NMLS Federal Mortgage-Related Laws Questions and Answers

Question 1

A mortgage loan originator advertises a loan product with a "7% APR." According to the Truth in Lending Act (TILA), which of the following is also required to be included in the advertisement clearly and conspicuously?

Accepted Answer

A statement that the APR may increase after consummation, if applicable

Answer

The loan originator's unique identifier

Answer

The maximum possible interest rate for the loan's term

Answer

The contact information for the Consumer Financial Protection Bureau (CFPB)

Question 2

A real estate agent receives a quarterly bonus from a mortgage company, and the bonus amount is based on the number of clients the agent referred to that company. Which federal law is most likely being violated?

Accepted Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Home Mortgage Disclosure Act (HMDA)

Answer

Equal Credit Opportunity Act (ECOA)

Answer

Fair Housing Act (FHA)

Question 3

Under the Equal Credit Opportunity Act (ECOA), a lender must notify an applicant of the action taken on their completed application within how many days?

Accepted Answer

30 days

Answer

15 days

Answer

60 days

Answer

90 days

Question 4

Which of the following laws has the primary purpose of helping to detect and prevent discriminatory lending practices by requiring financial institutions to collect, report, and disclose data about their mortgage lending activity?

Accepted Answer

Home Mortgage Disclosure Act (HMDA)

Answer

Gramm-Leach-Bliley Act (GLBA)

Answer

Homeowners Protection Act (HPA)

Answer

Fair Credit Reporting Act (FCRA)

Question 5

A prospective borrower who is single and pregnant applies for a mortgage. It would be a violation of the Fair Housing Act and ECOA for the lender to consider which of the following in their underwriting decision?

Accepted Answer

The applicant's familial status

Answer

The applicant's credit score

Answer

The applicant's debt-to-income ratio

Answer

The appraised value of the property

Question 6

The Gramm-Leach-Bliley Act (GLBA) contains the Safeguards Rule, which requires financial institutions to take which of the following actions?

Accepted Answer

Develop a written information security plan to protect customer information.

Answer

Provide a Loan Estimate to all applicants within three business days.

Answer

Disclose the credit score used in the lending decision.

Answer

Notify the applicant of an adverse action within 30 days.