NMLS test Exam Question and Answers
Latest Updates 2026 Graded A+
When does a referring party have to provide the ABA form to
the borrower?
Before or at the time of the referral
Advertising a mortgage loan product that a lender is not able
to offer is a violation of what federal law?
TILA/reg Z
What is the Act that requires a financial entity to provide
customers with a privacy notice, as well as an "opt out
notice", regarding the customer's personal information?
Gramm-Leach Bliley Act
Under the GLB Act, nonpublic information can only be
shared with affiliates of the financial institution or affiliates of
related third parties, even if the customer does not opt out.
(T/F)
TRUE
What information must be provided to the borrower when
referrals take place between affiliated businesses?
An Affiliated Business Disclosure Statement as mandated by
RESPA
What is the primary purpose of the Gramm-Leach Bliley Act?
Notice of right to financial privacy and right to opt out of sharing
personal information
,Along with the Fair and Accurate Credit Transactions Act
Disposal Rule, what GLB Act provision ensures that
customer's information is not handled or maintained
carelessly and is disposed of properly?
GLB Act's Safeguards rule
What is the difference between the GLB Act Safeguards Rule
and the FACT Act Disposal Rule?
GLB Act's Safeguards Rule requires all companies to design,
implement, and maintain safeguards to protect customer
information from theft... FACT Act requires businesses to take
appropriate measures to safeguard from theft in the disposal of
consumer report
What is a "Federally Related Loan"?
Loans secured by a first or subordinate lien on a residential
property that meets stated RESPA criteria. The definition is so
broad it covers virtually every home loan secured by a mortgage.
Most of HUD's enforcement actions result due to section 8 of
RESPA. What is addressed in Section 8?
Prohibited against giving or receiving a fee, kickback, or anything
of value pursuant to an agreement or understanding for the
referral of settlement business
What is an affiliated business arrangement?
An arrangement in which one person refers applicants to a
settlement service provider with whom the referring person has an
ownership interest of 1% or more
What customer protection does Section 10 of RESPA
provide?
Protect consumers by ensuring borrowers know the amount they
are to deposit into escrow by preventing lenders from
overcharging borrowers for escrow deposits
,What are the consequences for violating Section 8 of
RESPA?
Up to $10,000 and/or one year in prison
What is the primary aim of Regulation B?
ECOA is intended to promote availability of credit to all
creditworthy applicants and prohibit discrimination
A copy of the Closing Disclosure must be provided to the
borrower how many days prior to closing?
3 days prior to closing
Under the ECOA, is it lawful to turn down an applicant
because part of his/her income is derived from public
assistance?
It is unlawful not to accept an application due to the type of
income it is not however unlawful to turn them down if the income
is not enough to qualify them for the repayment
What is the letter of the regulation by which the ECOA is also
referred?
Regulation B (B for Borrower is protected)
To whom does the TIL Act apply?
All businesses and individuals that regularly extend consumer
credit that is primarily for family or household purposes. Regularly
extend credit means more than 5 mortgages per year
What is the RESPA prohibition on "mark ups" designed to
prevent?
A lender or service provider marking up 3rd party costs for the
purpose of retaining the additional funds
Under the ECOA, you must notify an applicant of Notice of
Action Taken within what time period?
30 days from receipt of a loan application
TILA requires that mortgage broker fees are
included in the finance charge?
, ALWAYS
Credit denial letters do not require the disclosure of
?
Credit Scores
Which lending law provides that consumers get a free copy
of their credit bureau report annually?
FCRA (Fair Credit Reporting Act)
Which law prohibits discrimination in resident real estate
transactions?
Fair Housing Act
Which law requires institutions, that are covered by law, to
collect extensive data about each mortgage loan application?
HMDA Regulation C (Home Mortgage Disclosure Act)
Which law applies to transactions involving the information
that is used and assembled by credit reporting agencies
(CRAs)?
FCRA (Fair Credit Reporting Act)
Red Flag Rules make what requirements on creditors and
financial institutions?
To establish an identity theft prevention program outlining
methods to prevent security breaches at a company wide level
A mortgage broker is not in violation of Section 8 of RESPA if
he/she gives or accepts a gift of nominal value ($25 or less)
(True or False)
FALSE, nothing of value may be accepted, regardless of the
amount
When would it not be a violation of the TIL act to use the term
"low monthly payment" in an advertisement?
