Exam (elaborations)
NMLS EXAM QUESTIONS AND ANSWERS
NMLS EXAM QUESTIONS AND ANSWERS
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NMLS EXAM QUESTIONS AND ANSWERSThe preferred debt-to-income ratio for applicants for VA loans is:
A. 35%
B. 43%
C. 50%
D. 41% - Answers -D. 41%
When would a license be suspended without a hearing?
A. If a licensee fails to renew
B. If a licensee fails to request a hearing with the state regulator
C. If a licensee has failed to complete pre-licensing requirements
D. If a licensee has already executed a right to a hearing for a previous violation -
Answers -B. If a licensee fails to request a hearing with the state regulator
After a borrower allows the assumption of his or her VA loan, he or she may use his or
her VA privilege again only after:
A. Five years have passed
B. The home is sold to a new owner
C. The original VA loan is satisfied
D. The original VA loan is moved from his or her name into the name of the assuming
borrower - Answers -C. The original VA loan is satisfied
In order to qualify for an adjustable-rate mortgage, a consumer must be able to show
that he or she can:
A. Make regularly scheduled payments that are calculated using the loan's introductory
rate
B. Make amortizing payments that are calculated using the fully indexed rate for the
ARM
C. Make amortizing payments that are calculated using the loan's rate after the first
interest rate adjustment occurs
D. Make regularly scheduled payments that are calculated using the fixed interest rate
for which the consumer would be eligible - Answers -B. Make amortizing payments that
are calculated using the fully indexed rate for the ARM
Money paid by a buyer to a seller at the time of entering into a contract to indicate intent
and ability to carry out the contract is called:
A. Down payment
B. Earnest money
C. Escrow funds
D. Service release premium - Answers -B. Earnest money
The Pois have just closed on their mortgage loan at a formal settlement meeting. What
is mortgage loan originator Leilani Luau's responsibility after loan closing?
A. She must provide any required re-disclosures
B. None; Leilani's tasks are complete
,C. She must provide another set of disclosures, showing final costs and expenses
D. She must record the transaction with the county recorder - Answers -B. None;
Leilani's tasks are complete
In order for a small creditor to originate a balloon payment qualified mortgage, the small
creditor must hold the loan in its portfolio for:
A. Twelve months
B. Three years
C. Two years
D. Five years - Answers -B. Three years
"Equity" is defined as:
A. The difference between the fair market value of a property and the current balances
of any liens
B. The difference between the appraised value and the purchase price
C. The relationship between the value of the house and a borrower's assets
D. The balance of any liens divided by the proposed value of any new loan - Answers -
A. The difference between the fair market value of a property and the current balances
of any liens
The Dodd-Frank Act listed the creation of financial education programs as one of the
primary functions of:
A. NMLS
B. CFPB
C. FHA
D. HUD - Answers -B. CFPB
Which of the following may be considered an appraisal red flag?
A. An appraiser's resume shows substantial experience in the area
B. Property owner and seller are not the same
C. Appraisal is dated after the sales contract
D. Comparables are located within one mile of the subject - Answers -B. Property owner
and seller are not the same
All of the following requirements are applicable to HECMs, except:
A. The loan must be secured by the borrower's principal residence
B. The applicant must complete a consumer information session on reverse mortgages
loans
C. The applicant must not have an existing mortgage on the residence
D. The applicant must be at least 62 years old - Answers -C. The applicant must not
have an existing mortgage on the residence
If a foreclosure proceeding has been initiated by a creditor, the borrower may exercise
his/her three-year right to rescind if the finance charge for the loan was understated by:
A. $35
, B. $10
C. More than $35
D. More than $100 - Answers -C. More than $35
A first-lien mortgage loan will exceed the HOEPA APR threshold and qualify as a high-
cost mortgage if its APR is:
A. 1.5 percentage points above the average prime offer rate for a comparable
transaction
B. 6.5 percentage points above the average prime offer rate for a comparable
transaction
C. 3 percentage points above the average prime offer rate for a comparable transaction
D. 4.5 percentage points above the average prime offer rate for a comparable
transaction - Answers -B. 6.5 percentage points above the average prime offer rate for a
comparable transaction
If a consumer submits a complaint about a mortgage lender to the CFPB, the lender has
_____ days to respond before the CFPB publishes the complaint in its public complaint
database and pursues a potential investigation.
A. 7
B. 10
C. 20
D. 15 - Answers -D. 15
Which of the following is not a characteristic of an HPML?
A. It is secured by the borrower's principal dwelling
B. It has an APR that exceeds the average prime offer rate by 1.5 percentage points for
a loan secured by a first lien on the home
C. It has an APR that exceeds the average prime offer rate by 3.5 percentage points for
a loan secured by a subordinate lien on the home
D. It has an APR that exceeds the rate for Treasury securities with a comparable rate of
maturity by 6.5 percentage points - Answers -D. It has an APR that exceeds the rate for
Treasury securities with a comparable rate of maturity by 6.5 percentage points
All of the following are considered involuntary liens, except:
A. Mortgage
B. Mechanic's lien
C. Tax lien
D. Judgment - Answers -A. Mortgage
An involuntary lien is "imposed" on a borrower. In the case of a mortgage, a borrower
would "consent" to having a lien on his/her home.
Which of the following is not permitted for a HOEPA loan?
A. Documenting a borrower's ability to repay the loan
B. Requiring a balloon payment after the first five years
C. Refinancing into another HOEPA loan within 12 months if it is in the borrower's best
interest
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