NMLS MLO EXAM – MORTGAGE LOAN ORIGINATOR LICENSING PREPARATION – COMPREHENSIVE
PRACTICE QUESTIONS AND EXAM REVIEW GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
1. What must a borrower do to avoid having late payments reported to a credit
bureau?: Pay within 30 days of due date
2. Max penalty if a borrower is required to use a specific title company or
settlement agent?: 3 times the fee
3. What should not be over-weighted in an analysis of borrower repayment
capacity?: Credit scores
4. Max prepayment penalty on residential mortgages in the first year of the
loan: 3%
5. What must condominium associations do with respect to property insur-
ance?: Keep a "blanket" policy that protects the entire structure
6. If a lender is planning on referring a borrower to a title company that
the lender has ownership in, when must the AFBA must be provided to the
borrower?: Before the referral to the title company is made
7. Website to obtain copy of your credit report that the credit bureaus are
required to provide once per year at no charge: annualcreditreport.com
8. 2/3/6 caps: ARM initial adjustment max is 2%, subsequent adjustment period max is 3%, and lifetime cap of
6%
9. What does FHLB stand for and what do they provide?: Federal Home Loan Bank, and
they provide advances to financial institutions for residential mortgage loans
10. According to the Dodd-Frank Act, how much risk must be retained by the
securitizer for a loan that does not meet QRM guidelines?: 5%
11. On a purchase transaction, what document contains the purchase price for
a property?: Sales Contract
12. After a loan has been closed and funded, the creditor notices a tolerance
violation with a fee between the LE and CD. How long does the creditor have
to reimburse the borrower for the overcharge before being considered in
violation of the TRID rule?: 60 days after closing
13. Overt Discrimination: Refusing service to anyone of a certain race, ethnicity, etc.
14. Under ECOA can you ask how many children a borrower has?: No
15. What document specifies that a property is being used as security in the
event of nonpayment of a debt?: Mortgage
, NMLS MLO EXAM – MORTGAGE LOAN ORIGINATOR LICENSING PREPARATION – COMPREHENSIVE
PRACTICE QUESTIONS AND EXAM REVIEW GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
16. On the LE, which piece of data tells applicants how much they will be paying
in interest over the life of the loan as a percentage of the loan?: TIP (Total Interest
Percentage)
17. COFI comes from what region in the country?: The 11th Federal Home Loan Bank (Arizona,
California, and Nevada)
18. What disclosure is required to be provided to the applicant within 3 days of
application under reg x?: Mortgage Loan Servicing Disclosure
19. Verification of cash used in a closing is documented by:: last 2-3 months bank
statements
20. The finance charge is the total cost of:: the loan in dollars, including points and mortgage
insurance
21. What IRS forms would you requrest from a borrower who is 40% sharehold-
er in a C-Corporation?: Form 1120
22. Impersonating someone else in an attempt to obtain their personal finan-
cial information is called:: Pretexting
23. What type of funding occurs when a lender obtains funds from a line of
credit at a commercial bank?: Warehouse funding
24. Late fee for FHA and VA loans: 4%
25. Ginnie Mae loans: Guarantees
26. A mortgage on personal property is:: Chattel mortgage
27. Who can transfer title insurance policy?: Mortgagee
28. What document is NOT recorded?: The Note
29. The borrower's IOU is:: The Note
30. Escheat: When a property owner dies without a will and the state is unable to locate any heirs, so the state
claims the property.
31. Disintermediation: The withdrawal of funds out of savings accounts and into stocks and bonds
32. Eminent Domain: The condemnation of private property for public good
33. Warranty Deed: The document conveying title from one party to another and guaranteeing that the title
is good
34. Another name for an installment contract: Contract for Deed
35. An outstanding claim on a property that limits the ability to sell the property
is a: Title Defect
PRACTICE QUESTIONS AND EXAM REVIEW GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
1. What must a borrower do to avoid having late payments reported to a credit
bureau?: Pay within 30 days of due date
2. Max penalty if a borrower is required to use a specific title company or
settlement agent?: 3 times the fee
3. What should not be over-weighted in an analysis of borrower repayment
capacity?: Credit scores
4. Max prepayment penalty on residential mortgages in the first year of the
loan: 3%
5. What must condominium associations do with respect to property insur-
ance?: Keep a "blanket" policy that protects the entire structure
6. If a lender is planning on referring a borrower to a title company that
the lender has ownership in, when must the AFBA must be provided to the
borrower?: Before the referral to the title company is made
7. Website to obtain copy of your credit report that the credit bureaus are
required to provide once per year at no charge: annualcreditreport.com
8. 2/3/6 caps: ARM initial adjustment max is 2%, subsequent adjustment period max is 3%, and lifetime cap of
6%
9. What does FHLB stand for and what do they provide?: Federal Home Loan Bank, and
they provide advances to financial institutions for residential mortgage loans
10. According to the Dodd-Frank Act, how much risk must be retained by the
securitizer for a loan that does not meet QRM guidelines?: 5%
11. On a purchase transaction, what document contains the purchase price for
a property?: Sales Contract
12. After a loan has been closed and funded, the creditor notices a tolerance
violation with a fee between the LE and CD. How long does the creditor have
to reimburse the borrower for the overcharge before being considered in
violation of the TRID rule?: 60 days after closing
13. Overt Discrimination: Refusing service to anyone of a certain race, ethnicity, etc.
14. Under ECOA can you ask how many children a borrower has?: No
15. What document specifies that a property is being used as security in the
event of nonpayment of a debt?: Mortgage
, NMLS MLO EXAM – MORTGAGE LOAN ORIGINATOR LICENSING PREPARATION – COMPREHENSIVE
PRACTICE QUESTIONS AND EXAM REVIEW GUIDE A+ VERIFIED LATEST VERSION (2026-2027)
16. On the LE, which piece of data tells applicants how much they will be paying
in interest over the life of the loan as a percentage of the loan?: TIP (Total Interest
Percentage)
17. COFI comes from what region in the country?: The 11th Federal Home Loan Bank (Arizona,
California, and Nevada)
18. What disclosure is required to be provided to the applicant within 3 days of
application under reg x?: Mortgage Loan Servicing Disclosure
19. Verification of cash used in a closing is documented by:: last 2-3 months bank
statements
20. The finance charge is the total cost of:: the loan in dollars, including points and mortgage
insurance
21. What IRS forms would you requrest from a borrower who is 40% sharehold-
er in a C-Corporation?: Form 1120
22. Impersonating someone else in an attempt to obtain their personal finan-
cial information is called:: Pretexting
23. What type of funding occurs when a lender obtains funds from a line of
credit at a commercial bank?: Warehouse funding
24. Late fee for FHA and VA loans: 4%
25. Ginnie Mae loans: Guarantees
26. A mortgage on personal property is:: Chattel mortgage
27. Who can transfer title insurance policy?: Mortgagee
28. What document is NOT recorded?: The Note
29. The borrower's IOU is:: The Note
30. Escheat: When a property owner dies without a will and the state is unable to locate any heirs, so the state
claims the property.
31. Disintermediation: The withdrawal of funds out of savings accounts and into stocks and bonds
32. Eminent Domain: The condemnation of private property for public good
33. Warranty Deed: The document conveying title from one party to another and guaranteeing that the title
is good
34. Another name for an installment contract: Contract for Deed
35. An outstanding claim on a property that limits the ability to sell the property
is a: Title Defect
