Disclosure Act
◉Three people own a primary residence as joint owners with rights
of survivorship. At the closing of their refinance, each was given a
notice of the right to rescind. How of the three must exercise that
,right to cancel the funding?. Answer: One, any one of the three can
rescind and cancel the refinance transaction
◉Section 8 of RESPA prohibits _____________________.. Answer:
Kickbacks for referrals.
◉A refinance of the borrower's residence that closes on Monday will
fund on _________________________.. Answer: Friday (three business day
right of rescission period ends after midnight on Thursday)
◉Per RESPA the maximum origination fee that may be charged on a
loan is ____________________.. Answer: Unknown, RESPA requires
disclosure of origination fees but does not set the maximum fee that
can be charged.
◉Per the Dodd-Frank Act does a "qualified mortgage" provide a
"safe harbor" regarding compliance with the ability-to-repay
requirement?. Answer: Yes
◉Relative to the Do-Not-Call registry a company may call a
consumer for up to __________________________ months after the
consumer makes an inquiry or submits an application to the
company.. Answer: 3 Months
, ◉There are three (3) groups of laws under the CFPB includig 1.
financial disclosure, 2. privacy, protection and consumer
identification and 3. __________________________.. Answer: 3. Prohibition
of Predatory Lending
◉The 3/7/3 Rule is a provision of the _______________ Act related to
required disclosures and waiting periods.. Answer: TILA, Truth in
Lending Act
◉The illegal practice of inducing owners to sell their homes by
suggesting that the ethnic or racial composition of the neighborhood
is changing is called _____________________________.. Answer:
Blockbusting
◉The borrower's ability to pay a loan is referred to as
_________________________.. Answer: Capacity
◉The Fair Housing Act of 1968 protects against discrimination
based on race, color, religion, sex, national origin, disability and
__________________________.. Answer: Familial Status
◉Which law requires that all mortgage loan originators pass a
national licensing exam?. Answer: The SAFE Act, The Secure and Fair
Enforcement for the mortgage licensing act of 2008.
