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

Contracts are final

Three days

Six months

One week

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) 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

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

Sometimes

Only on auto loans

False

True

5) The 2015 HMDA rule required reporting of:

Removal of applicant demographics

Public posting of all LARs for the first time

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

Applicant names/addresses

6) “Creditor” under ECOA includes:

Banks/credit issuers

Individuals who lend money

All of the above

Third-party loan companies

7) ECOA became law in:

1942

1953

1974

2009

8) Withdrawn applications must be reported to HMDA.

Only for denied applications

Only loans over $1 million

Yes

9) Under ECOA, consumers may:

Obtain lenders’ entire client list

Demand special credit terms

A & B

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

10) Since 2010, RESPA has been enforced by:

Department of Housing and Urban Development (HUD)

The President

Individual state governments

Consumer Financial Protection Bureau (CFPB)

11) RESPA enforcement may include:

Universal standards for brokers and lenders

Consumer complaints to CFPB

All of the above

Fines, license loss, or jail for violators

12) Maximum penalties for TILA violations may include:

Up to one year in jail

Up to $5 000 fine

Lifetime lending ban only

A & B

13) Which is NOT TILA non-compliance?

Adding undisclosed junk fees

Influencing an appraiser’s value

Clear disclosures to clients

Incorrect or missing disclosures

14) 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

15) Thanks to TILA, consumers may:

Obtain lenders’ client lists

A & B

Make informed credit decisions

Terminate an unfavorable agreement within legal limits

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

Never permitted

They intend to use it for approval

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

They plan to market products

17) HMDA’s main focus is to:

Require data reporting to fight housing discrimination

Publish a national “How-to-lend” guide

Elect an industry president

Mandate annual meetings with the Fed

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

Added comparative-shopping disclosures

Mandated transparency of broker fees

Allowed average-cost pricing

Let consumers dictate the exact prices lenders may charge

19) TILA requires mortgage professionals to:

A & B

Provide service details

Negotiate every contract

Disclose product information

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

Always has a fixed rate

May be re-borrowed like a credit line

Cannot be prepaid, renegotiated, or refinanced without penalties

Always has an ARM rate

21) Institutions must report which application types?

Mortgage loans

Home-improvement loans

Refinances

All of the above

22) Which is an ECOA violation?

Approving despite different religion

Denying due to low credit score

Giving clear adverse-action reasons

Approving because applicant is the same race as the lender

23) Regulation Z requires lenders to:

Delay disclosures until after signing

Define criminal penalties

Repeal the 2012 gift-card rule

Present credit terms in clear language

24) Which is NOT HMDA non-compliance?

Keeping and submitting complete mortgage data

Failing to collect or report any data

Denying loans based on neighborhood (redlining)

Missing the annual submission deadline

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

Clear fee disclosures

False advertising to attract borrowers

Delivering right-to-rescind notice

Judging ability to repay in good faith

26) 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

Keeping required disclosure records

Borrowers suing for RESPA damages

27) 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

28) HMDA data are submitted via:

FFIEC/CFPB HMDA website portal

Email to HUD

State governor’s office

July 1 in-person drop-off

29) ECOA’s core purpose is to:

B & C

Ensure equal pay for lenders

Outlaw discrimination by creditors against any applicant

Standardize fees

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

Yes

Never

It depends

31) 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

32) Which is NOT ECOA non-compliance?

Maintaining required records of applications

Denying credit without explaining why

Refusing an applicant because of race

Denying because applicant receives public assistance

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

Only on mortgages

True

Only on credit cards

False

34) When was RESPA enacted?

1988

1955

1972

1974

35) TILA outlaws:

High-pressure sales

Misrepresentation and nondisclosure

Unfair credit billing

All of the above

36) HMDA became law in:

1940

1988

1975

2008

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

Full disclosure of servicing transfers, sales, or assignments

Tougher criminal penalties only

State-level rather than federal enforcement

Complete removal of all service fees

38) Regulation M under TILA primarily:

A & C

Explains consumer-leasing disclosure requirements

Tells consumers how to enforce TILA

Details penalties for violations

39) ECOA requires creditors to:

Avoid discouraging protected applicants

Treat applicants equally

All of the above

Base decisions on credit factors only

40) TILA became law on:

June 12 1977

Jan 1 2008

Feb 23 1955

May 29 1968

41) RESPA protections apply primarily to:

Prospective home-purchase borrowers only

Agricultural-purpose mortgages

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

Business-purpose mortgages

42) 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

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

Only for big banks

No, only to payday lenders

False

True

44) Failure to report HMDA data can result in:

All of the above

Warnings and resubmission requests

Civil money penalties

Prison for egregious cases

45) Which application types are not HMDA-reportable?

Open-end lines of credit

A & C

Closed-end mortgages

Family vacation-home loans

46) ECOA prohibits discrimination based on:

Religion

Age

Gender, nationality, race

All of the above

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

Accepting a kickback for referrals

Delivering the LE and Closing Disclosures on schedule

Waiting two weeks to deliver the LE

Providing a Loan Estimate within three business days

Your score is

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