NMLS Federal Mortgage Practice Test Questions 2025

Last Updated on June 23, 2025

NMLS Federal Mortgage Practice Test Questions 2025. The Nationwide Multistate Licensing System (formerly known as the Nationwide Mortgage Licensing System) has a Federal Mortgage-Related Laws section with a 24% rate.

There are currently five different federal loans that are federally backed. These are FHA, VA, USDA, Freddie Mac, and Fannie Mae loans. Since 2008, federal mortgage-related laws and regulations have undergone a comprehensive overhaul, incorporating updates and enhancements to the existing rules, including the implementation of the NMLS license and exam requirements.

These changes and present-day laws on a federal level will be essential to know inside and out, so in this chapter, you will be tested on your knowledge related to these very topics.

A. The Real Estate Settlement Procedures Act (RESPA)
B. The Truth in Lending Act (TILA)
C. The Home Mortgage Disclosure Act (HMDA)
D. The Equal Credit Opportunity Act (ECOA)
E. the Fair Housing Act (FHA)
F. the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)
G. The Consumer Financial Protection Bureau (CFPB) regulations

NMLS Federal Mortgage Practice Test

NMLS Federal Mortgage Practice Test Questions

1) Which action is an example of RESPA non-compliance?

A lender advertising a settlement provider in exchange for referral fees

Keeping required disclosure records

Borrowers suing for RESPA damages

Refusing to require a certain insurer as a loan condition

2) A real-estate agent receiving payment for a referral violates RESPA.

False

True

Only if payment is under $15

Only if the buyer approves

3) TILA regulations apply to most kinds of consumer credit.

True

False

Only on mortgages

Only on credit cards

4) Which is NOT HMDA non-compliance?

Keeping and submitting complete mortgage data

Denying loans based on neighborhood (redlining)

Failing to collect or report any data

Missing the annual submission deadline

5) Regulation M under TILA primarily:

Explains consumer-leasing disclosure requirements

Tells consumers how to enforce TILA

A & C

Details penalties for violations

6) Since 2010, RESPA has been enforced by:

Department of Housing and Urban Development (HUD)

Individual state governments

Consumer Financial Protection Bureau (CFPB)

The President

7) TILA became law on:

June 12 1977

Feb 23 1955

Jan 1 2008

May 29 1968

8) Withdrawn applications must be reported to HMDA.

Only loans over $1 million

Yes

Only for denied applications

9) Which of the following is NOT an amendment to RESPA?

Allowed average-cost pricing

Mandated transparency of broker fees

Let consumers dictate the exact prices lenders may charge

Added comparative-shopping disclosures

10) HMDA’s main focus is to:

Mandate annual meetings with the Fed

Elect an industry president

Require data reporting to fight housing discrimination

Publish a national “How-to-lend” guide

11) A “closed-end mortgage loan” is best defined as one that:

Always has a fixed rate

Cannot be prepaid, renegotiated, or refinanced without penalties

May be re-borrowed like a credit line

Always has an ARM rate

12) The Housing Act of 1990 amended RESPA to require:

Complete removal of all service fees

Tougher criminal penalties only

Full disclosure of servicing transfers, sales, or assignments

State-level rather than federal enforcement

13) RESPA primarily reduces or eliminates the cost of:

Directly subsidized service fees

Government-funded closing grants

Excess service fees tied to escrow accounts

B & C

14) ECOA became law in:

2009

1942

1974

1953

15) Which is NOT TILA non-compliance?

Clear disclosures to clients

Influencing an appraiser’s value

Incorrect or missing disclosures

Adding undisclosed junk fees

16) HMDA became law in:

1940

2008

1975

1988

17) Which is NOT an example of RESPA non-compliance?

Providing a Loan Estimate within three business days

Waiting two weeks to deliver the LE

Delivering the LE and Closing Disclosures on schedule

Accepting a kickback for referrals

18) Which is an ECOA violation?

Approving because applicant is the same race as the lender

Denying due to low credit score

Approving despite different religion

Giving clear adverse-action reasons

19) Why did Congress pass RESPA?

Limit escrow abuses and ban kickbacks/referral fees

Protect banks’ capital reserves

Give lenders greater negotiating freedom

Let homeowners settle disputes out of court

20) TILA outlaws:

High-pressure sales

All of the above

Unfair credit billing

Misrepresentation and nondisclosure

21) Does TILA cover a $75 000 student loan?

Never

It depends

Yes

22) ECOA prohibits discrimination based on:

Age

Gender, nationality, race

All of the above

Religion

23) How does RESPA protect the consumer?

Requires a third-party arbiter on every file

Lenders must disclose every settlement cost and eliminate kickbacks

Consumers must file all documents with a judge

Allows lenders to hide fee breakdowns

24) Which is an example of TILA non-compliance?

False advertising to attract borrowers

Judging ability to repay in good faith

Clear fee disclosures

Delivering right-to-rescind notice

25) On the Loan Application Register (LAR), lenders must report:

Ideas for law improvement

Applicant race/ethnicity and reasons for denial

Daily business diaries

Applicant names and addresses only

26) ECOA bars creditors from weighing non-credit factors in decisions.

True

False

Sometimes

Only on auto loans

27) ECOA protections apply to traditional and non-traditional lenders alike.

False

Only for big banks

True

No, only to payday lenders

28) The 2015 HMDA rule required reporting of:

Applicant names/addresses

Open-end, dwelling-secured lines of credit (HELOCs)

Public posting of all LARs for the first time

Removal of applicant demographics

29) Which is NOT ECOA non-compliance?

Denying because applicant receives public assistance

Refusing an applicant because of race

Denying credit without explaining why

Maintaining required records of applications

30) Which application types are not HMDA-reportable?

A & C

Open-end lines of credit

Family vacation-home loans

Closed-end mortgages

31) ECOA requires creditors to:

Base decisions on credit factors only

Treat applicants equally

Avoid discouraging protected applicants

All of the above

32) Which is an example of HMDA non-compliance?

Denying applicants solely because they live in a “poor part of town”

Accurate, complete data submissions

Publicly disclosing aggregate data

Following regulated mortgage practices

33) “Creditor” under ECOA includes:

Third-party loan companies

Individuals who lend money

All of the above

Banks/credit issuers

34) Under ECOA, consumers may:

Ask why they were denied credit and sue if ECOA was violated

A & B

Obtain lenders’ entire client list

Demand special credit terms

35) TILA gives borrowers how long to rescind certain credit contracts?

Six months

Three days

Contracts are final

One week

36) Regulation Z requires lenders to:

Repeal the 2012 gift-card rule

Delay disclosures until after signing

Present credit terms in clear language

Define criminal penalties

37) Failure to report HMDA data can result in:

Civil money penalties

All of the above

Prison for egregious cases

Warnings and resubmission requests

38) RESPA enforcement may include:

Universal standards for brokers and lenders

All of the above

Consumer complaints to CFPB

Fines, license loss, or jail for violators

39) Maximum penalties for TILA violations may include:

Up to $5 000 fine

Lifetime lending ban only

A & B

Up to one year in jail

40) Institutions must report which application types?

All of the above

Refinances

Home-improvement loans

Mortgage loans

41) ECOA’s core purpose is to:

Outlaw discrimination by creditors against any applicant

Standardize fees

B & C

Ensure equal pay for lenders

42) When was RESPA enacted?

1974

1955

1988

1972

43) RESPA protections apply primarily to:

Business-purpose mortgages

Agricultural-purpose mortgages

Prospective home-purchase borrowers only

Home-purchase or refinance borrowers who are consumers (buyers and owners)

44) HMDA data are submitted via:

Email to HUD

State governor’s office

FFIEC/CFPB HMDA website portal

July 1 in-person drop-off

45) Thanks to TILA, consumers may:

A & B

Terminate an unfavorable agreement within legal limits

Make informed credit decisions

Obtain lenders’ client lists

46) TILA requires mortgage professionals to:

A & B

Provide service details

Negotiate every contract

Disclose product information

47) Creditors may ask an applicant’s race or gender only if:

They intend to use it for approval

They will ignore it in the decision and collect it for monitoring

They plan to market products

Never permitted

Your score is

See also: