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...
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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