When you do not advertise a rate, repayment term or amount of a
finance charge in conjunction with this General Advertising term
Latest Updates 2026 Graded A+
When does a referring party have to provide the ABA form to
the borrower?
Before or at the time of the referral
Advertising a mortgage loan product that a lender is not able
to offer is a violation of what federal law?
TILA/reg Z
What is the Act that requires a financial entity to provide
customers with a privacy notice, as well as an "opt out
notice", regarding the customer's personal information?
Gramm-Leach Bliley Act
Under the GLB Act, nonpublic information can only be
shared with affiliates of the financial institution or affiliates of
related third parties, even if the customer does not opt out.
(T/F)
TRUE
What information must be provided to the borrower when
referrals take place between affiliated businesses?
An Affiliated Business Disclosure Statement as mandated by
RESPA
What is the primary purpose of the Gramm-Leach Bliley Act?
Notice of right to financial privacy and right to opt out of sharing
personal information
,Along with the Fair and Accurate Credit Transactions Act
Disposal Rule, what GLB Act provision ensures that
customer's information is not handled or maintained
carelessly and is disposed of properly?
GLB Act's Safeguards rule
What is the difference between the GLB Act Safeguards Rule
and the FACT Act Disposal Rule?
GLB Act's Safeguards Rule requires all companies to design,
implement, and maintain safeguards to protect customer
information from theft... FACT Act requires businesses to take
appropriate measures to safeguard from theft in the disposal of
consumer report
What is a "Federally Related Loan"?
Loans secured by a first or subordinate lien on a residential
property that meets stated RESPA criteria. The definition is so
broad it covers virtually every home loan secured by a mortgage.
Most of HUD's enforcement actions result due to section 8 of
RESPA. What is addressed in Section 8?
Prohibited against giving or receiving a fee, kickback, or anything
of value pursuant to an agreement or understanding for the
referral of settlement business
What is an affiliated business arrangement?
An arrangement in which one person refers applicants to a
settlement service provider with whom the referring person has an
ownership interest of 1% or more
What customer protection does Section 10 of RESPA
provide?
Protect consumers by ensuring borrowers know the amount they
are to deposit into escrow by preventing lenders from
overcharging borrowers for escrow deposits
,What are the consequences for violating Section 8 of
RESPA?
Up to $10,000 and/or one year in prison
What is the primary aim of Regulation B?
ECOA is intended to promote availability of credit to all
creditworthy applicants and prohibit discrimination
A copy of the Closing Disclosure must be provided to the
borrower how many days prior to closing?
3 days prior to closing
Under the ECOA, is it lawful to turn down an applicant
because part of his/her income is derived from public
assistance?
It is unlawful not to accept an application due to the type of
income it is not however unlawful to turn them down if the income
is not enough to qualify them for the repayment
What is the letter of the regulation by which the ECOA is also
referred?
Regulation B (B for Borrower is protected)
To whom does the TIL Act apply?
All businesses and individuals that regularly extend consumer
credit that is primarily for family or household purposes. Regularly
extend credit means more than 5 mortgages per year
What is the RESPA prohibition on "mark ups" designed to
prevent?
A lender or service provider marking up 3rd party costs for the
purpose of retaining the additional funds
Under the ECOA, you must notify an applicant of Notice of
Action Taken within what time period?
30 days from receipt of a loan application
TILA requires that mortgage broker fees are
included in the finance charge?
, ALWAYS
Credit denial letters do not require the disclosure of
?
Credit Scores
Which lending law provides that consumers get a free copy
of their credit bureau report annually?
FCRA (Fair Credit Reporting Act)
Which law prohibits discrimination in resident real estate
transactions?
Fair Housing Act
Which law requires institutions, that are covered by law, to
collect extensive data about each mortgage loan application?
HMDA Regulation C (Home Mortgage Disclosure Act)
Which law applies to transactions involving the information
that is used and assembled by credit reporting agencies
(CRAs)?
FCRA (Fair Credit Reporting Act)
Red Flag Rules make what requirements on creditors and
financial institutions?
To establish an identity theft prevention program outlining
methods to prevent security breaches at a company wide level
A mortgage broker is not in violation of Section 8 of RESPA if
he/she gives or accepts a gift of nominal value ($25 or less)
(True or False)
FALSE, nothing of value may be accepted, regardless of the
amount
When would it not be a violation of the TIL act to use the term
"low monthly payment" in an advertisement?
When you do not advertise a rate, repayment term or amount of a
finance charge in conjunction with this General Advertising term
