Federal Mortgage-Related Laws with
correct answer 2025
The penalties for paying or accepting an illegal referral fee are:
a. Fines of up to $5,000 and up to one year in prison
b. Fines of up to $10,000 and up to one year in prison
c. Fines of up to $10,000 and up to three years in prison
d. Fines of up to $20,000 and up to one year in prison - CORRECT ANSWER-b. Fines
of up to $10,000 and up to one year in prison
Finance charges always include which of the following?
a. Mortgage broker fee
b. Title insurance charges
c. Document preparation fees
d. Credit report fee - CORRECT ANSWER-a. Mortgage broker fee
For the purposes of rescinding a loan transaction, the phrase "business days" includes
every day of the week except:
a. Saturdays and Sundays
b. Sundays
c. Federal holidays
d. Sundays and federal holidays - CORRECT ANSWER-d. Sundays and federal
holidays
Five siblings have ownership rights to a property. If a refinance transaction affecting the
property is subject to rescission, how many of these individuals must submit a
rescission notice in order to void the loan?
a. Any one of the five
b. All five
c. A majority of the five
d. At least two of the five - CORRECT ANSWER-a. Any one of the five
Who must receive a Notice of Right to Cancel in a refinance transaction?
a. Anyone with ownership interest in the property
,b. Only parties who are signing the mortgage
c. Only parties with 51% or more ownership in the property
d. Only the primary borrower - CORRECT ANSWER-a. Anyone with ownership interest
in the property
John and Jane Brown are co-owners of a property which is their principal residence and
are entering into a refinance transaction that is subject to rescission. John is provided
with one copy of the Notice of Right to Cancel, and Jane receives no disclosures. What
is their deadline for rescission?
a. Midnight on the third day following closing
b. 72 hours after closing
c. Three years after closing
d. Three business days after closing - CORRECT ANSWER-c. Three years after closing
Which of the following fees is not included on the Good Faith Estimate?
a. Loan origination fees
b. Discount points
c. Real estate taxes
d. Real estate broker fees - CORRECT ANSWER-d. Real estate broker fees
The TIL Disclosure Statement for a regular loan transaction must be re-disclosed to a
borrower if:
a. The borrower rejects the APR stated on the initial TIL
b. The APR changes by more than one quarter of 1% before closing
c. The APR varies by more than one eighth of 1% before closing
d. The APR on the TIL and the GFE do not match - CORRECT ANSWER-c. The APR
varies by more than one eighth of 1% before closing
Lenders must report detailed information about loan transactions and demographic
information concerning borrowers. Which of the following laws creates that reporting
requirement?
a. HMDA
b. RESPA
c. TILA
d. Gramm-Leach-Bliley Act - CORRECT ANSWER-a. HMDA
An annual escrow analysis is used to do which of the following?
a. Report underwriting errors
b. Prevent escrow overages
c. Ensure the loan is properly amortized
d. Reduce burden on the servicer - CORRECT ANSWER-b. Prevent escrow overages
If an individual submits false information for the purposes of obtaining a federally
covered loan, he/she could face:
a. A fine of up to $1,000,000 and imprisonment
b. License suspension
, c. A misdemeanor conviction
d. A reprimand and loss of commission - CORRECT ANSWER-a. A fine of up to
$1,000,000 and imprisonment
When is the Mortgage Servicing Disclosure Statement provided to a borrower?
a. At closing
b. Within three business days after application
c. Three business days prior to closing
d. At the time loan servicing is transferred - CORRECT ANSWER-b. Within three
business days after application
An initial servicing transfer notice must be provided to a borrower at least ____ days
prior to the transfer of servicing on a loan.
a. 15
b. 30
c. 45
d. 60 - CORRECT ANSWER-a. 15
A lender has an affiliated business arrangement with a third-party service provider.
Under what circumstances can the lender require a borrower to use particular services
in a loan transaction?
a. If there are no kickbacks or referral fees
b. Only if the lender has an ownership interest of more than 1%
c. If there are no kickbacks or referral fees and the service provider is an attorney, credit
reporting agency, or appraiser
d. Under no circumstances; this is strictly prohibited by RESPA - CORRECT ANSWER-
c. If there are no kickbacks or referral fees and the service provider is an attorney, credit
reporting agency, or appraiser
What is the primary purpose of the Truth-in-Lending Act?
a. To ensure that creditors do not charge high interest rates on credit
b. To ensure that third-party service providers do not charge high fees
c. To ensure that creditors provide consumers clear disclosure of the terms of credit
d. To ensure that applicants have equal opportunity to obtain credit from lenders -
CORRECT ANSWER-c. To ensure that creditors provide consumers clear disclosure of
the terms of credit
Which of the following is not true regarding RESPA's requirement to provide a list of
homeownership counselors?
