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 bars creditors from weighing non-credit factors in decisions.

Sometimes

Only on auto loans

False

True

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

Delivering the LE and Closing Disclosures on schedule

Providing a Loan Estimate within three business days

Waiting two weeks to deliver the LE

Accepting a kickback for referrals

3) HMDA’s main focus is to:

Elect an industry president

Publish a national “How-to-lend” guide

Require data reporting to fight housing discrimination

Mandate annual meetings with the Fed

4) The 2015 HMDA rule required reporting of:

Applicant names/addresses

Removal of applicant demographics

Public posting of all LARs for the first time

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

5) Why did Congress pass RESPA?

Limit escrow abuses and ban kickbacks/referral fees

Let homeowners settle disputes out of court

Give lenders greater negotiating freedom

Protect banks’ capital reserves

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

Only if payment is under $15

True

Only if the buyer approves

False

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

Six months

Three days

Contracts are final

One week

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

It depends

Yes

Never

9) ECOA’s core purpose is to:

Standardize fees

B & C

Outlaw discrimination by creditors against any applicant

Ensure equal pay for lenders

10) Which application types are not HMDA-reportable?

A & C

Family vacation-home loans

Closed-end mortgages

Open-end lines of credit

11) Institutions must report which application types?

Home-improvement loans

All of the above

Mortgage loans

Refinances

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

True

Only on mortgages

Only on credit cards

False

13) Regulation Z requires lenders to:

Define criminal penalties

Delay disclosures until after signing

Present credit terms in clear language

Repeal the 2012 gift-card rule

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

Applicant race/ethnicity and reasons for denial

Applicant names and addresses only

Ideas for law improvement

Daily business diaries

15) TILA became law on:

June 12 1977

Feb 23 1955

Jan 1 2008

May 29 1968

16) RESPA protections apply primarily to:

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

Agricultural-purpose mortgages

Business-purpose mortgages

Prospective home-purchase borrowers only

17) Regulation M under TILA primarily:

Details penalties for violations

A & C

Explains consumer-leasing disclosure requirements

Tells consumers how to enforce TILA

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

Always has an ARM rate

May be re-borrowed like a credit line

Cannot be prepaid, renegotiated, or refinanced without penalties

Always has a fixed rate

19) HMDA became law in:

1988

1975

2008

1940

20) ECOA requires creditors to:

Treat applicants equally

Base decisions on credit factors only

All of the above

Avoid discouraging protected applicants

21) TILA outlaws:

All of the above

High-pressure sales

Misrepresentation and nondisclosure

Unfair credit billing

22) Under ECOA, consumers may:

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

Demand special credit terms

A & B

Obtain lenders’ entire client list

23) Since 2010, RESPA has been enforced by:

Individual state governments

Consumer Financial Protection Bureau (CFPB)

Department of Housing and Urban Development (HUD)

The President

24) ECOA prohibits discrimination based on:

Gender, nationality, race

Age

All of the above

Religion

25) Maximum penalties for TILA violations may include:

A & B

Up to one year in jail

Lifetime lending ban only

Up to $5 000 fine

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

Borrowers suing for RESPA damages

Refusing to require a certain insurer as a loan condition

A lender advertising a settlement provider in exchange for referral fees

Keeping required disclosure records

27) Withdrawn applications must be reported to HMDA.

Only for denied applications

Yes

Only loans over $1 million

28) When was RESPA enacted?

1974

1972

1988

1955

29) ECOA became law in:

2009

1953

1942

1974

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

Publicly disclosing aggregate data

Accurate, complete data submissions

Following regulated mortgage practices

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

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

No, only to payday lenders

False

True

Only for big banks

32) HMDA data are submitted via:

State governor’s office

FFIEC/CFPB HMDA website portal

July 1 in-person drop-off

Email to HUD

33) Which is NOT ECOA non-compliance?

Denying credit without explaining why

Refusing an applicant because of race

Denying because applicant receives public assistance

Maintaining required records of applications

34) Failure to report HMDA data can result in:

Warnings and resubmission requests

Civil money penalties

All of the above

Prison for egregious cases

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

Allowed average-cost pricing

Mandated transparency of broker fees

Added comparative-shopping disclosures

Let consumers dictate the exact prices lenders may charge

36) RESPA primarily reduces or eliminates the cost of:

B & C

Directly subsidized service fees

Excess service fees tied to escrow accounts

Government-funded closing grants

37) Thanks to TILA, consumers may:

Terminate an unfavorable agreement within legal limits

Obtain lenders’ client lists

A & B

Make informed credit decisions

38) Which is NOT HMDA non-compliance?

Keeping and submitting complete mortgage data

Missing the annual submission deadline

Denying loans based on neighborhood (redlining)

Failing to collect or report any data

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

Delivering right-to-rescind notice

Judging ability to repay in good faith

False advertising to attract borrowers

Clear fee disclosures

40) Which is NOT TILA non-compliance?

Adding undisclosed junk fees

Influencing an appraiser’s value

Incorrect or missing disclosures

Clear disclosures to clients

41) TILA requires mortgage professionals to:

Provide service details

Negotiate every contract

Disclose product information

A & B

42) “Creditor” under ECOA includes:

All of the above

Banks/credit issuers

Third-party loan companies

Individuals who lend money

43) RESPA enforcement may include:

Fines, license loss, or jail for violators

Universal standards for brokers and lenders

Consumer complaints to CFPB

All of the above

44) Which is an ECOA violation?

Approving because applicant is the same race as the lender

Approving despite different religion

Denying due to low credit score

Giving clear adverse-action reasons

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

Complete removal of all service fees

State-level rather than federal enforcement

Tougher criminal penalties only

Full disclosure of servicing transfers, sales, or assignments

46) 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 intend to use it for approval

They plan to market products

47) How does RESPA protect the consumer?

Lenders must disclose every settlement cost and eliminate kickbacks

Allows lenders to hide fee breakdowns

Requires a third-party arbiter on every file

Consumers must file all documents with a judge

Your score is

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