FREE NMLS Uniform State Content (USC) Questions and Answers

Question 1

During a routine examination, a state mortgage regulatory authority discovers a licensed company is engaging in practices prohibited by state law.
Which of the following is a primary power the state authority has to immediately stop the prohibited activity?

Accepted Answer

Issue a cease and desist order.

Answer

Sentence the company's principals to prison time.

Answer

Immediately revoke the company's NMLS unique identifier.

Answer

Force the company to pay restitution to all affected consumers within 24 hours.

Question 2

According to the SAFE Act and model state laws, which of the following must a mortgage brokerage company obtain or maintain to provide a source of funds for potential consumer claims or state fines resulting from violations of the law?

Accepted Answer

A surety bond

Answer

Errors and Omissions (E&O) Insurance

Answer

A minimum number of employees with a clean credit history

Answer

A line of credit from a federally insured depository institution

Question 3

A state examiner is conducting an audit of a licensed mortgage lender. For a loan that was denied three and a half years ago, the lender must be able to produce the application records. What is the most common minimum record retention period mandated by state laws and regulations?

Accepted Answer

Three years

Answer

One year

Answer

Five years

Answer

Seven years

Question 4

A licensed mortgage brokerage firm is planning to move its only office to a new location across town. Based on the Uniform State Content model laws, what action is the brokerage most likely required to take?

Accepted Answer

Provide prior notification to the state regulatory authority of the address change.

Answer

Surrender its current license and reapply as a new business.

Answer

Publish a notice of the move in a newspaper of general circulation.

Answer

Cease all origination activity for 30 days while the change is processed.

Question 5

Under the model state laws outlined in the Uniform State Content, which of the following actions by a mortgage loan originator is a prohibited practice?

Accepted Answer

Depositing a borrower's check for an appraisal into the mortgage company's general operating account.

Answer

Receiving compensation that is a fixed percentage of the loan amount for every loan originated.

Answer

Referring a borrower to a specific title company that is not affiliated with the originator.

Answer

Collecting a reasonable fee from the borrower for a third-party credit report service.

Question 6

A state licensing agency has broad authority to enforce the SAFE Act. Which of the following actions is generally considered outside the direct power of the state mortgage regulator?

Accepted Answer

Prosecuting a licensee for criminal fraud in a court of law.

Answer

Subpoenaing witnesses and compelling the production of documents during an investigation.

Answer

Imposing a civil monetary penalty against an unlicensed individual acting as an MLO.

Answer

Conducting an on-site examination of a licensee's books and records.

During a routine examination, a state mortgage regulatory authority discovers a licensed company is engaging in practices prohibited by state law.Which of the following is a primary power the state authority has to immediately stop the prohibited activity?

During a routine examination, a state mortgage regulatory authority discovers a licensed company is engaging in practices prohibited by state law.
Which of the following is a primary power the state authority has to immediately stop the prohibited activity?