NMLS FINAL EXAM 2026
COMPREHENSIVE STUDY GUIDE
QUESTIONS AND ANSWERS
1. Under the SAFE Act, which of the following individuals would be required to obtain a
mortgage loan originator license?
A. An independent contractor who performs loan processor or underwriter activities
B. A registered loan originator employed by a depository institution
C. A person who negotiates terms for an immediate family member
D. An attorney who performs loan origination activities as an ancillary part of their practice
without compensation from a lender
Answer: A
Conceptual Explanation: The SAFE Act requires independent contractors who act as loan
processors or underwriters to be licensed. Registered MLOs at banks do not need a state
license, and family/attorney exemptions apply under specific conditions.
,2. Regulation X, which implements RESPA, prohibits kickbacks and unearned fees. Which
section specifically addresses this?
A. Section 6
B. Section 10
C. Section 9
D. Section 8
Answer: D
Conceptual Explanation: Section 8 of RESPA prohibits anyone from giving or accepting a
fee, kickback, or anything of value in exchange for referrals of settlement service business.
3. Under the Truth in Lending Act (TILA), the Right of Rescission applies to which of the
following transactions?
A. A purchase of a primary residence
B. A refinance of a primary residence with the same lender
C. A home equity line of credit (HELOC) on a principal dwelling
D. A refinance of a secondary vacation home
Answer: C
Conceptual Explanation: TILA’s Right of Rescission applies to credit transactions secured
by a consumer’s principal dwelling, such as HELOCs or refinances with a new lender. It
does not apply to residential mortgage transactions (purchases) or second homes.
, 4. An MLO takes an application and the borrower provides their race as ‘Hispanic’. The MLO
should record this information under which regulation?
A. Regulation Z
B. Regulation B
C. Regulation C
D. Regulation X
Answer: C
Conceptual Explanation: Regulation C implements the Home Mortgage Disclosure Act
(HMDA), which requires lenders to collect and report data regarding the ethnicity, race,
and sex of applicants.
5. Which of the following describes ‘Steering’ under the Loan Originator Compensation Rule?
A. Directing a consumer to a loan that results in greater compensation for the MLO, unless
the loan is in the consumer’s best interest
B. Leading a borrower toward a specific neighborhood based on their ethnicity
C. Offering a borrower a higher interest rate to cover closing costs
D. Refusing to lend in certain geographic areas
Answer: A
Conceptual Explanation: Steering occurs when an MLO directs a consumer to a specific
loan product to increase their own compensation, which is prohibited under Regulation Z.
COMPREHENSIVE STUDY GUIDE
QUESTIONS AND ANSWERS
1. Under the SAFE Act, which of the following individuals would be required to obtain a
mortgage loan originator license?
A. An independent contractor who performs loan processor or underwriter activities
B. A registered loan originator employed by a depository institution
C. A person who negotiates terms for an immediate family member
D. An attorney who performs loan origination activities as an ancillary part of their practice
without compensation from a lender
Answer: A
Conceptual Explanation: The SAFE Act requires independent contractors who act as loan
processors or underwriters to be licensed. Registered MLOs at banks do not need a state
license, and family/attorney exemptions apply under specific conditions.
,2. Regulation X, which implements RESPA, prohibits kickbacks and unearned fees. Which
section specifically addresses this?
A. Section 6
B. Section 10
C. Section 9
D. Section 8
Answer: D
Conceptual Explanation: Section 8 of RESPA prohibits anyone from giving or accepting a
fee, kickback, or anything of value in exchange for referrals of settlement service business.
3. Under the Truth in Lending Act (TILA), the Right of Rescission applies to which of the
following transactions?
A. A purchase of a primary residence
B. A refinance of a primary residence with the same lender
C. A home equity line of credit (HELOC) on a principal dwelling
D. A refinance of a secondary vacation home
Answer: C
Conceptual Explanation: TILA’s Right of Rescission applies to credit transactions secured
by a consumer’s principal dwelling, such as HELOCs or refinances with a new lender. It
does not apply to residential mortgage transactions (purchases) or second homes.
, 4. An MLO takes an application and the borrower provides their race as ‘Hispanic’. The MLO
should record this information under which regulation?
A. Regulation Z
B. Regulation B
C. Regulation C
D. Regulation X
Answer: C
Conceptual Explanation: Regulation C implements the Home Mortgage Disclosure Act
(HMDA), which requires lenders to collect and report data regarding the ethnicity, race,
and sex of applicants.
5. Which of the following describes ‘Steering’ under the Loan Originator Compensation Rule?
A. Directing a consumer to a loan that results in greater compensation for the MLO, unless
the loan is in the consumer’s best interest
B. Leading a borrower toward a specific neighborhood based on their ethnicity
C. Offering a borrower a higher interest rate to cover closing costs
D. Refusing to lend in certain geographic areas
Answer: A
Conceptual Explanation: Steering occurs when an MLO directs a consumer to a specific
loan product to increase their own compensation, which is prohibited under Regulation Z.
