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NMLS Final Exam Questions and Answers
100% Pass
Who is responsible for ensuring that the Closing Disclosure is delivered to the consumer?
A.The creditor
B.The loan processor
C.The consumer
D. The CFPB - ANS A. the creditor
Which law restricts the sharing of information given when a consumer applies for a mortgage
loan?
A. Fair Credit Reporting Act
B. FTC Disposal Rules
C. Gramm-Leach-Bliley Act
D. Consumer Regulatory Protection Act - ANS C. Gramm-Leach-Bliley Act
Which document actually contains the borrower's promise to repay the loan?
A. The deed
B. The mortgage
C. The note
D. The TIL Disclosure - ANS C. The note
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The practice of intentionally targeting borrowers in poor or underserved areas with predatory
loans is known as:
A. Redlining
B. Steering
C. Misappropriation
D. Reverse redlining - ANS D. Reverse redlining
If a lender wants to obtain copies of a borrower's tax returns, the borrower is asked to sign
what?
A. 4506-T
B. A waiver of financial information
C. 1003
D. 1040 - ANS A. 4506-T
An increase in fees and issuance of a revised Loan Estimate to reflect the new amounts is
permitted in which of the following cases?
A. The creditor failed to provide an accurate estimate of transfer taxes and wants to issue a
revised Loan Estimate showing actual costs
B. The consumer is not allowed to shop for flood zone determination services and the actual
costs are more than the estimated costs
C. The title company affiliated with the lender decides to charge more for its services than
initially disclosed
D. The consumer has failed to respond to a loan officer within ten business days and the lending
terms have changed - ANS D. The consumer has failed to respond to a loan officer within ten
business days and the lending terms have changed
All of the following are true of FHA fixed-rate loans, except:
A. They require upfront MIP on all loans
B. They are available in 15- and 30-year terms
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C. The borrower is only required to carry MIP until the LTV reaches 78%
D. The borrower must make at least a 3.50% investment - ANS C. The borrower is only
required to carry MIP until the LTV reaches 78%
Previously used as compensation for mortgage professionals, yield spread premiums must now
be used:
A.As referral fees paid to the broker by a settlement service provider
B. As credits to the borrower to help pay settlement costs
C. As commissions paid in addition to mortgage broker compensation
D. As credits off of the interest rate of the loan - ANS B. As credits to the borrower to help
pay settlement costs
On which portion of the loan application would one find a street address and legal description
of the property?
A. Section X
B. Section II
C. Section XV
D. Section III - ANS B. Section II
Which of the following best describes the legal consequences of providing an inflated
description of income on a loan application?
A. It is not an illegal act, but may impact the consumer's credit score
B. It is a violation of multiple federal lending laws and constitutes fraud
C. It is not a violation of criminal laws, and any penalties imposed are civil, not criminal
D. It is not illegal if the applicant inflates his or her income to secure approval for the loan but
fully intends to repay the obligation - ANS B. It is a violation of multiple federal lending laws
and constitutes fraud
Which of the following is permitted as a result of a referral?
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A. A free monthly pass to the gym with each closing
B. A well-written thank you note
C. A coffee card for each client
D. The names, phone numbers, and annual incomes of clients who have applied for loans -
ANS B. A well-written thank you note
What agency ensures that GSEs are using sound financial practices and have adequate capital
to engage in the mortgage business?
A. The Federal Housing Finance Agency
B. The Department of Housing and Urban Development
C. The Office of the Comptroller of the Treasury
D. The Office of Federal Housing Enterprise Oversight - ANS A. The Federal Housing Finance
Agency
What is the maximum fee that may be charged for preparation of the Closing Disclosure?
A. $50
B. .1% of the loan amount
C. $0
D. 1% of the loan amount - ANS C) $0
Don is refinancing his home in order to save money. If the loan goes through, his payment will
drop from $2,000 per month (PITI) to $1,500 per month (PITI). Don's gross income each month
is $6,800, but he has a $300 car payment, a $150 credit card payment, and monthly alimony
payments of $1,300. What is Don's housing ratio on the proposed loan?
A.29%
B.31%
C.48%
D. 22% - ANS D) 22%
NMLS Final Exam Questions and Answers
100% Pass
Who is responsible for ensuring that the Closing Disclosure is delivered to the consumer?
A.The creditor
B.The loan processor
C.The consumer
D. The CFPB - ANS A. the creditor
Which law restricts the sharing of information given when a consumer applies for a mortgage
loan?
A. Fair Credit Reporting Act
B. FTC Disposal Rules
C. Gramm-Leach-Bliley Act
D. Consumer Regulatory Protection Act - ANS C. Gramm-Leach-Bliley Act
Which document actually contains the borrower's promise to repay the loan?
A. The deed
B. The mortgage
C. The note
D. The TIL Disclosure - ANS C. The note
, ©THESTAR 2025 ALL RIGHTS RESERVED
The practice of intentionally targeting borrowers in poor or underserved areas with predatory
loans is known as:
A. Redlining
B. Steering
C. Misappropriation
D. Reverse redlining - ANS D. Reverse redlining
If a lender wants to obtain copies of a borrower's tax returns, the borrower is asked to sign
what?
A. 4506-T
B. A waiver of financial information
C. 1003
D. 1040 - ANS A. 4506-T
An increase in fees and issuance of a revised Loan Estimate to reflect the new amounts is
permitted in which of the following cases?
A. The creditor failed to provide an accurate estimate of transfer taxes and wants to issue a
revised Loan Estimate showing actual costs
B. The consumer is not allowed to shop for flood zone determination services and the actual
costs are more than the estimated costs
C. The title company affiliated with the lender decides to charge more for its services than
initially disclosed
D. The consumer has failed to respond to a loan officer within ten business days and the lending
terms have changed - ANS D. The consumer has failed to respond to a loan officer within ten
business days and the lending terms have changed
All of the following are true of FHA fixed-rate loans, except:
A. They require upfront MIP on all loans
B. They are available in 15- and 30-year terms
, ©THESTAR 2025 ALL RIGHTS RESERVED
C. The borrower is only required to carry MIP until the LTV reaches 78%
D. The borrower must make at least a 3.50% investment - ANS C. The borrower is only
required to carry MIP until the LTV reaches 78%
Previously used as compensation for mortgage professionals, yield spread premiums must now
be used:
A.As referral fees paid to the broker by a settlement service provider
B. As credits to the borrower to help pay settlement costs
C. As commissions paid in addition to mortgage broker compensation
D. As credits off of the interest rate of the loan - ANS B. As credits to the borrower to help
pay settlement costs
On which portion of the loan application would one find a street address and legal description
of the property?
A. Section X
B. Section II
C. Section XV
D. Section III - ANS B. Section II
Which of the following best describes the legal consequences of providing an inflated
description of income on a loan application?
A. It is not an illegal act, but may impact the consumer's credit score
B. It is a violation of multiple federal lending laws and constitutes fraud
C. It is not a violation of criminal laws, and any penalties imposed are civil, not criminal
D. It is not illegal if the applicant inflates his or her income to secure approval for the loan but
fully intends to repay the obligation - ANS B. It is a violation of multiple federal lending laws
and constitutes fraud
Which of the following is permitted as a result of a referral?
, ©THESTAR 2025 ALL RIGHTS RESERVED
A. A free monthly pass to the gym with each closing
B. A well-written thank you note
C. A coffee card for each client
D. The names, phone numbers, and annual incomes of clients who have applied for loans -
ANS B. A well-written thank you note
What agency ensures that GSEs are using sound financial practices and have adequate capital
to engage in the mortgage business?
A. The Federal Housing Finance Agency
B. The Department of Housing and Urban Development
C. The Office of the Comptroller of the Treasury
D. The Office of Federal Housing Enterprise Oversight - ANS A. The Federal Housing Finance
Agency
What is the maximum fee that may be charged for preparation of the Closing Disclosure?
A. $50
B. .1% of the loan amount
C. $0
D. 1% of the loan amount - ANS C) $0
Don is refinancing his home in order to save money. If the loan goes through, his payment will
drop from $2,000 per month (PITI) to $1,500 per month (PITI). Don's gross income each month
is $6,800, but he has a $300 car payment, a $150 credit card payment, and monthly alimony
payments of $1,300. What is Don's housing ratio on the proposed loan?
A.29%
B.31%
C.48%
D. 22% - ANS D) 22%
