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NMLS EXAMS WITH VERIFIED
QUESTIONS AND CORRECT
ANSWERS
__________ requires states to establish and adopt minimum provisions and uniform standards for the licensing and registration of mortgage lending businesses, mortgage brokers and mortgage loan originators. Additionally, this system has been designed to streamline the process of licensing mortgage professionals who do business in multiple jurisdictions. Answers A. The Housing and Economic Recovery Act (HERA). B. The Home Mortgage Disclosure Act (HMDA) C. The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) D. Real Estate Settlement Procedures Act (RESPA)
- ANSWERS-C. ___________ can be defined as the lending of money at excessive interest rates, or rates that are above the legal limit. Answers A. Unfair business practices B. Usury C. Subprime lending D. Non-traditional practices
- ANSWERS-B. "Federal banking agencies" include: Answers
A. The Director of the Office of Thrift Supervision, the Board of Governors of the Federal Reserve System, and FDIC B. Fannie Mae and Freddie Mac C. The Comptroller of the Currency and the National Credit Union Administration D. A and C
- ANSWERS-D. "Loan processors and underwriters" may not: Answers A. Answer consumer questions B. Receive, collect, distribute or analyze information common for the processing of a residential mortgage loan C. Perform clerical or support duties D. Communicate with a consumer to obtain the information necessary for the completion of an application
- ANSWERS-D. 32.) California mortgage loan originators or required to register with __________. Answers A. The Bureau of Loans B. The Secretary of State C. The Nationwide Mortgage Licensing System (NMLS) D. The California Department of Banking
- ANSWERS-C. A "Registered Mortgage Loan Originator": Answers A. Is registered with NMLS but has not completed all the prerequisites for licensing
A borrower cannot be required to pay interest on the principal balance of a loan secured by a mortgage on real property more than how many days prior the date that loan proceeds are disbursed from escrow? Answers A. One (1) day B. Three (3) days C. Five (5) days D. Seven (7) days
- ANSWERS-A. A borrower's file requires a VOD, however currently, the borrower has no money but is expecting an inheritance check. What can the MLO do? Answers A. The MLO may request the VOD takes place after the funds are deposited B. Request the borrower to take out a pay day advance loan, put it in his account, and repay it once the verification is done C. The MLO may loan the borrower money and take it back after the VOD is complete
- ANSWERS-A. A foreclosure consultant may not charge a fee in which exceeds ___ percent per annum of a loan which the consultant makes to the owner. Answers A. 10% B. 20% C. 3% D. 5%
- ANSWERS-A.
A late charge may be imposed for late payment of an installment due on a mortgage loan or deed of trust but cannot exceed greater than $5 or ___ percent of the installment due. Answers A. One (1) percent B. Three (3) percent C. Five (5) percent D. Ten (10) percent
- ANSWERS-C. A mortgage broker's fiduciary duty to a client involves which of the following? Answers A. A duty of exclusivity B. Full disclosure to the client, even at the expense of another client C. Putting the client's economic interest ahead of the broker's own D. Securing the best loan which the client could hope to find
- ANSWERS-C. A mortgage company advertises for loans in both Spanish and English. Which of the following statements is true? Answers A. The mortgage company must provide the key disclosures such as the TIL and Good Faith Estimate in Spanish to their Spanish speaking clients. B. At least 40% of the employees of the company must be bilingual. C. The company must have at least one native Spanish speaker available during regular business hours. D. The actual loan documents (note, mortgage, deed, etc.) must be provided in Spanish.
- ANSWERS-A.
A person cannot serve as an officer, director, or other key employee or control person of a residential mortgage lender if he has been held liable in a civil or administrative action within how many years? Answers A. Three (3) years B. Five (5) years C. Seven (7) years D. Ten (10) years
- ANSWERS-B. A person receiving monthly principal and interest payment is which of the following? Answers A. Lender / Servicer B. Broker C. Mortgage Banker D. Escrow Company
- ANSWERS-A. A prepayment charge can be imposed on any amount prepaid in any twelve (12) month period which exceeds __ percent of the original principal amount of the loan. Answers A. 10% B. 15% C. 20% D. 25%
- ANSWERS-C. According to the legal definition, a mortgage: Answers A. Does not include an estate for years in real property
B. Involved a hypothecation which necessitates a change in possession C. Can be created or renews orally or in writing D. Can be created on property held adversely to the mortgagor
- ANSWERS-D. Advertisements that make a representation of a specific installment in repayment of a loan must also make an equally prominent disclosure of the following information about the loan, except: Answers A. Down payment amount B. Simple annual interest rate and annual percentage rate C. Number, amount and period of payments scheduled to the date of maturity D. Balance due at maturity (balloon payment) if not fully amortized
- ANSWERS-A. After a disciplinary order is made final, a licensee has how many days to ask the court to restrain enforcement of the order? Answers A. Five (5) days B. Fifteen (15) days C. Thirty (30) days D. Sixty (60) days
- ANSWERS-B All licenses for mortgage loan originators will now expire __________, and continuing education for renewal should be completed __________ each year, to be effective the following year. Answers A. One year from the date of issuance/one month before expiration
An applicant for a residential mortgage lender or servicer license must agree to keep and maintain business records and other information required by law for how many months from the date of final entry of any mortgage loan? Answers A. Six (6) months B. Twelve (12) months C. Twenty four (24) months D. Thirty Six (36) months
- ANSWERS-D An application for a loan originator license may be denied for all the following reasons EXCEPT if the applicant: Answers A. Pled guilty to a felony involving personal conduct nine (9) years ago B. Has not completed pre-licensing education requirements C. Had a loan originator licensed revoked in TN three (3) years ago D. Has failed to demonstrate the required financial responsibility
- ANSWERS-A An attorney is helping a client handle their estate, and the attorney is handling a variety of real estate issues. Which of the following would be in violation of the attorney's mortgage originator exemption? Answers A. The attorney suggests that the client's real estate holdings be placed into a trust. B. The attorney reviews the client's loan closing documents for accuracy. C. The attorney reviews the good faith estimate and truth in lending disclosures with the client, and
explains the client's legal obligations in regards to the documents. D. The attorney suggests that the client refinance their loan to a lower interest rate, and the lender pays the attorney a monthly fee for his services.
- ANSWERS-D. An individual engaging in mortgage loan modification or forbearance activities for a fee who takes a power of attorney from a borrower: Answers A. Is guilty of prohibited conduct and may be imprisoned for up to one (1) year in jail. B. Is guilty of prohibited conduct and may be fined for up to $5,000 per offense. C. Is guilty of prohibited conduct and may be imprisoned and/or fined for up to $10,000 and one (1) year in jail D. Is guilty of prohibited conduct and may be imprisoned for up to two (2) years in jail. Incorrec
- ANSWERS-A An individual may retake a test three (3) consecutive times, provided that each retake occurs at least thirty (30) days after the preceding test. After failing three (3) consecutive tests, an individual shall wait at least _______ months before taking the test again. Answers A. Six (6) B. Three (3) C. Two (2) D. One (1)
- ANSWERS-A. As a broker, you only have to put your NMLS number on what type of materials? Answers
Answers A. Expired B. Suspended C. Revoked D. Surrendered
- ANSWERS-A. Chuck, the owner of a mortgage lender, hires his good friend Eric as a loan originator. Chuck trusts Eric to do his job and does not interfere or interrupt Eric in any way when Eric is originating. Later, it is brought to the attention of the director that Eric has committed a pattern of misrepresentations and deceitful practices. Which of the following statements is not true about this situation? Answers A. Chuck may have to pay restitution to the injured parties. B. Only Eric will face fines or other penalties C. Chuck could have his license suspended or revoked D. Eric could have his license suspended or revoked
- ANSWERS-B. Continuing education courses are good until what date? Answers A. December 31st of each year B. October 31st of each year C. January 1st of each year D. December 31st, every odd numbered year
- ANSWERS-A. Control of a licensee is presumed to exist if a person or entity owns, controls, or holds ____ percent or more of the voting power of the licensee.
