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) Institutions must report which application types?

Refinances

Home-improvement loans

Mortgage loans

All of the above

2) Which is NOT TILA non-compliance?

Incorrect or missing disclosures

Influencing an appraiser’s value

Clear disclosures to clients

Adding undisclosed junk fees

3) Regulation Z requires lenders to:

Present credit terms in clear language

Define criminal penalties

Repeal the 2012 gift-card rule

Delay disclosures until after signing

4) Which is an ECOA violation?

Giving clear adverse-action reasons

Approving despite different religion

Denying due to low credit score

Approving because applicant is the same race as the lender

5) ECOA’s core purpose is to:

B & C

Ensure equal pay for lenders

Standardize fees

Outlaw discrimination by creditors against any applicant

6) TILA became law on:

June 12 1977

Feb 23 1955

Jan 1 2008

May 29 1968

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

Never permitted

They plan to market products

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

They intend to use it for approval

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

True

No, only to payday lenders

Only for big banks

False

9) RESPA protections apply primarily to:

Prospective home-purchase borrowers only

Agricultural-purpose mortgages

Business-purpose mortgages

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

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

Only on mortgages

False

Only on credit cards

True

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

Three days

Contracts are final

Six months

One week

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

False

Sometimes

True

Only on auto loans

13) Failure to report HMDA data can result in:

All of the above

Prison for egregious cases

Warnings and resubmission requests

Civil money penalties

14) How does RESPA protect the consumer?

Requires a third-party arbiter on every file

Consumers must file all documents with a judge

Lenders must disclose every settlement cost and eliminate kickbacks

Allows lenders to hide fee breakdowns

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

True

Only if payment is under $15

Only if the buyer approves

False

16) ECOA prohibits discrimination based on:

Age

All of the above

Religion

Gender, nationality, race

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

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

Publicly disclosing aggregate data

Following regulated mortgage practices

Accurate, complete data submissions

18) HMDA data are submitted via:

Email to HUD

State governor’s office

FFIEC/CFPB HMDA website portal

July 1 in-person drop-off

19) Which is NOT ECOA non-compliance?

Refusing an applicant because of race

Denying because applicant receives public assistance

Maintaining required records of applications

Denying credit without explaining why

20) Thanks to TILA, consumers may:

A & B

Obtain lenders’ client lists

Terminate an unfavorable agreement within legal limits

Make informed credit decisions

21) RESPA enforcement may include:

All of the above

Universal standards for brokers and lenders

Fines, license loss, or jail for violators

Consumer complaints to CFPB

22) RESPA primarily reduces or eliminates the cost of:

Excess service fees tied to escrow accounts

Government-funded closing grants

B & C

Directly subsidized service fees

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

State-level rather than federal enforcement

Full disclosure of servicing transfers, sales, or assignments

Complete removal of all service fees

Tougher criminal penalties only

24) TILA requires mortgage professionals to:

Disclose product information

A & B

Provide service details

Negotiate every contract

25) Which application types are not HMDA-reportable?

A & C

Closed-end mortgages

Family vacation-home loans

Open-end lines of credit

26) 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

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

Yes

Never

It depends

28) “Creditor” under ECOA includes:

Individuals who lend money

Third-party loan companies

All of the above

Banks/credit issuers

29) Which is NOT HMDA non-compliance?

Failing to collect or report any data

Missing the annual submission deadline

Keeping and submitting complete mortgage data

Denying loans based on neighborhood (redlining)

30) Why did Congress pass RESPA?

Protect banks’ capital reserves

Give lenders greater negotiating freedom

Limit escrow abuses and ban kickbacks/referral fees

Let homeowners settle disputes out of court

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

Ideas for law improvement

Applicant race/ethnicity and reasons for denial

Applicant names and addresses only

Daily business diaries

32) Regulation M under TILA primarily:

Details penalties for violations

Tells consumers how to enforce TILA

A & C

Explains consumer-leasing disclosure requirements

33) Under ECOA, consumers may:

Obtain lenders’ entire client list

A & B

Demand special credit terms

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

34) Withdrawn applications must be reported to HMDA.

Only loans over $1 million

Yes

Only for denied applications

35) ECOA requires creditors to:

All of the above

Base decisions on credit factors only

Treat applicants equally

Avoid discouraging protected applicants

36) HMDA became law in:

1988

2008

1940

1975

37) 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

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

Mandated transparency of broker fees

Let consumers dictate the exact prices lenders may charge

Allowed average-cost pricing

Added comparative-shopping disclosures

39) Maximum penalties for TILA violations may include:

Lifetime lending ban only

Up to one year in jail

Up to $5 000 fine

A & B

40) The 2015 HMDA rule required reporting of:

Public posting of all LARs for the first time

Applicant names/addresses

Removal of applicant demographics

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

41) TILA outlaws:

High-pressure sales

Misrepresentation and nondisclosure

Unfair credit billing

All of the above

42) ECOA became law in:

1953

1942

2009

1974

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

A lender advertising a settlement provider in exchange for referral fees

Keeping required disclosure records

Refusing to require a certain insurer as a loan condition

Borrowers suing for RESPA damages

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

Cannot be prepaid, renegotiated, or refinanced without penalties

Always has an ARM rate

Always has a fixed rate

May be re-borrowed like a credit line

45) When was RESPA enacted?

1974

1955

1972

1988

46) Since 2010, RESPA has been enforced by:

Department of Housing and Urban Development (HUD)

Consumer Financial Protection Bureau (CFPB)

The President

Individual state governments

47) 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

Your score is

See also: