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 example of TILA non-compliance?

Clear fee disclosures

Judging ability to repay in good faith

Delivering right-to-rescind notice

False advertising to attract borrowers

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

False

True

Only on mortgages

Only on credit cards

3) Under ECOA, consumers may:

Demand special credit terms

Obtain lenders’ entire client list

A & B

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

4) RESPA primarily reduces or eliminates the cost of:

Government-funded closing grants

Excess service fees tied to escrow accounts

B & C

Directly subsidized service fees

5) 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

6) Which is NOT ECOA non-compliance?

Maintaining required records of applications

Denying because applicant receives public assistance

Refusing an applicant because of race

Denying credit without explaining why

7) HMDA became law in:

1940

1975

1988

2008

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

Only if payment is under $15

True

False

Only if the buyer approves

9) “Creditor” under ECOA includes:

All of the above

Third-party loan companies

Individuals who lend money

Banks/credit issuers

10) The 2015 HMDA rule required reporting of:

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

Public posting of all LARs for the first time

Applicant names/addresses

Removal of applicant demographics

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

It depends

Never

Yes

12) TILA outlaws:

Unfair credit billing

Misrepresentation and nondisclosure

High-pressure sales

All of the above

13) HMDA data are submitted via:

State governor’s office

July 1 in-person drop-off

Email to HUD

FFIEC/CFPB HMDA website portal

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

Tougher criminal penalties only

Complete removal of all service fees

State-level rather than federal enforcement

Full disclosure of servicing transfers, sales, or assignments

15) Which is NOT TILA non-compliance?

Influencing an appraiser’s value

Adding undisclosed junk fees

Clear disclosures to clients

Incorrect or missing disclosures

16) 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

17) ECOA became law in:

2009

1953

1974

1942

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

Contracts are final

One week

Three days

Six months

19) Why did Congress pass RESPA?

Let homeowners settle disputes out of court

Protect banks’ capital reserves

Give lenders greater negotiating freedom

Limit escrow abuses and ban kickbacks/referral fees

20) Failure to report HMDA data can result in:

All of the above

Warnings and resubmission requests

Prison for egregious cases

Civil money penalties

21) Withdrawn applications must be reported to HMDA.

Only for denied applications

Yes

Only loans over $1 million

22) TILA became law on:

May 29 1968

Jan 1 2008

June 12 1977

Feb 23 1955

23) Thanks to TILA, consumers may:

Make informed credit decisions

A & B

Terminate an unfavorable agreement within legal limits

Obtain lenders’ client lists

24) Regulation Z requires lenders to:

Repeal the 2012 gift-card rule

Define criminal penalties

Present credit terms in clear language

Delay disclosures until after signing

25) Which application types are not HMDA-reportable?

A & C

Closed-end mortgages

Family vacation-home loans

Open-end lines of credit

26) 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)

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

False

True

Only for big banks

No, only to payday lenders

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

Applicant race/ethnicity and reasons for denial

Daily business diaries

Applicant names and addresses only

Ideas for law improvement

29) When was RESPA enacted?

1974

1988

1972

1955

30) ECOA prohibits discrimination based on:

Age

Gender, nationality, race

All of the above

Religion

31) Maximum penalties for TILA violations may include:

Up to one year in jail

Up to $5 000 fine

A & B

Lifetime lending ban only

32) HMDA’s main focus is to:

Mandate annual meetings with the Fed

Elect an industry president

Publish a national “How-to-lend” guide

Require data reporting to fight housing discrimination

33) RESPA enforcement may include:

Fines, license loss, or jail for violators

Universal standards for brokers and lenders

Consumer complaints to CFPB

All of the above

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

False

True

Only on auto loans

Sometimes

35) 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

36) ECOA requires creditors to:

Treat applicants equally

Avoid discouraging protected applicants

All of the above

Base decisions on credit factors only

37) 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

38) Since 2010, RESPA has been enforced by:

Department of Housing and Urban Development (HUD)

The President

Individual state governments

Consumer Financial Protection Bureau (CFPB)

39) 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

40) TILA requires mortgage professionals to:

Provide service details

Negotiate every contract

A & B

Disclose product information

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

Providing a Loan Estimate within three business days

Waiting two weeks to deliver the LE

Accepting a kickback for referrals

Delivering the LE and Closing Disclosures on schedule

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

Mandated transparency of broker fees

Let consumers dictate the exact prices lenders may charge

Allowed average-cost pricing

Added comparative-shopping disclosures

43) 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

Never permitted

They plan to market products

44) Which is NOT HMDA non-compliance?

Failing to collect or report any data

Denying loans based on neighborhood (redlining)

Missing the annual submission deadline

Keeping and submitting complete mortgage data

45) ECOA’s core purpose is to:

B & C

Ensure equal pay for lenders

Outlaw discrimination by creditors against any applicant

Standardize fees

46) Regulation M under TILA primarily:

Details penalties for violations

Explains consumer-leasing disclosure requirements

A & C

Tells consumers how to enforce TILA

47) Institutions must report which application types?

Home-improvement loans

Refinances

Mortgage loans

All of the above

Your score is

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