NMLS Federal Mortgage Practice Test Questions 2026

Last Updated on June 30, 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) Which is an ECOA violation?

Approving despite different religion

Giving clear adverse-action reasons

Approving because applicant is the same race as the lender

Denying due to low credit score

2) 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

3) TILA requires mortgage professionals to:

Disclose product information

Negotiate every contract

Provide service details

A & B

4) ECOA requires creditors to:

All of the above

Avoid discouraging protected applicants

Base decisions on credit factors only

Treat applicants equally

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

Only on credit cards

False

True

Only on mortgages

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

Cannot be prepaid, renegotiated, or refinanced without penalties

Always has a fixed rate

May be re-borrowed like a credit line

Always has an ARM rate

7) Which is NOT TILA non-compliance?

Clear disclosures to clients

Adding undisclosed junk fees

Incorrect or missing disclosures

Influencing an appraiser’s value

8) HMDA data are submitted via:

Email to HUD

July 1 in-person drop-off

FFIEC/CFPB HMDA website portal

State governor’s office

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

Yes

It depends

Never

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

Tougher criminal penalties only

Full disclosure of servicing transfers, sales, or assignments

Complete removal of all service fees

State-level rather than federal enforcement

11) The 2015 HMDA rule required reporting of:

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

Removal of applicant demographics

Public posting of all LARs for the first time

Applicant names/addresses

12) Regulation M under TILA primarily:

Tells consumers how to enforce TILA

Details penalties for violations

Explains consumer-leasing disclosure requirements

A & C

13) 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

14) Thanks to TILA, consumers may:

A & B

Obtain lenders’ client lists

Make informed credit decisions

Terminate an unfavorable agreement within legal limits

15) TILA became law on:

Feb 23 1955

Jan 1 2008

May 29 1968

June 12 1977

16) ECOA prohibits discrimination based on:

All of the above

Gender, nationality, race

Age

Religion

17) Which is NOT HMDA non-compliance?

Keeping and submitting complete mortgage data

Failing to collect or report any data

Missing the annual submission deadline

Denying loans based on neighborhood (redlining)

18) HMDA became law in:

2008

1975

1988

1940

19) ECOA’s core purpose is to:

B & C

Standardize fees

Ensure equal pay for lenders

Outlaw discrimination by creditors against any applicant

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

Providing a Loan Estimate within three business days

Accepting a kickback for referrals

Waiting two weeks to deliver the LE

Delivering the LE and Closing Disclosures on schedule

21) Why did Congress pass RESPA?

Protect banks’ capital reserves

Let homeowners settle disputes out of court

Give lenders greater negotiating freedom

Limit escrow abuses and ban kickbacks/referral fees

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

Following regulated mortgage practices

Publicly disclosing aggregate data

Accurate, complete data submissions

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

23) 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

24) Maximum penalties for TILA violations may include:

A & B

Up to one year in jail

Lifetime lending ban only

Up to $5 000 fine

25) When was RESPA enacted?

1988

1955

1974

1972

26) How does RESPA protect the consumer?

Consumers must file all documents with a judge

Requires a third-party arbiter on every file

Lenders must disclose every settlement cost and eliminate kickbacks

Allows lenders to hide fee breakdowns

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

Ideas for law improvement

Applicant names and addresses only

Applicant race/ethnicity and reasons for denial

Daily business diaries

28) Withdrawn applications must be reported to HMDA.

Only for denied applications

Yes

Only loans over $1 million

29) RESPA enforcement may include:

Universal standards for brokers and lenders

All of the above

Consumer complaints to CFPB

Fines, license loss, or jail for violators

30) Which application types are not HMDA-reportable?

Closed-end mortgages

A & C

Open-end lines of credit

Family vacation-home loans

31) 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

32) TILA outlaws:

Misrepresentation and nondisclosure

Unfair credit billing

All of the above

High-pressure sales

33) RESPA protections apply primarily to:

Agricultural-purpose mortgages

Business-purpose mortgages

Prospective home-purchase borrowers only

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

34) ECOA became law in:

2009

1942

1974

1953

35) Failure to report HMDA data can result in:

Civil money penalties

All of the above

Prison for egregious cases

Warnings and resubmission requests

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

Keeping required disclosure records

A lender advertising a settlement provider in exchange for referral fees

Borrowers suing for RESPA damages

Refusing to require a certain insurer as a loan condition

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

Only if payment is under $15

False

True

Only if the buyer approves

38) 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

39) “Creditor” under ECOA includes:

Third-party loan companies

Individuals who lend money

Banks/credit issuers

All of the above

40) RESPA primarily reduces or eliminates the cost of:

Directly subsidized service fees

Government-funded closing grants

Excess service fees tied to escrow accounts

B & C

41) 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

42) Since 2010, RESPA has been enforced by:

Consumer Financial Protection Bureau (CFPB)

Department of Housing and Urban Development (HUD)

The President

Individual state governments

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

False

No, only to payday lenders

True

Only for big banks

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

False

Only on auto loans

Sometimes

True

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

Three days

One week

Contracts are final

Six months

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

Clear fee disclosures

Judging ability to repay in good faith

False advertising to attract borrowers

Delivering right-to-rescind notice

47) Institutions must report which application types?

Home-improvement loans

Mortgage loans

Refinances

All of the above

Your score is

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