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
Under the Equal Credit Opportunity Act (ECOA), how long must a creditor retain records of adverse action notices?
Answer: 25 months
ECOA requires creditors to retain records of adverse action notices and the credit application for 25 months after the action is taken.
Which of the following is a key element of an effective Bank Secrecy Act (BSA) compliance program for a mortgage company?
Answer: Designating a compliance officer, establishing internal controls, and providing ongoing training
An effective BSA/AML compliance program must include a designated compliance officer, written internal controls, independent testing, and ongoing employee training.
Under TRID, if a valid changed circumstance occurs, how many business days does a lender have to issue a revised Loan Estimate?
Answer: 3 business days
When a valid changed circumstance occurs, the lender must provide a revised Loan Estimate within three business days of receiving information supporting the change.
What is 'disparate impact' in the context of fair lending compliance?
Answer: A facially neutral policy that disproportionately affects a protected class without business justification
Disparate impact occurs when a facially neutral lending policy disproportionately harms a protected class and cannot be justified by legitimate business necessity.
Under the Homeowners Protection Act (HPA), when must a lender automatically cancel Private Mortgage Insurance (PMI) on a conventional loan?
Answer: When the LTV reaches 78% based on original amortization schedule at original value
The HPA requires automatic PMI cancellation when the loan balance reaches 78% of the original property value based on the original amortization schedule.
Which agency enforces the Fair Housing Act's prohibition on discriminatory mortgage lending practices?
Answer: HUD and DOJ
The Department of Housing and Urban Development (HUD) and the Department of Justice (DOJ) are the primary enforcers of the Fair Housing Act.
What is the primary purpose of the NMLS Unique Identifier assigned to each mortgage loan originator?
Answer: To provide a single identifier that follows the MLO across states and employers, enabling consumer lookup
The NMLS Unique Identifier allows consumers to look up an MLO's license status and disciplinary history, and follows the MLO regardless of state or employer changes.