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 outlaws:

Misrepresentation and nondisclosure

Unfair credit billing

High-pressure sales

All of the above

2) 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

3) ECOA became law in:

1953

2009

1942

1974

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

True

Only if the buyer approves

Only if payment is under $15

False

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

Six months

Contracts are final

Three days

One week

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

Publicly disclosing aggregate data

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

Following regulated mortgage practices

Accurate, complete data submissions

7) 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

8) When was RESPA enacted?

1955

1988

1972

1974

9) ECOA prohibits discrimination based on:

Age

Gender, nationality, race

All of the above

Religion

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

Always has an ARM rate

Always has a fixed rate

Cannot be prepaid, renegotiated, or refinanced without penalties

May be re-borrowed like a credit line

11) Which is NOT HMDA non-compliance?

Failing to collect or report any data

Missing the annual submission deadline

Denying loans based on neighborhood (redlining)

Keeping and submitting complete mortgage data

12) How does RESPA protect the consumer?

Requires a third-party arbiter on every file

Lenders must disclose every settlement cost and eliminate kickbacks

Consumers must file all documents with a judge

Allows lenders to hide fee breakdowns

13) “Creditor” under ECOA includes:

All of the above

Third-party loan companies

Banks/credit issuers

Individuals who lend money

14) Which is NOT TILA non-compliance?

Incorrect or missing disclosures

Influencing an appraiser’s value

Clear disclosures to clients

Adding undisclosed junk fees

15) Which application types are not HMDA-reportable?

Family vacation-home loans

A & C

Open-end lines of credit

Closed-end mortgages

16) RESPA protections apply primarily to:

Prospective home-purchase borrowers only

Business-purpose mortgages

Agricultural-purpose mortgages

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

17) ECOA requires creditors to:

Base decisions on credit factors only

Avoid discouraging protected applicants

All of the above

Treat applicants equally

18) 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

19) Regulation Z requires lenders to:

Present credit terms in clear language

Define criminal penalties

Delay disclosures until after signing

Repeal the 2012 gift-card rule

20) Regulation M under TILA primarily:

A & C

Details penalties for violations

Explains consumer-leasing disclosure requirements

Tells consumers how to enforce TILA

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

False advertising to attract borrowers

Clear fee disclosures

Judging ability to repay in good faith

Delivering right-to-rescind notice

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

Providing a Loan Estimate within three business days

Waiting two weeks to deliver the LE

Delivering the LE and Closing Disclosures on schedule

Accepting a kickback for referrals

23) RESPA enforcement may include:

All of the above

Fines, license loss, or jail for violators

Universal standards for brokers and lenders

Consumer complaints to CFPB

24) Maximum penalties for TILA violations may include:

Up to one year in jail

Up to $5 000 fine

Lifetime lending ban only

A & B

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

Only on mortgages

Only on credit cards

False

True

26) Which is an ECOA violation?

Approving because applicant is the same race as the lender

Giving clear adverse-action reasons

Denying due to low credit score

Approving despite different religion

27) Since 2010, RESPA has been enforced by:

The President

Department of Housing and Urban Development (HUD)

Consumer Financial Protection Bureau (CFPB)

Individual state governments

28) TILA requires mortgage professionals to:

Negotiate every contract

Provide service details

A & B

Disclose product information

29) 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

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

They plan to market products

Never permitted

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

They intend to use it for approval

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

Never

It depends

Yes

32) TILA became law on:

May 29 1968

Jan 1 2008

June 12 1977

Feb 23 1955

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

Mandated transparency of broker fees

Added comparative-shopping disclosures

Let consumers dictate the exact prices lenders may charge

Allowed average-cost pricing

34) Thanks to TILA, consumers may:

Make informed credit decisions

Terminate an unfavorable agreement within legal limits

A & B

Obtain lenders’ client lists

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

True

Only on auto loans

False

Sometimes

36) 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

37) 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

38) HMDA became law in:

1988

1975

1940

2008

39) Under ECOA, consumers may:

A & B

Demand special credit terms

Obtain lenders’ entire client list

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

40) Failure to report HMDA data can result in:

Civil money penalties

All of the above

Warnings and resubmission requests

Prison for egregious cases

41) Withdrawn applications must be reported to HMDA.

Yes

Only for denied applications

Only loans over $1 million

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

False

No, only to payday lenders

Only for big banks

True

43) ECOA’s core purpose is to:

Standardize fees

B & C

Ensure equal pay for lenders

Outlaw discrimination by creditors against any applicant

44) Why did Congress pass RESPA?

Give lenders greater negotiating freedom

Limit escrow abuses and ban kickbacks/referral fees

Let homeowners settle disputes out of court

Protect banks’ capital reserves

45) Institutions must report which application types?

Mortgage loans

Refinances

Home-improvement loans

All of the above

46) HMDA data are submitted via:

FFIEC/CFPB HMDA website portal

Email to HUD

State governor’s office

July 1 in-person drop-off

47) HMDA’s main focus is to:

Publish a national “How-to-lend” guide

Require data reporting to fight housing discrimination

Elect an industry president

Mandate annual meetings with the Fed

Your score is

See also: