NMLS Mortgage Loan Originator Exam Basics

1. Which federal law requires disclosure of loan terms and costs to borrowers?

Truth in Lending Act (TILA)

Fair Credit Reporting Act

Equal Credit Opportunity Act

Community Reinvestment Act

2. Which regulation requires lenders to provide borrowers with credit-related information?

Fair Credit Reporting Act

Real Estate Settlement Procedures Act

Community Reinvestment Act

Home Mortgage Disclosure Act

3. What is redlining in the context of mortgage lending?

Illegal practice of denying credit based on geographic location

Standard process of marking documents with red ink

Required step to calculate loan approval odds

Method to verify borrower identity

4. True or False: A loan officer is required to disclose all fees associated with a mortgage to the borrower.

True

False

5. Which of the following is NOT a type of mortgage loan?

Conventional loan

FHA loan

Adjustable equity loan

VA loan

6. What is the purpose of a property appraisal in the mortgage process?

Establish the property's market value for lending purposes

Determine the borrower's credit score

Calculate the borrower's monthly income

Verify the borrower's employment history

7. True or False: A loan officer can accept a gift from a borrower as a thank-you after closing.

True

False

8. Which document must be provided to borrowers within three business days of applying for a mortgage?

Loan Estimate

Appraisal Report

Title Insurance Policy

Hazard Insurance Quote

9. What does APR stand for in mortgage lending?

Annual Percentage Rate

Adjusted Principal Rate

Annual Payment Requirement

Amortized Percentage Return

10. What is the Dodd-Frank Act primarily designed to do?

Regulate financial institutions and protect consumers

Increase the number of mortgage lenders

Lower interest rates on all mortgages

Eliminate credit unions from the market

11. Which of the following describes an adjustable-rate mortgage (ARM)?

Interest rate changes periodically based on market conditions

Interest rate is locked for the entire loan term

Borrower can choose to adjust payments annually

Lender adjusts the principal amount each year

12. What is the primary purpose of the Equal Credit Opportunity Act?

Prevent discrimination in lending based on protected characteristics

Set maximum interest rates for mortgages

Require lenders to serve low-income areas

Establish minimum credit score requirements

13. What does NMLS stand for?

National Mortgage Licensing System

National Mortgage Legal Standards

National Mortgage Loan Service

Nationwide Mortgage Licensing Standard

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17. True or False: FHA loans require a minimum down payment of 20 percent.

True

False

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NMLS Mortgage Loan Originator Exam Basics Quiz

1. Which federal law requires disclosure of loan terms and costs to borrowers?

2.

What first name or nickname would you like us to use?

2. Which regulation requires lenders to provide borrowers with credit-related information?

3. What is redlining in the context of mortgage lending?

4. True or False: A loan officer is required to disclose all fees associated with a mortgage to the borrower.

5. Which of the following is NOT a type of mortgage loan?

6. What is the purpose of a property appraisal in the mortgage process?

7. True or False: A loan officer can accept a gift from a borrower as a thank-you after closing.

8. Which document must be provided to borrowers within three business days of applying for a mortgage?

9. What does APR stand for in mortgage lending?

10. What is the Dodd-Frank Act primarily designed to do?

11. Which of the following describes an adjustable-rate mortgage (ARM)?

12. What is the primary purpose of the Equal Credit Opportunity Act?

13. What does NMLS stand for?

14. A borrower's debt-to-income (DTI) ratio is calculated by dividing monthly debt payments by ____ income.

15. The loan-to-value (LTV) ratio compares the loan amount to the ____ of the property.

16. The Closing Disclosure must be provided to the borrower at least ____ business days before closing.

17. True or False: FHA loans require a minimum down payment of 20 percent.

18. The process of verifying a borrower's income, employment, and assets is called ____.

19. A fixed-rate mortgage has an interest rate that ____ for the entire loan term.

20. Points paid on a mortgage are typically equal to ____ percent of the loan amount.