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NMLS Practice UPDATED Exam Questions and CORRECT Answers

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NMLS Practice UPDATED Exam Questions and CORRECT Answers What law deals with credit, APR & advertising of consumer loans? - CORRECT ANSWERTILA/REGULATION Z Which regulation prohibits kickbacks? - CORRECT ANSWER- RESPA Which regulations requires the lender to cancel PMI when the loan reaches 7...

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  • August 4, 2024
  • 23
  • 2024/2025
  • Exam (elaborations)
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NMLS Practice UPDATED Exam
Questions and CORRECT Answers

What law deals with credit, APR & advertising of consumer loans? - CORRECT ANSWER-
TILA/REGULATION Z


Which regulation prohibits kickbacks? - CORRECT ANSWER- RESPA


Which regulations requires the lender to cancel PMI when the loan reaches 78% LTV? -
CORRECT ANSWER- HPA - Homeowners Protection Act


Which regulation prohibits fee splitting? - CORRECT ANSWER- RESPA


Regulation X is the letter used to describe which Law? - CORRECT ANSWER- RESPA


RESPA is the acronym used to describe which law? - CORRECT ANSWER- Real Estate
Settlement Procedures Act


What type of mortgage requires a non-refundable funding fee? - CORRECT ANSWER- VA
Loan


What is the provision in a mortgage enabling a lender to demand full repayment if the
borrower DEFAULTS on the loan? - CORRECT ANSWER- Acceleration Clause


What is the provision in a mortgage enabling a lender to demand full repayment if the
borrower TRANSFERS the loan? - CORRECT ANSWER- Alienation Clause


What does CFPB stand for? - CORRECT ANSWER- Consumer Financial Protection Bureau


What two laws created the CFBP? - CORRECT ANSWER- Dodd Frank Act and Consumer
Finance Protection Act

,Which regulations is designed to help meet the Credit Needs of the Communities in which it
operates? - CORRECT ANSWER- CRA - Community Reinvestment Act


Under ECOA rules and regulations, how many days does the borrower have to request a copy
of an appraisal report? - CORRECT ANSWER- 90


Under ECOA rules and regulations, how many days does the lender have to provide a copy of
an appraisal report, once requested by the borrower? - CORRECT ANSWER- 30


If a loan application is APPROVED, Under ECOA rules and regulations, when MUST a copy
of the appraisal be provided to the borrower? - CORRECT ANSWER- 3 business days


Conforming Loans follow the guidelines of which regulators? - CORRECT ANSWER-
Fannie Mae and Freddie Mac


Which regulation requires the lenders to "BE EQUAL" when extending credit to borrowers? -
CORRECT ANSWER- ECOA - Regulation B


How old must a borrower be to qualify for a Reverse Mortgage? - CORRECT ANSWER- 62
years old


Which regulation has the primary function of preventing Identity Theft? - CORRECT
ANSWER- FACT Act


Which regulation has SECTION 114 Rules? - CORRECT ANSWER- FACT Act


Which regulation requires the creditor to verify the VALIDITY of any change of address
received? - CORRECT ANSWER- SECTION 114 of the FACT Act


What is the payment method used in a reverse mortgage that allows the homeowners to
receive a monthly check while living in the property? - CORRECT ANSWER- 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? - CORRECT ANSWER-
Straw Borrower


What government lender "insures" mortgages"? - CORRECT ANSWER- FHA


What government lender "guarantees" mortgages? - CORRECT ANSWER- VA Loans


What government lender loans money to fund purchases in rural areas? - CORRECT
ANSWER- USDA/Dept. of Argriculture


What is the value remaining in property after all liens and debts have been paid? - CORRECT
ANSWER- Equity


A borrower is refinancing his home. How much time does Reg Z give him to change his
mind? - CORRECT ANSWER- 3 days


Which Regulation established the 3-day right of recession rule? - CORRECT ANSWER-
TILA/REG Z


Redlining is part of which regulation/Law? - CORRECT ANSWER- Fair Housing Act


Blockbusting is part of which regulation/Law? - CORRECT ANSWER- Fair Housing Act


Steering is part of which regulation/Law? - CORRECT ANSWER- 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? - CORRECT ANSWER- Blockbusting/panic selling


Trying to convince a homeowner to PURCHASE in a particular neighborhood based on his
race, religion or ethnicity is called? - CORRECT ANSWER- STEERING


Refusing to make loans on a property in a certain neighborhood for discriminatory reasons is
called? - CORRECT ANSWER- Redlining

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