FREE NMLS Federal Mortgage-Related Laws Questions and Answers

Question 1

A borrower is refinancing their primary residence.
According to the Truth in Lending Act (TILA), how many copies of the Notice of Right to Rescind must each borrower with an ownership interest in the property receive?

Accepted Answer

Two copies

Answer

One copy

Answer

Three copies

Answer

It depends on the loan amount

Question 2

Under the Real Estate Settlement Procedures Act (RESPA), which of the following is NOT a required disclosure to the borrower?

Accepted Answer

Annual Percentage Rate (APR) Disclosure

Answer

Loan Estimate

Answer

Closing Disclosure

Answer

Annual Escrow Statement

Question 3

A mortgage loan originator asks a loan applicant about her plans to have more children in the future. This question is a violation of which federal law?

Accepted Answer

Equal Credit Opportunity Act (ECOA)

Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Truth in Lending Act (TILA)

Answer

Home Mortgage Disclosure Act (HMDA)

Question 4

A borrower applies for a loan on Monday, June 1st. According to the TILA-RESPA Integrated Disclosure (TRID) rule, what is the latest day the lender can provide the Loan Estimate to the borrower?

Accepted Answer

Thursday, June 4th

Answer

Tuesday, June 2nd

Answer

Wednesday, June 3rd

Answer

Friday, June 5th

Question 5

Which of the following is the primary purpose of the Home Mortgage Disclosure Act (HMDA)?

Accepted Answer

To require lenders to report data to help identify potential discriminatory lending patterns.

Answer

To ensure consumers receive disclosures about settlement service costs.

Answer

To protect consumers from identity theft and ensure credit report accuracy.

Answer

To provide borrowers with a three-day right to rescind certain loan transactions.

Question 6

Under the Fair and Accurate Credit Transactions Act (FACTA), a mortgage loan originator who sees a fraud alert on a borrower's credit report must:

Accepted Answer

Take reasonable steps to verify the identity of the applicant before proceeding.

Answer

Immediately deny the loan application.

Answer

Charge the borrower a higher interest rate to compensate for the risk.

Answer

Proceed with the loan as long as the borrower provides a written explanation.

A borrower is refinancing their primary residence.According to the Truth in Lending Act (TILA), how many copies of the Notice of Right to Rescind must each borrower with an ownership interest in the property receive?

A borrower is refinancing their primary residence.
According to the Truth in Lending Act (TILA), how many copies of the Notice of Right to Rescind must each borrower with an ownership interest in the property receive?