a. The list may be no more than 60 days old
b. The list must be obtained from the CFPB, or from HUD or CFPB data
c. It is the lender's responsibility to ensure that the applicant receives this list
d. Reverse mortgage transactions and timeshare plans are exempt from this
requirement - CORRECT ANSWER-a. The list may be no more than 60 days old
correct answer 2025
The penalties for paying or accepting an illegal referral fee are:
a. Fines of up to $5,000 and up to one year in prison
b. Fines of up to $10,000 and up to one year in prison
c. Fines of up to $10,000 and up to three years in prison
d. Fines of up to $20,000 and up to one year in prison - CORRECT ANSWER-b. Fines
of up to $10,000 and up to one year in prison
Finance charges always include which of the following?
a. Mortgage broker fee
b. Title insurance charges
c. Document preparation fees
d. Credit report fee - CORRECT ANSWER-a. Mortgage broker fee
For the purposes of rescinding a loan transaction, the phrase "business days" includes
every day of the week except:
a. Saturdays and Sundays
b. Sundays
c. Federal holidays
d. Sundays and federal holidays - CORRECT ANSWER-d. Sundays and federal
holidays
Five siblings have ownership rights to a property. If a refinance transaction affecting the
property is subject to rescission, how many of these individuals must submit a
rescission notice in order to void the loan?
a. Any one of the five
b. All five
c. A majority of the five
d. At least two of the five - CORRECT ANSWER-a. Any one of the five
Who must receive a Notice of Right to Cancel in a refinance transaction?
a. Anyone with ownership interest in the property
,b. Only parties who are signing the mortgage
c. Only parties with 51% or more ownership in the property
d. Only the primary borrower - CORRECT ANSWER-a. Anyone with ownership interest
in the property
John and Jane Brown are co-owners of a property which is their principal residence and
are entering into a refinance transaction that is subject to rescission. John is provided
with one copy of the Notice of Right to Cancel, and Jane receives no disclosures. What
is their deadline for rescission?
a. Midnight on the third day following closing
b. 72 hours after closing
c. Three years after closing
d. Three business days after closing - CORRECT ANSWER-c. Three years after closing
Which of the following fees is not included on the Good Faith Estimate?
a. Loan origination fees
b. Discount points
c. Real estate taxes
d. Real estate broker fees - CORRECT ANSWER-d. Real estate broker fees
The TIL Disclosure Statement for a regular loan transaction must be re-disclosed to a
borrower if:
a. The borrower rejects the APR stated on the initial TIL
b. The APR changes by more than one quarter of 1% before closing
c. The APR varies by more than one eighth of 1% before closing
d. The APR on the TIL and the GFE do not match - CORRECT ANSWER-c. The APR
varies by more than one eighth of 1% before closing
Lenders must report detailed information about loan transactions and demographic
information concerning borrowers. Which of the following laws creates that reporting
requirement?
a. HMDA
b. RESPA
c. TILA
d. Gramm-Leach-Bliley Act - CORRECT ANSWER-a. HMDA
An annual escrow analysis is used to do which of the following?
a. Report underwriting errors
b. Prevent escrow overages
c. Ensure the loan is properly amortized
d. Reduce burden on the servicer - CORRECT ANSWER-b. Prevent escrow overages
If an individual submits false information for the purposes of obtaining a federally
covered loan, he/she could face:
a. A fine of up to $1,000,000 and imprisonment
b. License suspension
, c. A misdemeanor conviction
d. A reprimand and loss of commission - CORRECT ANSWER-a. A fine of up to
$1,000,000 and imprisonment
When is the Mortgage Servicing Disclosure Statement provided to a borrower?
a. At closing
b. Within three business days after application
c. Three business days prior to closing
d. At the time loan servicing is transferred - CORRECT ANSWER-b. Within three
business days after application
An initial servicing transfer notice must be provided to a borrower at least ____ days
prior to the transfer of servicing on a loan.
a. 15
b. 30
c. 45
d. 60 - CORRECT ANSWER-a. 15
A lender has an affiliated business arrangement with a third-party service provider.
Under what circumstances can the lender require a borrower to use particular services
in a loan transaction?
a. If there are no kickbacks or referral fees
b. Only if the lender has an ownership interest of more than 1%
c. If there are no kickbacks or referral fees and the service provider is an attorney, credit
reporting agency, or appraiser
d. Under no circumstances; this is strictly prohibited by RESPA - CORRECT ANSWER-
c. If there are no kickbacks or referral fees and the service provider is an attorney, credit
reporting agency, or appraiser
What is the primary purpose of the Truth-in-Lending Act?
a. To ensure that creditors do not charge high interest rates on credit
b. To ensure that third-party service providers do not charge high fees
c. To ensure that creditors provide consumers clear disclosure of the terms of credit
d. To ensure that applicants have equal opportunity to obtain credit from lenders -
CORRECT ANSWER-c. To ensure that creditors provide consumers clear disclosure of
the terms of credit
Which of the following is not true regarding RESPA's requirement to provide a list of
homeownership counselors?
a. The list may be no more than 60 days old
b. The list must be obtained from the CFPB, or from HUD or CFPB data
c. It is the lender's responsibility to ensure that the applicant receives this list
d. Reverse mortgage transactions and timeshare plans are exempt from this
requirement - CORRECT ANSWER-a. The list may be no more than 60 days old
