NMLS Federal Mortgage Practice Test Questions 2026

Last Updated on October 1, 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 NOT an example of RESPA non-compliance?

Accepting a kickback for referrals

Providing a Loan Estimate within three business days

Delivering the LE and Closing Disclosures on schedule

Waiting two weeks to deliver the LE

2) 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

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

It depends

Never

Yes

4) ECOA’s core purpose is to:

Outlaw discrimination by creditors against any applicant

Standardize fees

Ensure equal pay for lenders

B & C

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

False

True

Sometimes

Only on auto loans

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

Following regulated mortgage practices

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

Publicly disclosing aggregate data

Accurate, complete data submissions

7) 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

8) TILA requires mortgage professionals to:

Disclose product information

Provide service details

Negotiate every contract

A & B

9) Maximum penalties for TILA violations may include:

Up to one year in jail

Up to $5 000 fine

Lifetime lending ban only

A & B

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

Cannot be prepaid, renegotiated, or refinanced without penalties

May be re-borrowed like a credit line

Always has a fixed rate

Always has an ARM rate

11) Regulation Z requires lenders to:

Define criminal penalties

Delay disclosures until after signing

Present credit terms in clear language

Repeal the 2012 gift-card rule

12) ECOA became law in:

1953

2009

1974

1942

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

Applicant names and addresses only

Ideas for law improvement

Applicant race/ethnicity and reasons for denial

Daily business diaries

14) Which is NOT ECOA non-compliance?

Denying because applicant receives public assistance

Maintaining required records of applications

Denying credit without explaining why

Refusing an applicant because of race

15) Which is NOT TILA non-compliance?

Clear disclosures to clients

Adding undisclosed junk fees

Influencing an appraiser’s value

Incorrect or missing disclosures

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

Only on mortgages

Only on credit cards

False

True

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

True

Only for big banks

No, only to payday lenders

False

18) HMDA’s main focus is to:

Require data reporting to fight housing discrimination

Elect an industry president

Mandate annual meetings with the Fed

Publish a national “How-to-lend” guide

19) RESPA enforcement may include:

All of the above

Consumer complaints to CFPB

Universal standards for brokers and lenders

Fines, license loss, or jail for violators

20) ECOA requires creditors to:

All of the above

Base decisions on credit factors only

Treat applicants equally

Avoid discouraging protected applicants

21) How does RESPA protect the consumer?

Requires a third-party arbiter on every file

Allows lenders to hide fee breakdowns

Lenders must disclose every settlement cost and eliminate kickbacks

Consumers must file all documents with a judge

22) Which application types are not HMDA-reportable?

Open-end lines of credit

A & C

Family vacation-home loans

Closed-end mortgages

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

They intend to use it for approval

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

They plan to market products

Never permitted

24) “Creditor” under ECOA includes:

Third-party loan companies

Individuals who lend money

All of the above

Banks/credit issuers

25) TILA outlaws:

Misrepresentation and nondisclosure

All of the above

High-pressure sales

Unfair credit billing

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

Three days

One week

Six months

Contracts are final

27) Thanks to TILA, consumers may:

Terminate an unfavorable agreement within legal limits

A & B

Obtain lenders’ client lists

Make informed credit decisions

28) Withdrawn applications must be reported to HMDA.

Only for denied applications

Only loans over $1 million

Yes

29) RESPA protections apply primarily to:

Agricultural-purpose mortgages

Business-purpose mortgages

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

Prospective home-purchase borrowers only

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

Only if the buyer approves

True

False

Only if payment is under $15

31) 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

32) ECOA prohibits discrimination based on:

Age

All of the above

Gender, nationality, race

Religion

33) Institutions must report which application types?

All of the above

Refinances

Mortgage loans

Home-improvement loans

34) HMDA data are submitted via:

FFIEC/CFPB HMDA website portal

Email to HUD

State governor’s office

July 1 in-person drop-off

35) Why did Congress pass RESPA?

Limit escrow abuses and ban kickbacks/referral fees

Give lenders greater negotiating freedom

Let homeowners settle disputes out of court

Protect banks’ capital reserves

36) TILA became law on:

Feb 23 1955

May 29 1968

Jan 1 2008

June 12 1977

37) 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

38) Under ECOA, consumers may:

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

Obtain lenders’ entire client list

Demand special credit terms

A & B

39) HMDA became law in:

2008

1940

1988

1975

40) Since 2010, RESPA has been enforced by:

The President

Department of Housing and Urban Development (HUD)

Individual state governments

Consumer Financial Protection Bureau (CFPB)

41) 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

42) Failure to report HMDA data can result in:

Civil money penalties

Warnings and resubmission requests

All of the above

Prison for egregious cases

43) Regulation M under TILA primarily:

Tells consumers how to enforce TILA

Explains consumer-leasing disclosure requirements

A & C

Details penalties for violations

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

Full disclosure of servicing transfers, sales, or assignments

Tougher criminal penalties only

Complete removal of all service fees

State-level rather than federal enforcement

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

Let consumers dictate the exact prices lenders may charge

Added comparative-shopping disclosures

Allowed average-cost pricing

Mandated transparency of broker fees

46) Which is an ECOA violation?

Approving despite different religion

Denying due to low credit score

Approving because applicant is the same race as the lender

Giving clear adverse-action reasons

47) When was RESPA enacted?

1974

1988

1955

1972

Your score is

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