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1) Withdrawn applications must be reported to HMDA.

Yes

Only for denied applications

Only loans over $1 million

2) Under ECOA, consumers may:

Obtain lenders’ entire client list

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

Demand special credit terms

A & B

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

Contracts are final

One week

Three days

Six months

4) ECOA became law in:

1974

2009

1953

1942

5) Institutions must report which application types?

All of the above

Home-improvement loans

Refinances

Mortgage loans

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

Sometimes

False

True

Only on auto loans

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) Which is NOT TILA non-compliance?

Influencing an appraiser’s value

Clear disclosures to clients

Incorrect or missing disclosures

Adding undisclosed junk fees

9) 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

10) Since 2010, RESPA has been enforced by:

Consumer Financial Protection Bureau (CFPB)

Individual state governments

Department of Housing and Urban Development (HUD)

The President

11) ECOA prohibits discrimination based on:

All of the above

Religion

Gender, nationality, race

Age

12) HMDA became law in:

1940

1988

2008

1975

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

False advertising to attract borrowers

Judging ability to repay in good faith

Clear fee disclosures

Delivering right-to-rescind notice

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

False

Only on credit cards

Only on mortgages

True

15) RESPA protections apply primarily to:

Business-purpose mortgages

Prospective home-purchase borrowers only

Agricultural-purpose mortgages

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

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

Delivering the LE and Closing Disclosures on schedule

Accepting a kickback for referrals

Waiting two weeks to deliver the LE

Providing a Loan Estimate within three business days

17) How does RESPA protect the consumer?

Consumers must file all documents with a judge

Requires a third-party arbiter on every file

Allows lenders to hide fee breakdowns

Lenders must disclose every settlement cost and eliminate kickbacks

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) ECOA’s core purpose is to:

Outlaw discrimination by creditors against any applicant

Ensure equal pay for lenders

B & C

Standardize fees

20) TILA became law on:

May 29 1968

June 12 1977

Jan 1 2008

Feb 23 1955

21) ECOA requires creditors to:

Avoid discouraging protected applicants

Base decisions on credit factors only

Treat applicants equally

All of the above

22) 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

23) HMDA data are submitted via:

July 1 in-person drop-off

Email to HUD

FFIEC/CFPB HMDA website portal

State governor’s office

24) “Creditor” under ECOA includes:

Third-party loan companies

All of the above

Banks/credit issuers

Individuals who lend money

25) 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

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

Yes

Never

It depends

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

Added comparative-shopping disclosures

Let consumers dictate the exact prices lenders may charge

Mandated transparency of broker fees

Allowed average-cost pricing

28) 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

29) HMDA’s main focus is to:

Publish a national “How-to-lend” guide

Elect an industry president

Require data reporting to fight housing discrimination

Mandate annual meetings with the Fed

30) TILA requires mortgage professionals to:

Provide service details

A & B

Negotiate every contract

Disclose product information

31) 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

32) Regulation M under TILA primarily:

Details penalties for violations

A & C

Tells consumers how to enforce TILA

Explains consumer-leasing disclosure requirements

33) Failure to report HMDA data can result in:

Prison for egregious cases

Civil money penalties

Warnings and resubmission requests

All of the above

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

Full disclosure of servicing transfers, sales, or assignments

State-level rather than federal enforcement

Complete removal of all service fees

Tougher criminal penalties only

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

True

False

Only if payment is under $15

Only if the buyer approves

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

No, only to payday lenders

Only for big banks

False

True

37) Maximum penalties for TILA violations may include:

Up to $5 000 fine

Up to one year in jail

A & B

Lifetime lending ban only

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

Cannot be prepaid, renegotiated, or refinanced without penalties

Always has a fixed rate

Always has an ARM rate

May be re-borrowed like a credit line

39) Regulation Z requires lenders to:

Present credit terms in clear language

Repeal the 2012 gift-card rule

Define criminal penalties

Delay disclosures until after signing

40) TILA outlaws:

Misrepresentation and nondisclosure

High-pressure sales

Unfair credit billing

All of the above

41) Which application types are not HMDA-reportable?

Family vacation-home loans

Open-end lines of credit

A & C

Closed-end mortgages

42) Which is NOT HMDA non-compliance?

Failing to collect or report any data

Denying loans based on neighborhood (redlining)

Missing the annual submission deadline

Keeping and submitting complete mortgage data

43) RESPA enforcement may include:

Fines, license loss, or jail for violators

Universal standards for brokers and lenders

All of the above

Consumer complaints to CFPB

44) When was RESPA enacted?

1988

1972

1955

1974

45) Thanks to TILA, consumers may:

Terminate an unfavorable agreement within legal limits

Obtain lenders’ client lists

Make informed credit decisions

A & B

46) Which is an ECOA violation?

Denying due to low credit score

Approving despite different religion

Approving because applicant is the same race as the lender

Giving clear adverse-action reasons

47) The 2015 HMDA rule required reporting of:

Public posting of all LARs for the first time

Removal of applicant demographics

Applicant names/addresses

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

Your score is

See also: