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) Which is an example of HMDA non-compliance?

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

Accurate, complete data submissions

Following regulated mortgage practices

Publicly disclosing aggregate data

2) Which is an ECOA violation?

Approving because applicant is the same race as the lender

Approving despite different religion

Giving clear adverse-action reasons

Denying due to low credit score

3) Withdrawn applications must be reported to HMDA.

Only for denied applications

Yes

Only loans over $1 million

4) RESPA enforcement may include:

Fines, license loss, or jail for violators

All of the above

Universal standards for brokers and lenders

Consumer complaints to CFPB

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

Clear fee disclosures

Delivering right-to-rescind notice

Judging ability to repay in good faith

False advertising to attract borrowers

6) 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

7) When was RESPA enacted?

1974

1972

1988

1955

8) HMDA became law in:

2008

1940

1988

1975

9) 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

10) Which is NOT TILA non-compliance?

Influencing an appraiser’s value

Adding undisclosed junk fees

Clear disclosures to clients

Incorrect or missing disclosures

11) Regulation Z requires lenders to:

Delay disclosures until after signing

Present credit terms in clear language

Repeal the 2012 gift-card rule

Define criminal penalties

12) Since 2010, RESPA has been enforced by:

The President

Department of Housing and Urban Development (HUD)

Consumer Financial Protection Bureau (CFPB)

Individual state governments

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

False

Only on auto loans

True

Sometimes

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

True

Only on mortgages

False

Only on credit cards

15) ECOA became law in:

1942

1953

1974

2009

16) Failure to report HMDA data can result in:

Prison for egregious cases

Warnings and resubmission requests

Civil money penalties

All of the above

17) TILA became law on:

Jan 1 2008

May 29 1968

Feb 23 1955

June 12 1977

18) ECOA prohibits discrimination based on:

Gender, nationality, race

All of the above

Age

Religion

19) TILA requires mortgage professionals to:

Disclose product information

Provide service details

A & B

Negotiate every contract

20) ECOA’s core purpose is to:

B & C

Standardize fees

Ensure equal pay for lenders

Outlaw discrimination by creditors against any applicant

21) Maximum penalties for TILA violations may include:

Up to one year in jail

A & B

Lifetime lending ban only

Up to $5 000 fine

22) HMDA’s main focus is to:

Mandate annual meetings with the Fed

Publish a national “How-to-lend” guide

Require data reporting to fight housing discrimination

Elect an industry president

23) Which application types are not HMDA-reportable?

Family vacation-home loans

A & C

Closed-end mortgages

Open-end lines of credit

24) HMDA data are submitted via:

July 1 in-person drop-off

State governor’s office

Email to HUD

FFIEC/CFPB HMDA website portal

25) ECOA requires creditors to:

All of the above

Treat applicants equally

Avoid discouraging protected applicants

Base decisions on credit factors only

26) 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

27) 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

28) 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

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

State-level rather than federal enforcement

Full disclosure of servicing transfers, sales, or assignments

Complete removal of all service fees

Tougher criminal penalties only

30) 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

31) Regulation M under TILA primarily:

A & C

Tells consumers how to enforce TILA

Explains consumer-leasing disclosure requirements

Details penalties for violations

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

Allowed average-cost pricing

Mandated transparency of broker fees

Let consumers dictate the exact prices lenders may charge

Added comparative-shopping disclosures

33) The 2015 HMDA rule required reporting of:

Removal of applicant demographics

Applicant names/addresses

Public posting of all LARs for the first time

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

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

Only for big banks

False

No, only to payday lenders

True

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) “Creditor” under ECOA includes:

All of the above

Third-party loan companies

Banks/credit issuers

Individuals who lend money

37) TILA outlaws:

High-pressure sales

All of the above

Unfair credit billing

Misrepresentation and nondisclosure

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

Always has an ARM rate

Always has a fixed rate

Cannot be prepaid, renegotiated, or refinanced without penalties

May be re-borrowed like a credit line

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

Daily business diaries

Applicant names and addresses only

Ideas for law improvement

Applicant race/ethnicity and reasons for denial

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

Refusing to require a certain insurer as a loan condition

Borrowers suing for RESPA damages

A lender advertising a settlement provider in exchange for referral fees

Keeping required disclosure records

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

One week

Contracts are final

Six months

Three days

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

Never

Yes

It depends

43) Institutions must report which application types?

Mortgage loans

Home-improvement loans

All of the above

Refinances

44) Under ECOA, consumers may:

A & B

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

Obtain lenders’ entire client list

Demand special credit terms

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

Only if the buyer approves

False

Only if payment is under $15

True

46) Thanks to TILA, consumers may:

Obtain lenders’ client lists

A & B

Make informed credit decisions

Terminate an unfavorable agreement within legal limits

47) 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)

Your score is

See also: