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) ECOA became law in:

1974

2009

1953

1942

2) When was RESPA enacted?

1955

1974

1972

1988

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

True

Only on mortgages

Only on credit cards

False

4) HMDA’s main focus is to:

Require data reporting to fight housing discrimination

Mandate annual meetings with the Fed

Elect an industry president

Publish a national “How-to-lend” guide

5) Which is an ECOA violation?

Approving despite different religion

Approving because applicant is the same race as the lender

Giving clear adverse-action reasons

Denying due to low credit score

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

Never

Yes

It depends

7) TILA became law on:

Jan 1 2008

May 29 1968

June 12 1977

Feb 23 1955

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

Only if the buyer approves

Only if payment is under $15

False

True

9) How does RESPA protect the consumer?

Lenders must disclose every settlement cost and eliminate kickbacks

Allows lenders to hide fee breakdowns

Consumers must file all documents with a judge

Requires a third-party arbiter on every file

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

Only for big banks

True

No, only to payday lenders

False

11) Failure to report HMDA data can result in:

Warnings and resubmission requests

Prison for egregious cases

All of the above

Civil money penalties

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

Following regulated mortgage practices

Accurate, complete data submissions

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

Publicly disclosing aggregate data

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

Ideas for law improvement

Daily business diaries

Applicant names and addresses only

Applicant race/ethnicity and reasons for denial

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

Providing a Loan Estimate within three business days

Accepting a kickback for referrals

Waiting two weeks to deliver the LE

Delivering the LE and Closing Disclosures on schedule

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

May be re-borrowed like a credit line

Always has a fixed rate

Always has an ARM rate

Cannot be prepaid, renegotiated, or refinanced without penalties

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

Mandated transparency of broker fees

Allowed average-cost pricing

Let consumers dictate the exact prices lenders may charge

Added comparative-shopping disclosures

17) ECOA prohibits discrimination based on:

Religion

All of the above

Gender, nationality, race

Age

18) ECOA’s core purpose is to:

Outlaw discrimination by creditors against any applicant

B & C

Standardize fees

Ensure equal pay for lenders

19) Regulation Z requires lenders to:

Define criminal penalties

Present credit terms in clear language

Delay disclosures until after signing

Repeal the 2012 gift-card rule

20) TILA outlaws:

High-pressure sales

Unfair credit billing

Misrepresentation and nondisclosure

All of the above

21) Since 2010, RESPA has been enforced by:

The President

Department of Housing and Urban Development (HUD)

Individual state governments

Consumer Financial Protection Bureau (CFPB)

22) Regulation M under TILA primarily:

A & C

Tells consumers how to enforce TILA

Explains consumer-leasing disclosure requirements

Details penalties for violations

23) HMDA became law in:

1988

2008

1975

1940

24) RESPA protections apply primarily to:

Agricultural-purpose mortgages

Business-purpose mortgages

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

Prospective home-purchase borrowers only

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

Judging ability to repay in good faith

False advertising to attract borrowers

Delivering right-to-rescind notice

Clear fee disclosures

26) Withdrawn applications must be reported to HMDA.

Yes

Only for denied applications

Only loans over $1 million

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

State-level rather than federal enforcement

Full disclosure of servicing transfers, sales, or assignments

Tougher criminal penalties only

Complete removal of all service fees

28) “Creditor” under ECOA includes:

Individuals who lend money

Banks/credit issuers

All of the above

Third-party loan companies

29) RESPA enforcement may include:

Consumer complaints to CFPB

All of the above

Universal standards for brokers and lenders

Fines, license loss, or jail for violators

30) Which application types are not HMDA-reportable?

A & C

Closed-end mortgages

Open-end lines of credit

Family vacation-home loans

31) ECOA requires creditors to:

Avoid discouraging protected applicants

All of the above

Treat applicants equally

Base decisions on credit factors only

32) Which is NOT HMDA non-compliance?

Missing the annual submission deadline

Denying loans based on neighborhood (redlining)

Failing to collect or report any data

Keeping and submitting complete mortgage data

33) Under ECOA, consumers may:

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

Obtain lenders’ entire client list

Demand special credit terms

A & B

34) Which is NOT TILA non-compliance?

Adding undisclosed junk fees

Influencing an appraiser’s value

Clear disclosures to clients

Incorrect or missing disclosures

35) Institutions must report which application types?

All of the above

Refinances

Mortgage loans

Home-improvement loans

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

Never permitted

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

They plan to market products

They intend to use it for approval

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

True

False

Sometimes

Only on auto loans

38) Which is NOT ECOA non-compliance?

Maintaining required records of applications

Refusing an applicant because of race

Denying credit without explaining why

Denying because applicant receives public assistance

39) The 2015 HMDA rule required reporting of:

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

Removal of applicant demographics

Applicant names/addresses

Public posting of all LARs for the first time

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

Six months

Contracts are final

Three days

One week

41) TILA requires mortgage professionals to:

Disclose product information

Provide service details

Negotiate every contract

A & B

42) Thanks to TILA, consumers may:

Terminate an unfavorable agreement within legal limits

Make informed credit decisions

A & B

Obtain lenders’ client lists

43) Why did Congress pass RESPA?

Let homeowners settle disputes out of court

Protect banks’ capital reserves

Limit escrow abuses and ban kickbacks/referral fees

Give lenders greater negotiating freedom

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

Refusing to require a certain insurer as a loan condition

A lender advertising a settlement provider in exchange for referral fees

Borrowers suing for RESPA damages

Keeping required disclosure records

45) RESPA primarily reduces or eliminates the cost of:

Directly subsidized service fees

Government-funded closing grants

B & C

Excess service fees tied to escrow accounts

46) Maximum penalties for TILA violations may include:

Up to $5 000 fine

Lifetime lending ban only

Up to one year in jail

A & B

47) HMDA data are submitted via:

July 1 in-person drop-off

Email to HUD

FFIEC/CFPB HMDA website portal

State governor’s office

Your score is

See also: