NMLS Compliance and Oversight 3

Question 1

Under the Equal Credit Opportunity Act (ECOA), how long must a creditor retain records of adverse action notices?

Accepted Answer

25 months

Answer

ECOA requires creditors to retain records of adverse action notices and the credit application for 25 months after the action is taken.

Question 2

Which of the following is a key element of an effective Bank Secrecy Act (BSA) compliance program for a mortgage company?

Accepted Answer

Designating a compliance officer, establishing internal controls, and providing ongoing training

Answer

An effective BSA/AML compliance program must include a designated compliance officer, written internal controls, independent testing, and ongoing employee training.

Question 3

Under TRID, if a valid changed circumstance occurs, how many business days does a lender have to issue a revised Loan Estimate?

Accepted Answer

3 business days

Answer

When a valid changed circumstance occurs, the lender must provide a revised Loan Estimate within three business days of receiving information supporting the change.

Question 4

What is 'disparate impact' in the context of fair lending compliance?

Accepted Answer

A facially neutral policy that disproportionately affects a protected class without business justification

Answer

Disparate impact occurs when a facially neutral lending policy disproportionately harms a protected class and cannot be justified by legitimate business necessity.

Question 5

Under the Homeowners Protection Act (HPA), when must a lender automatically cancel Private Mortgage Insurance (PMI) on a conventional loan?

Accepted Answer

When the LTV reaches 78% based on original amortization schedule at original value

Answer

The HPA requires automatic PMI cancellation when the loan balance reaches 78% of the original property value based on the original amortization schedule.

(NMLS) National Mortgage Licensing System Practice Test

(NMLS) National Mortgage Licensing System Practice Test

NMLS Compliance and Oversight 3