NMLS Uniform State Content Questions and Answers

Question 1

A state mortgage regulatory authority has reason to believe a licensed MLO is consistently advertising misleading interest rates.
Which of the following actions is the state authority empowered to take to immediately stop this activity while an investigation is pending?

Accepted Answer

Issue a temporary cease and desist order.

Answer

Revoke the MLO's license without a hearing.

Answer

Sentence the MLO to 30 days in jail.

Answer

Order the MLO's sponsoring entity to pay restitution to all past clients.

Question 2

According to the model state law under the Uniform State Content, for what minimum period must a mortgage licensee maintain records of residential mortgage loan transactions after the date of the last material event?

Accepted Answer

For at least three years.

Answer

For the life of the loan.

Answer

For at least five years.

Answer

For at least one year.

Question 3

An MLO's business card and email signature include their name, title, and the NMLS ID of the company they work for. According to model state law based on the SAFE Act, what crucial piece of information is missing?

Accepted Answer

The MLO's personal NMLS ID number.

Answer

The main phone number of the state regulatory authority.

Answer

The phrase "Licensed by the [State] Department of Financial Institutions."

Answer

The website address of the NMLS.

Question 4

Which of the following actions by a mortgage loan originator is a prohibited practice under most state laws adopting the Uniform State Content?

Accepted Answer

Causing a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements.

Answer

Receiving compensation from both the borrower and the lender on the same transaction, provided it is fully disclosed.

Answer

Charging a reasonable, third-party fee for a credit report.

Answer

Collecting a rate lock fee from the borrower and immediately remitting it to the lending institution.

Question 5

Under the SAFE Act's model state law, what is the maximum civil penalty that a state regulatory authority can impose for EACH violation of the state's mortgage lending laws?

Accepted Answer

$25,000

Answer

$10,000

Answer

$50,000

Answer

$5,000

Question 6

Many states have adopted specific regulations to protect senior borrowers seeking reverse mortgages. What is a common requirement a borrower must fulfill before a lender can process a reverse mortgage application?

Accepted Answer

Obtain counseling from an independent, state-approved reverse mortgage counselor.

Answer

Provide a signed affidavit from a family member acknowledging the transaction.

Answer

Place a minimum of 10% of the loan proceeds into an escrow account for future taxes and insurance.

Answer

Pay for a second appraisal from an appraiser of their own choosing.