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) RESPA protections apply primarily to:

Business-purpose mortgages

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

Prospective home-purchase borrowers only

Agricultural-purpose mortgages

2) ECOA became law in:

1942

1974

2009

1953

3) TILA requires mortgage professionals to:

Negotiate every contract

A & B

Provide service details

Disclose product information

4) HMDA became law in:

1940

1975

2008

1988

5) 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

6) Regulation M under TILA primarily:

Explains consumer-leasing disclosure requirements

Tells consumers how to enforce TILA

A & C

Details penalties for violations

7) RESPA enforcement may include:

All of the above

Universal standards for brokers and lenders

Consumer complaints to CFPB

Fines, license loss, or jail for violators

8) 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

9) Which is NOT HMDA non-compliance?

Failing to collect or report any data

Keeping and submitting complete mortgage data

Denying loans based on neighborhood (redlining)

Missing the annual submission deadline

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

Only on credit cards

True

False

Only on mortgages

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

Sometimes

Only on auto loans

False

True

12) HMDA data are submitted via:

Email to HUD

State governor’s office

July 1 in-person drop-off

FFIEC/CFPB HMDA website portal

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

Borrowers suing for RESPA damages

Refusing to require a certain insurer as a loan condition

Keeping required disclosure records

A lender advertising a settlement provider in exchange for referral fees

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

Judging ability to repay in good faith

False advertising to attract borrowers

Delivering right-to-rescind notice

Clear fee disclosures

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

Only if payment is under $15

False

Only if the buyer approves

True

16) Maximum penalties for TILA violations may include:

Lifetime lending ban only

A & B

Up to one year in jail

Up to $5 000 fine

17) ECOA’s core purpose is to:

Standardize fees

Ensure equal pay for lenders

B & C

Outlaw discrimination by creditors against any applicant

18) Which application types are not HMDA-reportable?

Open-end lines of credit

Family vacation-home loans

A & C

Closed-end mortgages

19) How does RESPA protect the consumer?

Consumers must file all documents with a judge

Lenders must disclose every settlement cost and eliminate kickbacks

Allows lenders to hide fee breakdowns

Requires a third-party arbiter on every file

20) The 2015 HMDA rule required reporting of:

Applicant names/addresses

Public posting of all LARs for the first time

Removal of applicant demographics

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

21) HMDA’s main focus is to:

Mandate annual meetings with the Fed

Publish a national “How-to-lend” guide

Elect an industry president

Require data reporting to fight housing discrimination

22) TILA outlaws:

Misrepresentation and nondisclosure

Unfair credit billing

All of the above

High-pressure sales

23) Under ECOA, consumers may:

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

Demand special credit terms

A & B

Obtain lenders’ entire client list

24) Which is an ECOA violation?

Denying due to low credit score

Giving clear adverse-action reasons

Approving despite different religion

Approving because applicant is the same race as the lender

25) TILA became law on:

Feb 23 1955

May 29 1968

Jan 1 2008

June 12 1977

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

No, only to payday lenders

Only for big banks

False

True

27) Failure to report HMDA data can result in:

Prison for egregious cases

Warnings and resubmission requests

Civil money penalties

All of the above

28) “Creditor” under ECOA includes:

Third-party loan companies

Banks/credit issuers

All of the above

Individuals who lend money

29) Why did Congress pass RESPA?

Let homeowners settle disputes out of court

Protect banks’ capital reserves

Limit escrow abuses and ban kickbacks/referral fees

Give lenders greater negotiating freedom

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

Complete removal of all service fees

Full disclosure of servicing transfers, sales, or assignments

State-level rather than federal enforcement

Tougher criminal penalties only

31) ECOA prohibits discrimination based on:

Gender, nationality, race

All of the above

Religion

Age

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

Three days

One week

Six months

Contracts are final

33) Which is NOT ECOA non-compliance?

Refusing an applicant because of race

Denying because applicant receives public assistance

Maintaining required records of applications

Denying credit without explaining why

34) 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

35) Regulation Z requires lenders to:

Delay disclosures until after signing

Define criminal penalties

Present credit terms in clear language

Repeal the 2012 gift-card rule

36) Institutions must report which application types?

All of the above

Home-improvement loans

Refinances

Mortgage loans

37) 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

38) 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

39) Since 2010, RESPA has been enforced by:

Individual state governments

Consumer Financial Protection Bureau (CFPB)

Department of Housing and Urban Development (HUD)

The President

40) 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

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

Daily business diaries

Ideas for law improvement

Applicant race/ethnicity and reasons for denial

Applicant names and addresses only

42) Which is NOT TILA non-compliance?

Adding undisclosed junk fees

Incorrect or missing disclosures

Clear disclosures to clients

Influencing an appraiser’s value

43) Withdrawn applications must be reported to HMDA.

Yes

Only loans over $1 million

Only for denied applications

44) Thanks to TILA, consumers may:

Make informed credit decisions

Obtain lenders’ client lists

A & B

Terminate an unfavorable agreement within legal limits

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

Never

Yes

It depends

46) ECOA requires creditors to:

Avoid discouraging protected applicants

Base decisions on credit factors only

Treat applicants equally

All of the above

47) When was RESPA enacted?

1988

1955

1974

1972

Your score is

See also: