NMLS TEST FINAL EXAM 2 VERSIONS (VERSION A AND B) WI
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TH QUESTIONS AND ANSWERS (VERIFIED ANSWERS GRADE
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D A+) LATEST UPDATE 2024/2025
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How long should you keep mortgage loan records under ECOA? -
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CORRECT ANSWER 25 months
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How long is the Do Not Call Registry good? -
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CORRECT ANSWER When the number is disconnected, reassigned, or
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when the consumer chooses to remove it
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How many months cushion are allowed under the escrow account rules?
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- CORRECT ANSWER 2 months cushion
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When are escrow accounts reviewed and what amount of overage could cau
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se a refund to the borrower? -
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CORRECT ANSWER Renewed annually and if the account has more th
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an $50 in overage it will be refunded
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What properties are covered under RESPA? -
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CORRECT ANSWER Single, 1-
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4 family dwellings, condos, and manufactured homes placed on a lot
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RESPA imposes restriction on p p p p ? - CORRECT ANSWER
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Amount collected for escrow accounts p p p p
,When advertising, the APR must be present when
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CORRECT ANSWER A rate is quoted or present
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RESPA was put in place to? -
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pCORRECT ANSWER Limit amounts in escrow, eliminate kickbacks , an
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d educate the borrowers on the closing cost, it does NOT regulate interest ra
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tes
According to RESPA guidelines, failure to comply with Section 8 could res
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ult in a penalty of? -
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CORRECT ANSWER $10,000 and/or 1 year prison terms for each incid
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ent
Redlining is best defined as: - p p p p p
CORRECT ANSWER Failing to end to certain geographic areas
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Who created and monitors a companies Red Flag Rules? -
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CORRECT ANSWER Federal Trade Commission (FTC Red Flag Rules
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)
At what point in a conventional will the PMI be removed? -
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CORRECT ANSWER When the principal balance reaches 78% of the ori
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ginal value or purchase price
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When does a referring party have to provide the ABA form to the borrowe
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r? - CORRECT ANSWER Before or at the time of the referral
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Advertising a mortgage loan product that a lender is not able to offer is a vio
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lation of what federal law? - CORRECT ANSWER TILA/reg Z
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,What is the Act that requires a financial entity to provide customers with a p
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rivacy notice, as well as an "opt out notice", regarding the customer's perso
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nal information? - CORRECT ANSWER Gramm-Leach Bliley Act
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Under the GLB Act, nonpublic information can only be shared with affiliat
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es of the financial institution or affiliates of related third parties, even if the
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customer does not opt out. (T/F) - CORRECT ANSWER TRUE
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What information must be provided to the borrower when referrals take pla
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ce between affiliated businesses? -
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CORRECT ANSWER An Affiliated Business Disclosure Statement as
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mandated by RESPA p p
What is the primary purpose of the Gramm-Leach Bliley Act? -
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CORRECT ANSWER Notice of right to financial privacy and right to opt
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out of sharing personal information
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Along with the Fair and Accurate Credit Transactions Act Disposal Rule, w
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hat GLB Act provision ensures that customer's information is not handled o
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r maintained carelessly and is disposed of properly? -
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CORRECT ANSWER GLB Act's Safeguards rule p p p p p
What is the difference between the GLB Act Safeguards Rule and the FAC
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T Act Disposal Rule? -
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CORRECT ANSWER GLB Act's Safeguards Rule requires all companie
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s to design, implement, and maintain safeguards to protect customer inform
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ation from theft... FACTp p p
, Act requires businesses to take appropriate measures to safeguard from thef
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t in the disposal of consumer report
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What is a "Federally Related Loan"? -
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CORRECT ANSWER Loans secured by a first or subordinate lien on a re
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sidential property that meets stated RESPA criteria. The definition is so bro
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ad it covers virtually every home loan secured by a mortgage.
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Most of HUD's enforcement actions result due to section 8 of RESPA. Wha
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t is addressed in Section 8? -
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pCORRECT ANSWER Prohibited against giving or receiving a fee, kickb p p p p p p p p p
ack, or anything of value pursuant to an agreement or understanding for the
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referral of settlement business p p p
What is an affiliated business arrangement? -
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pCORRECT ANSWER An arrangement in which one person refers appl p p p p p p p p p
icants to a settlement service provider with whom the referring person has
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pan ownership interest of 1% or more
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What customer protection does Section 10 of RESPA provide? -
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CORRECT ANSWER Protect consumers by ensuring borrowers know th p p p p p p p p
e amount they are to deposit into escrow by preventing lenders from overch
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arging borrowers for escrow depositsp p p p
What are the consequences for violating Section 8 of RESPA? -
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CORRECT ANSWER Up to $10,000 and/or one year in prison
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p p p p p p p p p p
TH QUESTIONS AND ANSWERS (VERIFIED ANSWERS GRADE
p p p p p p
D A+) LATEST UPDATE 2024/2025
p p p p
How long should you keep mortgage loan records under ECOA? -
p p p p p p p p p p
CORRECT ANSWER 25 months
p p p p
How long is the Do Not Call Registry good? -
p p p p p p p p p
CORRECT ANSWER When the number is disconnected, reassigned, or
p p p p p p p p p p
when the consumer chooses to remove it
p p p p p p
How many months cushion are allowed under the escrow account rules?
p p p p p p p p p p
- CORRECT ANSWER 2 months cushion
p p p p p
When are escrow accounts reviewed and what amount of overage could cau
p p p p p p p p p p p
se a refund to the borrower? -
p p p p p p
CORRECT ANSWER Renewed annually and if the account has more th
p p p p p p p p p p p
an $50 in overage it will be refunded
p p p p p p p
What properties are covered under RESPA? -
p p p p p p
CORRECT ANSWER Single, 1-
p p p p
4 family dwellings, condos, and manufactured homes placed on a lot
p p p p p p p p p p
RESPA imposes restriction on p p p p ? - CORRECT ANSWER
p p p
Amount collected for escrow accounts p p p p
,When advertising, the APR must be present when
p p p p p p p p ?- p
CORRECT ANSWER A rate is quoted or present
p p p p p p p p
RESPA was put in place to? -
p p p p p p
pCORRECT ANSWER Limit amounts in escrow, eliminate kickbacks , an
p p p p p p p p p
d educate the borrowers on the closing cost, it does NOT regulate interest ra
p p p p p p p p p p p p p
tes
According to RESPA guidelines, failure to comply with Section 8 could res
p p p p p p p p p p p
ult in a penalty of? -
p p p p p
CORRECT ANSWER $10,000 and/or 1 year prison terms for each incid
p p p p p p p p p p p
ent
Redlining is best defined as: - p p p p p
CORRECT ANSWER Failing to end to certain geographic areas
p p p p p p p p p
Who created and monitors a companies Red Flag Rules? -
p p p p p p p p p
CORRECT ANSWER Federal Trade Commission (FTC Red Flag Rules
p p p p p p p p p
)
At what point in a conventional will the PMI be removed? -
p p p p p p p p p p p
CORRECT ANSWER When the principal balance reaches 78% of the ori
p p p p p p p p p p p
ginal value or purchase price
p p p p
When does a referring party have to provide the ABA form to the borrowe
p p p p p p p p p p p p p
r? - CORRECT ANSWER Before or at the time of the referral
p p p p p p p p p p p
Advertising a mortgage loan product that a lender is not able to offer is a vio
p p p p p p p p p p p p p p p
lation of what federal law? - CORRECT ANSWER TILA/reg Z
p p p p p p p p p
,What is the Act that requires a financial entity to provide customers with a p
p p p p p p p p p p p p p p
rivacy notice, as well as an "opt out notice", regarding the customer's perso
p p p p p p p p p p p p
nal information? - CORRECT ANSWER Gramm-Leach Bliley Act
p p p p p p p
Under the GLB Act, nonpublic information can only be shared with affiliat
p p p p p p p p p p p
es of the financial institution or affiliates of related third parties, even if the
p p p p p p p p p p p p p p
customer does not opt out. (T/F) - CORRECT ANSWER TRUE
p p p p p p p p p
What information must be provided to the borrower when referrals take pla
p p p p p p p p p p p
ce between affiliated businesses? -
p p p p
CORRECT ANSWER An Affiliated Business Disclosure Statement as
p p p p p p p p p
mandated by RESPA p p
What is the primary purpose of the Gramm-Leach Bliley Act? -
p p p p p p p p p p
CORRECT ANSWER Notice of right to financial privacy and right to opt
p p p p p p p p p p p p
out of sharing personal information
p p p p
Along with the Fair and Accurate Credit Transactions Act Disposal Rule, w
p p p p p p p p p p p
hat GLB Act provision ensures that customer's information is not handled o
p p p p p p p p p p p
r maintained carelessly and is disposed of properly? -
p p p p p p p p
CORRECT ANSWER GLB Act's Safeguards rule p p p p p
What is the difference between the GLB Act Safeguards Rule and the FAC
p p p p p p p p p p p p
T Act Disposal Rule? -
p p p p
CORRECT ANSWER GLB Act's Safeguards Rule requires all companie
p p p p p p p p p
s to design, implement, and maintain safeguards to protect customer inform
p p p p p p p p p p
ation from theft... FACTp p p
, Act requires businesses to take appropriate measures to safeguard from thef
p p p p p p p p p p
t in the disposal of consumer report
p p p p p p
What is a "Federally Related Loan"? -
p p p p p p
CORRECT ANSWER Loans secured by a first or subordinate lien on a re
p p p p p p p p p p p p p
sidential property that meets stated RESPA criteria. The definition is so bro
p p p p p p p p p p p
ad it covers virtually every home loan secured by a mortgage.
p p p p p p p p p p
Most of HUD's enforcement actions result due to section 8 of RESPA. Wha
p p p p p p p p p p p p
t is addressed in Section 8? -
p p p p p p
pCORRECT ANSWER Prohibited against giving or receiving a fee, kickb p p p p p p p p p
ack, or anything of value pursuant to an agreement or understanding for the
p p p p p p p p p p p p p
referral of settlement business p p p
What is an affiliated business arrangement? -
p p p p p p
pCORRECT ANSWER An arrangement in which one person refers appl p p p p p p p p p
icants to a settlement service provider with whom the referring person has
p p p p p p p p p p p
pan ownership interest of 1% or more
p p p p p p
What customer protection does Section 10 of RESPA provide? -
p p p p p p p p p
CORRECT ANSWER Protect consumers by ensuring borrowers know th p p p p p p p p
e amount they are to deposit into escrow by preventing lenders from overch
p p p p p p p p p p p p
arging borrowers for escrow depositsp p p p
What are the consequences for violating Section 8 of RESPA? -
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CORRECT ANSWER Up to $10,000 and/or one year in prison
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