Answers A. 3% B. 5% C. 7% D. 10%
- ANSWERS-D Courtney is a processor for a conventional lender and is exempted from licensure laws. Which of the following actions would be a violation of her exemption? Answers A. The originator is out of the office, and Courtney contacts everyone in the pipeline to let them know the current rates, so that the borrower can decide whether or not to lock their loan. B. Courtney contacts a borrower and informs her that the loan cannot close until the borrower provides their most recent pay stub. C. Courtney reviews the loan file and puts her concerns about whether or not the loan should fund in the file for the underwriter to review. D. Courtney reviews the Uniform Residential Loan Application (1003) for accuracy and informs the originator of the results of her review.
- ANSWERS-A. How long do you have to notify the Department of Real Estate or the DRE if you change the address of the location? Answers A. Immediately (no later than the next business day) B. Thirty (30) days C. Ninety (90) days
If a licensee makes a loan to a borrower without first determining the borrower's ability to repay the loan, the Director may do all of the following except: Answers A. Suspend a license B. Deny a license C. Revoke a license D. Approve a license
- ANSWERS-D. If there is something that triggers re-disclosure, how long must you wait to sign loan documents? Answers A. One (1) business day B. Three (3) days C. Fifteen (15) days D. Thirty (30) days
- ANSWERS-B If you fail to appear for a hearing regarding fraudulent acts you have committed, what is the end result? Answers A. Suspension of your license B. Revocation of your license C. Your license becomes expired D. Nothing. Your license stays active and clear.
- ANSWERS-A If you have your license revoked, when can you re-apply? Answers A. Thirty (30) days
B. Six (6) months C. One (1) year D. Never
- ANSWERS-D If you put a rate in an advertisement, what is sufficient proof that the advertisement is accurate? Answers A. A lock in agreement from that date with the particular rate locked in B. A previous advertisement C. Funded loan from another company
- ANSWERS-A If your license is denied, how long do you have to file an appeal? Answers A. Three (3) business days B. Five (5) days C. Fifteen (15) days D. Thirty (30) days
- ANSWERS-C In 2009, the California legislatures passed Senate Bill 36 and Assembly Bill 34 to comply with the SAFE Act of 2008 and participate in the NMLS. These bills changed state regulations to do all of the following except: Answers A. Increase funding to investigate fraud in the mortgage lending industry B. Bring California State law into compliance with the federal Housing and Economic Recovery Act of 2008 (HERA) and its Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act)
D. Good idea
- ANSWERS-A. It is considered a prohibited practice to __________ misrepresent or conceal a material fact, term, or condition related to an application for a mortgage loan or a borrower. Answers A. Accidentally B. Repeatedly C. Maliciously D. Intentionally
- ANSWERS-D. May a lender require a borrower to use a trust account for the payment of taxes and property insurance premiums as condition for granting a loan secured by a mortgage on a single-family, owner-occupied dwelling? Answers A. Yes, if the loan amount is 90% LTV or greater of the appraised value of the property B. Yes, if the loan amount is 80% LTV or greater of the appraised value of the property C. Yes, if the loan amount is 75% LTV or greater of the appraised value of the property D. No
- ANSWERS-A. Mike is reviewing his criminal background. Which of the following convictions would most likely preclude him from ever obtaining a license to originate mortgage loans? Answers A. Mike was convicted of shoplifting a "Barry Manilow's Greatest Hits" CD in 1995. B. Mike was convicted of felony DUI after being pulled over on his way home from a Groundhog's Day party.
C. Mike was convicted for illegally obtaining insurance funds when he filed a claim for his stolen minivan, and it was discovered that the car was actually in his garage. D. Mike has numerous unpaid parking tickets. No, this is incorrect.
- ANSWERS-C. Mortgage loan originators are required to __________ and make reasonable efforts to procure a mortgage loan on behalf of the borrower. Answers A. Collect a fee. B. Sign a contract C. Use due diligence D. Send a disclosure
- ANSWERS-C. Mortgage loan originators in the State of California are licensed by the following: Answers A. The Department of Banking, Bureau of Loans B. The Office of the Secretary of State C. The California Board of Professional Standards D. Department of Corporations and Department of Real Estate
- ANSWERS-D. Mortgage loan originators may not collect __________ mortgage broker fees before a conditional commitment is obtained from the lender by the mortgage broker. Answers A. Any B. More than 10% of the.
