NMLS Practice Test Questions and Answers 2024, Exams of Law

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NMLS Practice Test Questions and

Answers 2024

1. Seller can Sell property at a premium/profit with Fannie Mae financing after? 30 days •60 days •90 days ✔ •90 days
2. A COFI index is defined as? Cost of funds index •Cost of financial index •Cost of funding insurance ✔ cost of fund index
3. Subordinate financing relates to •seller financing. •second mortgages. •financing in the secondary mortgage market. •subprime loans. ✔ second mortgage
4. Explain what Investors with non-recourse loans mean? •Borrower does not have any recourse on default •Borrower doesn't occupy the property •Borrower has 20% equity ✔ Borrower does not have any recourse on default
5. Which of the following is true of the COFI? It stands for the Cost of Future Interest. •It is the preferred index if interest rates are expected to fall. •It is only used in the 11th Federal Home Loan Bank District. •It is the slow-moving Cost of Funds Index. ✔ It is the slow moving cost of funds index
6. Who is in charge of discrimination complaints? •Federal housing authority •Lender •ECOA

•Loan Officer ✔ Federal housing authority

7. The advantage of a home equity loan over refinancing is •lower interest rate. •less likelihood of default. •tax deductibility. •the ability to pay off part of the total debt separately. ✔ the ability to pay off part of the total debt separately
8. When a telemarketer calls a person on the do not call list in violation of the do not call regulations, he is subject to a fine of $5,000. •$7,500. •$12,000. •$16, ✔ 16,
9. An escrow account is set up to assure the borrower's loan payments are made promptly. •is intended to ensure timely payment of taxes and other charges related to the property. •does not necessitate sending out any statements to the borrower. •protects the borrower in the event he is unable to make his tax payments. ✔ •is intended to ensure timely payment of taxes and other charges related to the property.
10. Hal has an adjustable rate loan with a payment cap that allows him to pay less than the amount needed to pay all of the interest being charged on the loan. The term to describe this is •partial amortization. •negative amortization. •full amortization. •interest only. ✔ negative amortization
11. Government agency that regulates RESPA? •ECOA •HUD •FBI ✔ HUD

13. The last portion of the 1003 contains government monitoring data on? Sex and race of applicant •Sex, marital status, and race of applicant •Race, ethnicity, and gender ✔ •Race, ethnicity, and gender
14. Which of the following charges have no tolerance restriction? Transfer taxes The lender's or mortgage broker's origination charge While the borrower's interest rate is locked, the credit or charge for the interest rate chosen Settlement services selected by a borrower who shopped for his own service provider ✔ Transfer Taxes
15. Inclusion of the premium for single-premium credit life insurance in the principal loan amount without the borrower's informed consent is one example of flipping. packing. stripping. padding. ✔ Packing
16. A loan that has payments that do not tack down principal is? Interest only Pay option arm Neg Am Fully amortizing loan ✔ Interest only
17. The cost of an appraisal, paid outside of closing, would appear on the HUD- settlement as VOD. POC. HUD. VOE. ✔ POC
18. The Truth in Lending Act is most closely related to Respa

Ecoa HMDA HOEPA ✔ RESPA

6. RESPA requires that a borrower be given which document at closing? Final GFE Form 1003 Form 1004 HUD-1 Settlement Statement ✔ HUD-1 Settlement Statement
7. The main advantage of a federal VA loan for a borrower is required seller repairs. 0% down. low interest rate. significantly lower finance charges. ✔ 0% down.
8. PUD stands for planned unit development. programmed urban district. planned urban district. planned unit district. ✔ planned unit development.
9. The rules relating to the Federal Trade Commission's "no call" registry allow calls to persons on a "no call" list for up to 18 months after a business transaction has been completed with them. for up to three months after they have made an inquiry. Both A and B Neither A nor B ✔ Both A and B
10. A credit report will always display which of the following? Name and Social Security number Current account balances and payments for the past five years Bankruptcy filing at any time Personal assets ✔ Name and Social Security number

11. Without a waiver, an applicant for a conforming loan must be given a copy of an appraisal report at closing. within five days after closing. at least three business days prior to closing. None of the above, as he need not be given a copy of the appraisal report. ✔ at least three business days prior to closing.
12. Those who do not believe a loan originator should be responsible for determining that a loan is suitable for a borrower as that is the borrower's responsibility adhere to the concept of laissez faire. caveat emptor. fiduciary responsibility. material disclosure. ✔ caveat emptor.
13. Fannie Mae and Freddie Mac have what guidelines for investment property? 6 months piti in reserves 12 months piti in reserves 90% LTV DTI max of 55% ✔ 6 months piti in reserves
14. Which law governs residential mortgage loan closings? ECOA RESPA TILA HMDA ✔ TILA
15. The HMDA provides that financial institutions supervised by the Federal Reserve or FDIC may, at their option, report the type of loan. the location of the property. the owner-occupancy status. the reason a loan application was denied. ✔ the reason a loan application was denied