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 is an example of HMDA non-compliance?

Accurate, complete data submissions

Publicly disclosing aggregate data

Following regulated mortgage practices

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

2) Failure to report HMDA data can result in:

All of the above

Prison for egregious cases

Civil money penalties

Warnings and resubmission requests

3) ECOA prohibits discrimination based on:

Age

Religion

All of the above

Gender, nationality, race

4) Thanks to TILA, consumers may:

Terminate an unfavorable agreement within legal limits

Make informed credit decisions

A & B

Obtain lenders’ client lists

5) Regulation M under TILA primarily:

Tells consumers how to enforce TILA

Explains consumer-leasing disclosure requirements

A & C

Details penalties for violations

6) Why did Congress pass RESPA?

Give lenders greater negotiating freedom

Limit escrow abuses and ban kickbacks/referral fees

Protect banks’ capital reserves

Let homeowners settle disputes out of court

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

True

False

Only for big banks

No, only to payday lenders

8) Withdrawn applications must be reported to HMDA.

Only loans over $1 million

Only for denied applications

Yes

9) Since 2010, RESPA has been enforced by:

Individual state governments

Department of Housing and Urban Development (HUD)

Consumer Financial Protection Bureau (CFPB)

The President

10) Which is NOT TILA non-compliance?

Influencing an appraiser’s value

Clear disclosures to clients

Adding undisclosed junk fees

Incorrect or missing disclosures

11) ECOA requires creditors to:

Base decisions on credit factors only

Avoid discouraging protected applicants

All of the above

Treat applicants equally

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) TILA outlaws:

High-pressure sales

Unfair credit billing

All of the above

Misrepresentation and nondisclosure

14) The 2015 HMDA rule required reporting of:

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

Applicant names/addresses

Public posting of all LARs for the first time

Removal of applicant demographics

15) Which is NOT HMDA non-compliance?

Missing the annual submission deadline

Failing to collect or report any data

Denying loans based on neighborhood (redlining)

Keeping and submitting complete mortgage data

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

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

They plan to market products

They intend to use it for approval

Never permitted

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

Waiting two weeks to deliver the LE

Accepting a kickback for referrals

Providing a Loan Estimate within three business days

Delivering the LE and Closing Disclosures on schedule

18) HMDA data are submitted via:

State governor’s office

FFIEC/CFPB HMDA website portal

July 1 in-person drop-off

Email to HUD

19) Institutions must report which application types?

Home-improvement loans

All of the above

Refinances

Mortgage loans

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

Three days

One week

Contracts are final

Six months

21) “Creditor” under ECOA includes:

Banks/credit issuers

All of the above

Individuals who lend money

Third-party loan companies

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

Applicant race/ethnicity and reasons for denial

Daily business diaries

Applicant names and addresses only

Ideas for law improvement

23) Which is NOT ECOA non-compliance?

Maintaining required records of applications

Refusing an applicant because of race

Denying because applicant receives public assistance

Denying credit without explaining why

24) TILA became law on:

Jan 1 2008

June 12 1977

May 29 1968

Feb 23 1955

25) Regulation Z requires lenders to:

Delay disclosures until after signing

Present credit terms in clear language

Define criminal penalties

Repeal the 2012 gift-card rule

26) Under ECOA, consumers may:

Demand special credit terms

Obtain lenders’ entire client list

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

A & B

27) 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

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

Allowed average-cost pricing

Added comparative-shopping disclosures

Let consumers dictate the exact prices lenders may charge

Mandated transparency of broker fees

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

Only on credit cards

False

True

Only on mortgages

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

False

True

Only on auto loans

Sometimes

31) Which application types are not HMDA-reportable?

Closed-end mortgages

Open-end lines of credit

Family vacation-home loans

A & C

32) 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

33) ECOA’s core purpose is to:

Ensure equal pay for lenders

B & C

Standardize fees

Outlaw discrimination by creditors against any applicant

34) HMDA’s main focus is to:

Publish a national “How-to-lend” guide

Mandate annual meetings with the Fed

Require data reporting to fight housing discrimination

Elect an industry president

35) ECOA became law in:

2009

1974

1942

1953

36) When was RESPA enacted?

1955

1972

1988

1974

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

It depends

Never

Yes

38) RESPA enforcement may include:

All of the above

Fines, license loss, or jail for violators

Consumer complaints to CFPB

Universal standards for brokers and lenders

39) How does RESPA protect the consumer?

Allows lenders to hide fee breakdowns

Lenders must disclose every settlement cost and eliminate kickbacks

Consumers must file all documents with a judge

Requires a third-party arbiter on every file

40) Maximum penalties for TILA violations may include:

Up to $5 000 fine

Up to one year in jail

Lifetime lending ban only

A & B

41) RESPA protections apply primarily to:

Agricultural-purpose mortgages

Prospective home-purchase borrowers only

Business-purpose mortgages

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

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

False

Only if payment is under $15

True

Only if the buyer approves

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

Cannot be prepaid, renegotiated, or refinanced without penalties

Always has a fixed rate

May be re-borrowed like a credit line

Always has an ARM rate

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

A lender advertising a settlement provider in exchange for referral fees

Refusing to require a certain insurer as a loan condition

Borrowers suing for RESPA damages

Keeping required disclosure records

45) HMDA became law in:

1988

1975

1940

2008

46) TILA requires mortgage professionals to:

Negotiate every contract

A & B

Disclose product information

Provide service details

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

Delivering right-to-rescind notice

Clear fee disclosures

False advertising to attract borrowers

Judging ability to repay in good faith

Your score is

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