NMLS Federal Mortgage Practice Test Questions 2026

Last Updated on May 13, 2026

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 backed by the federal government. 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 existing rules, including the implementation of NMLS licensing 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) Creditors may ask an applicant’s race or gender only if:

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

Never permitted

They plan to market products

They intend to use it for approval

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

Only if the buyer approves

True

Only if payment is under $15

False

3) ECOA prohibits discrimination based on:

All of the above

Age

Religion

Gender, nationality, race

4) TILA requires mortgage professionals to:

Provide service details

A & B

Disclose product information

Negotiate every contract

5) HMDA data are submitted via:

Email to HUD

FFIEC/CFPB HMDA website portal

July 1 in-person drop-off

State governor’s office

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

Refusing to require a certain insurer as a loan condition

Borrowers suing for RESPA damages

Keeping required disclosure records

A lender advertising a settlement provider in exchange for referral fees

7) Which is NOT HMDA non-compliance?

Failing to collect or report any data

Denying loans based on neighborhood (redlining)

Keeping and submitting complete mortgage data

Missing the annual submission deadline

8) Thanks to TILA, consumers may:

Obtain lenders’ client lists

Terminate an unfavorable agreement within legal limits

A & B

Make informed credit decisions

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

Judging ability to repay in good faith

False advertising to attract borrowers

Clear fee disclosures

Delivering right-to-rescind notice

10) ECOA’s core purpose is to:

Outlaw discrimination by creditors against any applicant

B & C

Standardize fees

Ensure equal pay for lenders

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

May be re-borrowed like a credit line

Always has an ARM rate

Cannot be prepaid, renegotiated, or refinanced without penalties

Always has a fixed rate

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

One week

Six months

Three days

Contracts are final

13) ECOA requires creditors to:

Avoid discouraging protected applicants

All of the above

Base decisions on credit factors only

Treat applicants equally

14) Regulation M under TILA primarily:

Explains consumer-leasing disclosure requirements

Details penalties for violations

A & C

Tells consumers how to enforce TILA

15) Maximum penalties for TILA violations may include:

Lifetime lending ban only

Up to one year in jail

A & B

Up to $5 000 fine

16) TILA became law on:

June 12 1977

May 29 1968

Feb 23 1955

Jan 1 2008

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

Only on mortgages

False

Only on credit cards

True

18) Which application types are not HMDA-reportable?

A & C

Open-end lines of credit

Family vacation-home loans

Closed-end mortgages

19) ECOA became law in:

1953

2009

1974

1942

20) 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

21) HMDA’s main focus is to:

Require data reporting to fight housing discrimination

Publish a national “How-to-lend” guide

Mandate annual meetings with the Fed

Elect an industry president

22) Which is NOT ECOA non-compliance?

Denying credit without explaining why

Denying because applicant receives public assistance

Refusing an applicant because of race

Maintaining required records of applications

23) TILA outlaws:

All of the above

Unfair credit billing

Misrepresentation and nondisclosure

High-pressure sales

24) When was RESPA enacted?

1974

1988

1972

1955

25) How does RESPA protect the consumer?

Consumers must file all documents with a judge

Allows lenders to hide fee breakdowns

Requires a third-party arbiter on every file

Lenders must disclose every settlement cost and eliminate kickbacks

26) RESPA enforcement may include:

Universal standards for brokers and lenders

Consumer complaints to CFPB

Fines, license loss, or jail for violators

All of the above

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

Never

It depends

Yes

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

Mandated transparency of broker fees

Allowed average-cost pricing

Let consumers dictate the exact prices lenders may charge

Added comparative-shopping disclosures

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

Applicant names and addresses only

Applicant race/ethnicity and reasons for denial

Daily business diaries

Ideas for law improvement

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

False

Only on auto loans

Sometimes

True

31) Why did Congress pass RESPA?

Let homeowners settle disputes out of court

Limit escrow abuses and ban kickbacks/referral fees

Give lenders greater negotiating freedom

Protect banks’ capital reserves

32) Regulation Z requires lenders to:

Define criminal penalties

Present credit terms in clear language

Delay disclosures until after signing

Repeal the 2012 gift-card rule

33) The 2015 HMDA rule required reporting of:

Public posting of all LARs for the first time

Applicant names/addresses

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

Removal of applicant demographics

34) Under ECOA, consumers may:

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

A & B

Demand special credit terms

Obtain lenders’ entire client list

35) Since 2010, RESPA has been enforced by:

Department of Housing and Urban Development (HUD)

The President

Consumer Financial Protection Bureau (CFPB)

Individual state governments

36) Which is an ECOA violation?

Approving because applicant is the same race as the lender

Giving clear adverse-action reasons

Approving despite different religion

Denying due to low credit score

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

Following regulated mortgage practices

Accurate, complete data submissions

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

Publicly disclosing aggregate data

38) 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

39) RESPA protections apply primarily to:

Agricultural-purpose mortgages

Prospective home-purchase borrowers only

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

Business-purpose mortgages

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

Only for big banks

False

True

No, only to payday lenders

41) HMDA became law in:

1988

2008

1975

1940

42) “Creditor” under ECOA includes:

All of the above

Third-party loan companies

Banks/credit issuers

Individuals who lend money

43) Institutions must report which application types?

Home-improvement loans

All of the above

Refinances

Mortgage loans

44) Which is NOT TILA non-compliance?

Influencing an appraiser’s value

Clear disclosures to clients

Adding undisclosed junk fees

Incorrect or missing disclosures

45) Withdrawn applications must be reported to HMDA.

Only loans over $1 million

Yes

Only for denied applications

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

Delivering the LE and Closing Disclosures on schedule

Accepting a kickback for referrals

Providing a Loan Estimate within three business days

Waiting two weeks to deliver the LE

47) Failure to report HMDA data can result in:

All of the above

Civil money penalties

Prison for egregious cases

Warnings and resubmission requests

Your score is

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