NMLS Test Questions and Answers Graded A+
What is the pass rate for the NMLS Test and how long is it?
75% of 115 questions, 125 questions long with 10 ungraded
What is the biggest thing to remember about taking the test?
Read the questions twice, slowly, but do not take over 30 seconds pe...
NMLS Test Questions and Answers Graded A+
What is the pass rate for the NMLS Test and how long is it? - answer 75% of 115 questions, 125 questions long with 10 ungraded
What is the biggest thing to remember about taking the test? - answer Read the questions twice, slowly, but do not take over 30 seconds per question the first time through.
What is the requirement under Fair Lending, Fair Housing, and ECOA? - answer All consumers have the right to apply for a loan unless they are under 18 years of age
Which law and regulation is Home Ownership Equity Protection Act (HOEPA) under? - answer Truth in Lending Act (TILA) aka Reg Z
What are the items restricted under Home Ownership Equity Protection Act (HOEPA)? -
answer Predatory Lending, Abusing Lending Practices, Negative Amortization, Prepayment Penalties, Balloon Lending, Subprime Lending, Equity Stripping, and not meeting Ability to Repay (ATR) requirements.
What is the minimum period for a balloon? - answer A 30-year amortized loan that is due in 60 months.
What is the Average Prime Offered Rate (APOR)? - answer An index that is published weekly. It is added to High Cost and High Priced Triggers.
Who publishes the Average Prime Offered Rate (APOR) index? - answer Federal Financial Institutions Examination Council (FFIEC)
What is the regulation for High Cost Loans? - answer Section 1026.32 (Section 32)
What are the three triggers for High Cost Lending? - answer 6.5% on a first mortgage, 8.5% on a second mortgage, and a 5% fee trigger for loans over $20,000.
What are the triggers for High Priced Lending? - answer 1.5% for a first mortgage, 3.5% for a second mortgage, and no fee trigger. How do you calculate whether a loan exceeds the High Priced Mortgage limits? - answer Add the APOR index to 1.5% on a first mortgage + the Annual Percentage. The rate (APR) cannot exceed this.
What are the requirements for a High Cost Loan? - answer Tax & Insurance escrows
for the first 5 years of the loan; mandatory counselling; possibly 2 appraisals. Cannot use an Appraisal Waiver. No balloons allowed.
What are the requirements for a High Priced Loan? - answer Tax & Insurance escrows for the first 5 years of the loan; cannot use an Appraisal Waiver
Pre-Payment penalties are not allowed by which agencies? - answer FannieMae, FreddieMac, USDA, FHA, VA
What is a Pre-Payment Penalty? - answer Occurs if the loan is paid off within the first
2 years.
What does ECOA stand for? - answer Equal Credit Opportunity Act
What is the Reg Letter for Equal Credit Opportunity Act (ECOA)? - answer B
What are the five parts of Equal Credit Opportunity Act (ECOA)? - answer Age, Discrimination, Underwriting, Appraisal, and Adverse Action
What is the minimum age under Equal Credit Opportunity Act (ECOA) to obtain a mortgage loan? - answer 18
Equal Credit Opportunity Act (ECOA) has discriminatory items, what can't you do with them? - answer Make or decline a loan
What are the discriminatory items under the Equal Credit Opportunity Act (ECOA)? - answer Sex, Marital Status, Race, Color, Age, Religion, National Origin, Public Assistance, and Sexual Orientation
What can you ask regarding marital status? - answer Married / Unmarried / Separated
What 4 areas should you never ask about? - answer Race, color, religion, & nationality
What is the requirement for public assistance? - answer Must be considered even though you may not be able to use it for qualifying
How long after a complete underwriting package is delivered to the underwriter does a decision have to be made? - answer 30 days - may be extended if package incomplete How many days before closing must the appraisal be delivered to the borrower? - answer 3 business days
How long after a loan is declined or cancelled does an Adverse Action notice have to be
sent? - answer 30 days
Under Fair Housing Act, what are 3 exceptions on discrimination compared to ECOA? - answer Disability, family status, and age
Why is Disability considered discriminatory under the Fair Housing Act? - answer Cannot discriminate because of mental / physical disability
Why is Familial Status considered discriminatory under the Fair Housing Act? - answer Cannot discriminate because of family size or pregnancy
Why is Age NOT considered discriminatory under the Fair Housing Act? - answer Reverse mortgages require borrower to be 62 or older; 55 and older subdivisions require borrower to be 55 or older
What is the Reg Letter for Fair Credit and Reporting Act (FCRA)? - answer B
How many free credit reports does every consumer have the right to get each year? - answer At least 1
Which credit score do you use when considering a borrower? - answer The middle of
the three
Which credit score do you use if the loan is declined because of credit and there are three borrowers? - answer Lowest of the middle score for all the borrowers
What additional information is required on the Credit Score Disclosure? - answer Contact information for all three credit bureaus
What are the three national Credit Agencies (CRAs)? - answer Experian, TransUnion, Equifax
Which law did the Fact Act amend? - answer Fair Credit Report Act (FCRA)
What is a fraud alert? - answer A notation on the credit report indicating the borrower
may have had their identity stolen
What happens with a Credit Freeze? - answer No one may access the borrower's credit report
What is the cost for a Fraud Alert or Credit Freeze? - answer Zero
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