NMLS Practice Exam #2 Question
and Answers Latest Updates 2026
Graded A+
How old must a borrower be to qualify for a Reverse
Mortgage?
62 years old
Which regulation has the primary function of preventing
Identity Theft?
FACT Act
Which regulation has SECTION 114 Rules?
FACT Act
Which regulation requires the creditor to verify the VALIDITY
of any change of address received?
SECTION 114 of the FACT ActWhat is the payment method used in a reverse
mortgage that allows the homeowners to receive a monthly check while living in the property?
TENURE Method
What is the fraud scheme where a borrower uses someone
else's name to purchase the property, but that person WILL
NOT be living at the property?
Straw Borrower
What government lender "insures" mortgages"?
FHA
What government lender "guarantees" mortgages?
VA Loans
What government lender loans money to fund purchases in
rural areas?
USDA/Dept. of Argriculture
What is the value remaining in property after all liens and
debts have been paid?
Equity
,A borrower is refinancing his home. How much time does
Reg Z give him to change his mind?
3 days
Which Regulation established the 3-day right of recession
rule?
TILA/REG Z
Redlining is part of which regulation/Law?
Fair Housing Act
Blockbusting is part of which regulation/Law?
Fair Housing Act
Steering is part of which regulation/Law?
Fair Housing Act
Trying to convince a homeowner to SELL his home by
implying that another race/ethnicity is moving in the
neighborhood is called?
Blockbusting/panic selling
Trying to convince a homeowner to PURCHASE in a
particular neighborhood based on his race, religion or
ethnicity is called?
STEERING
Refusing to make loans on a property in a certain
neighborhood for discriminatory reasons is called?
Redlining
What does HOEPA stand for?
Home Ownership and Equity Protection Act
HOEPA Loans are part of which larger regulation?
Reg Z/Tila
High Cost Loans are part of which larger regulation?
Reg Z/Tila
High Priced Loans are part of which larger regulation?
Reg Z/Tila
Section 32 Loans are part of which larger regulation?
Reg Z/Tila
Section 35 Loans are part of which larger regulation?
, Reg Z/Tila
MDIA ACT is part of which larger regulation?
Reg Z/Tila
Mortgage Disclosure Improvement Act is part of which larger
regulation?
Reg Z/Tila
What is another name for Annual Percentage Rate?
Effective Rate
What is another name for Interest Rate?
Note Rate or Nominal Rate
PITI divided by Gross Monthly income is referred to as what?
Housing Ratio or Front-End DTI
PITI + monthly debt divided by Gross Monthly income is
referred to as what?
Total Obligation Ration - Back-end Ratio
How long must TILA Disclosures be kept?
2 years for general TILA disclosure 3
3 years for the Loan Estimate
5 years for the Closing disclosure
What is the maximum amount of time that NEGATIVE info
can remain on a credit report?
7 years
What is the maximum amount of time that a bankruptcy can
remain on a credit report?
10 years
Which law/regulations states that a Bankruptcy can only
remain on your credit for a MAX of 10 years?
FCRA - Fair Credit Reporting Act - Reg V
Which law/regulations states that negative information can
only remain on your credit for a MAX of 7 years?
FCRA - Fair Credit Reporting Act - Reg V
Which law allows a consumer who has had her credit card
used by an identity thief to place a credit freeze on her credit
report?
and Answers Latest Updates 2026
Graded A+
How old must a borrower be to qualify for a Reverse
Mortgage?
62 years old
Which regulation has the primary function of preventing
Identity Theft?
FACT Act
Which regulation has SECTION 114 Rules?
FACT Act
Which regulation requires the creditor to verify the VALIDITY
of any change of address received?
SECTION 114 of the FACT ActWhat is the payment method used in a reverse
mortgage that allows the homeowners to receive a monthly check while living in the property?
TENURE Method
What is the fraud scheme where a borrower uses someone
else's name to purchase the property, but that person WILL
NOT be living at the property?
Straw Borrower
What government lender "insures" mortgages"?
FHA
What government lender "guarantees" mortgages?
VA Loans
What government lender loans money to fund purchases in
rural areas?
USDA/Dept. of Argriculture
What is the value remaining in property after all liens and
debts have been paid?
Equity
,A borrower is refinancing his home. How much time does
Reg Z give him to change his mind?
3 days
Which Regulation established the 3-day right of recession
rule?
TILA/REG Z
Redlining is part of which regulation/Law?
Fair Housing Act
Blockbusting is part of which regulation/Law?
Fair Housing Act
Steering is part of which regulation/Law?
Fair Housing Act
Trying to convince a homeowner to SELL his home by
implying that another race/ethnicity is moving in the
neighborhood is called?
Blockbusting/panic selling
Trying to convince a homeowner to PURCHASE in a
particular neighborhood based on his race, religion or
ethnicity is called?
STEERING
Refusing to make loans on a property in a certain
neighborhood for discriminatory reasons is called?
Redlining
What does HOEPA stand for?
Home Ownership and Equity Protection Act
HOEPA Loans are part of which larger regulation?
Reg Z/Tila
High Cost Loans are part of which larger regulation?
Reg Z/Tila
High Priced Loans are part of which larger regulation?
Reg Z/Tila
Section 32 Loans are part of which larger regulation?
Reg Z/Tila
Section 35 Loans are part of which larger regulation?
, Reg Z/Tila
MDIA ACT is part of which larger regulation?
Reg Z/Tila
Mortgage Disclosure Improvement Act is part of which larger
regulation?
Reg Z/Tila
What is another name for Annual Percentage Rate?
Effective Rate
What is another name for Interest Rate?
Note Rate or Nominal Rate
PITI divided by Gross Monthly income is referred to as what?
Housing Ratio or Front-End DTI
PITI + monthly debt divided by Gross Monthly income is
referred to as what?
Total Obligation Ration - Back-end Ratio
How long must TILA Disclosures be kept?
2 years for general TILA disclosure 3
3 years for the Loan Estimate
5 years for the Closing disclosure
What is the maximum amount of time that NEGATIVE info
can remain on a credit report?
7 years
What is the maximum amount of time that a bankruptcy can
remain on a credit report?
10 years
Which law/regulations states that a Bankruptcy can only
remain on your credit for a MAX of 10 years?
FCRA - Fair Credit Reporting Act - Reg V
Which law/regulations states that negative information can
only remain on your credit for a MAX of 7 years?
FCRA - Fair Credit Reporting Act - Reg V
Which law allows a consumer who has had her credit card
used by an identity thief to place a credit freeze on her credit
report?
