Practice Test Geeks(NMLS) National Mortgage Licensing System Practice Test
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Compliance and Oversight Flashcards

7 cards from real NMLS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Compliance and Oversight flashcards as text

  1. Under the SAFE Act, which federal agency has the authority to establish minimum standards for state licensing of mortgage loan originators?

    Answer: CFPB

    The Consumer Financial Protection Bureau (CFPB) has authority under the SAFE Act to establish minimum standards for state MLO licensing programs.

  2. What is the maximum civil money penalty per day that the CFPB can impose for knowing violations of federal consumer financial law under Tier 3 penalties?

    Answer: $1,000,000

    Tier 3 (knowing) violations under the Dodd-Frank Act can result in civil money penalties of up to $1,000,000 per day.

  3. Which of the following triggers a Suspicious Activity Report (SAR) filing requirement for a mortgage company?

    Answer: A transaction involving $5,000 or more that involves known or suspected money laundering

    A SAR must be filed for transactions of $5,000 or more where the institution knows, suspects, or has reason to suspect money laundering or other criminal activity.

  4. Under Regulation Z, what is the tolerance threshold for most closing cost disclosures on the Loan Estimate before a lender must issue a revised disclosure?

    Answer: 10% aggregate tolerance

    Most charges fall under a 10% aggregate tolerance, meaning the total of those fees cannot increase by more than 10% from the Loan Estimate to the Closing Disclosure.

  5. What does the Home Mortgage Disclosure Act (HMDA) primarily require lenders to do?

    Answer: Collect and report data on mortgage loan applications to detect discriminatory lending patterns

    HMDA requires covered lenders to collect, record, and report data about mortgage loan applications and originations to help identify discriminatory lending practices.

  6. A state-licensed MLO who wants to temporarily conduct business in another state while their new state license application is pending may do so under which provision?

    Answer: Temporary authority to operate under SAFE Act

    The 2018 SAFE Act amendment created a temporary authority provision allowing MLOs to operate in a new state while their license application is pending.

  7. Which examination type conducted by state regulators involves reviewing a sample of loan files to assess compliance with lending laws?

    Answer: File review examination

    File review examinations involve regulators sampling actual loan files to verify that the lender's practices comply with applicable laws and regulations.