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 Truth in Lending Act, the right of rescission for a refinance on a primary residence expires at midnight on which day?
Answer: The third business day after consummation, delivery of rescission notice, or delivery of material disclosures — whichever is latest
The rescission period under Regulation Z expires at midnight of the third business day after the latest of: consummation, delivery of rescission notice, or delivery of required disclosures.
Which of the following loan types is exempt from RESPA requirements?
Answer: Temporary construction loan not secured by a completed dwelling
Temporary construction loans are explicitly exempt from RESPA requirements because they are not secured by a completed dwelling intended as the borrower's residence.
A mortgage company's compliance officer discovers a pattern of loan officers steering Hispanic borrowers to higher-cost subprime loans while offering white borrowers with similar profiles prime loans. This is an example of:
Answer: Disparate treatment
Intentionally treating borrowers differently based on a protected class characteristic (national origin/race) constitutes disparate treatment, the most direct form of illegal discrimination.
Under Dodd-Frank, what is the general loan-to-value limit for a Qualified Mortgage to avoid the higher-priced mortgage points-and-fees test?
Answer: Points and fees must not exceed 3% of the total loan amount for loans of $100,000 or more
For a loan to qualify as a Qualified Mortgage, points and fees generally cannot exceed 3% of the total loan amount for loans of $100,000 or more.
What action must a federally chartered bank take if a state passes a law that conflicts with a national bank's ability to make mortgage loans?
Answer: The bank may invoke federal preemption if the OCC has determined the state law is preempted
National banks may invoke federal preemption under the National Bank Act when state laws conflict with their federally authorized lending activities, subject to OCC determinations.
Under the SAFE Act, continuing education requirements for licensed MLOs include how many hours annually?
Answer: 8 hours
The SAFE Act requires licensed MLOs to complete at least 8 hours of approved continuing education annually to maintain their license.
When a mortgage servicer receives a Qualified Written Request (QWR) from a borrower under RESPA, what is the maximum time to respond with substantive information?
Answer: 30 business days
Under RESPA, a servicer must provide a substantive response to a QWR within 30 business days of receipt, though it must acknowledge receipt within 5 business days.