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) Institutions must report which application types?

Refinances

All of the above

Mortgage loans

Home-improvement loans

2) Under ECOA, consumers may:

Obtain lenders’ entire client list

A & B

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

Demand special credit terms

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

Ideas for law improvement

Applicant race/ethnicity and reasons for denial

Applicant names and addresses only

Daily business diaries

4) Since 2010, RESPA has been enforced by:

Individual state governments

Consumer Financial Protection Bureau (CFPB)

Department of Housing and Urban Development (HUD)

The President

5) ECOA became law in:

1953

1974

2009

1942

6) Which is NOT ECOA non-compliance?

Refusing an applicant because of race

Maintaining required records of applications

Denying credit without explaining why

Denying because applicant receives public assistance

7) TILA outlaws:

Unfair credit billing

High-pressure sales

All of the above

Misrepresentation and nondisclosure

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

False

Only if the buyer approves

True

Only if payment is under $15

9) Thanks to TILA, consumers may:

Terminate an unfavorable agreement within legal limits

Make informed credit decisions

Obtain lenders’ client lists

A & B

10) ECOA requires creditors to:

Treat applicants equally

Avoid discouraging protected applicants

All of the above

Base decisions on credit factors only

11) Which is NOT HMDA non-compliance?

Missing the annual submission deadline

Denying loans based on neighborhood (redlining)

Failing to collect or report any data

Keeping and submitting complete mortgage data

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

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

They plan to market products

Never permitted

They intend to use it for approval

13) HMDA’s main focus is to:

Publish a national “How-to-lend” guide

Require data reporting to fight housing discrimination

Mandate annual meetings with the Fed

Elect an industry president

14) When was RESPA enacted?

1955

1972

1974

1988

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

No, only to payday lenders

False

Only for big banks

True

16) RESPA enforcement may include:

All of the above

Consumer complaints to CFPB

Fines, license loss, or jail for violators

Universal standards for brokers and lenders

17) TILA became law on:

May 29 1968

June 12 1977

Jan 1 2008

Feb 23 1955

18) How does RESPA protect the consumer?

Allows lenders to hide fee breakdowns

Requires a third-party arbiter on every file

Consumers must file all documents with a judge

Lenders must disclose every settlement cost and eliminate kickbacks

19) Maximum penalties for TILA violations may include:

Up to one year in jail

A & B

Up to $5 000 fine

Lifetime lending ban only

20) ECOA prohibits discrimination based on:

Religion

Gender, nationality, race

Age

All of the above

21) Regulation M under TILA primarily:

A & C

Details penalties for violations

Explains consumer-leasing disclosure requirements

Tells consumers how to enforce TILA

22) Failure to report HMDA data can result in:

Prison for egregious cases

Warnings and resubmission requests

Civil money penalties

All of the above

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

Always has a fixed rate

Always has an ARM rate

Cannot be prepaid, renegotiated, or refinanced without penalties

May be re-borrowed like a credit line

24) Which is an ECOA violation?

Approving because applicant is the same race as the lender

Denying due to low credit score

Giving clear adverse-action reasons

Approving despite different religion

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

Let consumers dictate the exact prices lenders may charge

Added comparative-shopping disclosures

Mandated transparency of broker fees

Allowed average-cost pricing

26) 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

27) Which is NOT TILA non-compliance?

Adding undisclosed junk fees

Influencing an appraiser’s value

Clear disclosures to clients

Incorrect or missing disclosures

28) ECOA’s core purpose is to:

B & C

Ensure equal pay for lenders

Standardize fees

Outlaw discrimination by creditors against any applicant

29) TILA requires mortgage professionals to:

Provide service details

Negotiate every contract

A & B

Disclose product information

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

False

True

Only on auto loans

Sometimes

31) HMDA data are submitted via:

State governor’s office

FFIEC/CFPB HMDA website portal

July 1 in-person drop-off

Email to HUD

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

Three days

Contracts are final

One week

Six months

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

False advertising to attract borrowers

Delivering right-to-rescind notice

Clear fee disclosures

Judging ability to repay in good faith

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

Borrowers suing for RESPA damages

Keeping required disclosure records

A lender advertising a settlement provider in exchange for referral fees

Refusing to require a certain insurer as a loan condition

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

Waiting two weeks to deliver the LE

Providing a Loan Estimate within three business days

Accepting a kickback for referrals

Delivering the LE and Closing Disclosures on schedule

36) Which application types are not HMDA-reportable?

Family vacation-home loans

Open-end lines of credit

Closed-end mortgages

A & C

37) HMDA became law in:

2008

1940

1988

1975

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

Complete removal of all service fees

State-level rather than federal enforcement

Tougher criminal penalties only

Full disclosure of servicing transfers, sales, or assignments

39) Why did Congress pass RESPA?

Give lenders greater negotiating freedom

Let homeowners settle disputes out of court

Limit escrow abuses and ban kickbacks/referral fees

Protect banks’ capital reserves

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

Only on mortgages

Only on credit cards

True

False

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

Never

Yes

It depends

42) The 2015 HMDA rule required reporting of:

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

Applicant names/addresses

Public posting of all LARs for the first time

Removal of applicant demographics

43) RESPA primarily reduces or eliminates the cost of:

Directly subsidized service fees

B & C

Excess service fees tied to escrow accounts

Government-funded closing grants

44) Withdrawn applications must be reported to HMDA.

Only for denied applications

Yes

Only loans over $1 million

45) RESPA protections apply primarily to:

Business-purpose mortgages

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

Agricultural-purpose mortgages

Prospective home-purchase borrowers only

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

Publicly disclosing aggregate data

Following regulated mortgage practices

Accurate, complete data submissions

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

47) “Creditor” under ECOA includes:

All of the above

Third-party loan companies

Individuals who lend money

Banks/credit issuers

Your score is

See also: