Mortgage Loan Originator FREE NLMS refresher

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All the Regulations to Memorize for your NMLS Test

For fun I have listed here some more than one hundred questions and the correct answers for you to memorize for your NMLS Test. This is in case the droning voice recording on your online test made you fall asleep, or the teacher was on something. You must memorize the details the way NMLS is testing for nationally, it does not matter what you think or how you practice in your local market. It does not matter about common sense, burn the facts in your head. Mortgage now is run by Barney Frank who once had a boyfriend at Wells Fargo Home Mortgage, so he really knows how to properly regulate a complex business with certain laws that do not help consumers. So here it is, do not question the man behind the curtain, he is the great and powerful Oz. This does not guarantee you will pass. This is not necessarily  any exact list of the questions. This is a free study guide.


1.       Prior to closing how long does RESPA require you give the HUD1 to borrower if they ask?
One business day

2.       UNDER ECOA What may NOT be used adversely in Underwriting?
Borrower receives public assistance
Remember ECOA is REG B

3.       Who is not a depository institution?
Mortgage banker because they don’t lend their own dough or work for a bank or S&L

4.       What is difference between a mortgage banker and mortgage broker?
Mortgage broker is middleman intermediary, bankers do that but also raise stock to loan their own money

5.       According to Truth in Lending Act a borrower on a refinance who was not disclosed the APR can?
Rescind the loan for three years

6.       Lender who doesn’t sell loans to investors is:
Portfolio Lender

7.       Regulation forbids seller to steer to certain Title Company

8.       If the fed buys government securities the money supply:
9.       What law defines high cost loans or Section 32 loans?
HOEPA Home Ownership and Equity Protection Act

10.   Fannie or Freddie can force a lender to buy back /repurchase a loan if
Evidence of fraud
11.   What Federal legislation requires information about race?
Home Mortgage Disclosure Act HMDA

12.   A registered State Licensed MLO is identified in NLMS by
Unique identifier
13.   Common name of Title V?
14.   TIL does not require:
Name of entity who services but does
requires amount, finance charges, total payments…
15.   What is the fine for violating Do Not Call?
16.   State Licensed MLO lets license expire must retest if :
5 years have past
17.   Federal regulation regarding adverse collection information on credit report?
18.   Registered MLO hours education?
0 only State has 20
19.   MLO fails test 3rd time must wait:
180 days
20.   SAFE requires State Licensed x hours continuing education?
21.   RESPA requires what disclosure at closing?
22.   Fixed rate fully amortized loans each payment:
Interest portion decreases and principle increases
23.   HMDA does not include:
Land loans
24.   Refinance recission:
3 business days including Saturday not Sunday or Fed holidays
25.   Lender must notify Borrower of decision in:
30 days
26.   RESPA applies to all
Real estate credit 1-4 family dwellings
27.   APR must be disclosed on
28.   FCRA # days a credit information provider respond to dispute?
29.   Mortgage Disclosure Improvement Act fastest # days can close
7th business day after disclosures delivered
30.   What settlement charge may have 10% tolerance between GFE and closing?
Government recording charges
31.   Estimate for settlement charges on GFE is available for X days
32.   What fee may be charged before delivery TIL and GFE?
Credit report fee
33.   Mortgage broker rents discounted space from a Title Co for referrals violates:
34.   APR initial TIL 5.99% increases to 6.25% on final how long wait to close?
3 business days after redisclosure
35.   Higher priced loan is
APR is average prime offer rate + 1.5%
36.   GFE lumps together:
Lender and mortgage broker fees
37.   According to SAFE a MLO convicted of felony assault 10 years ago
Can apply
38.   MLO can be paid on:
Fixed percentage of loan amount
39.   Conventional loans are backed by the government?
Not guaranteed
40.   What kind of loan is assumable?
41.   Down payment for FHA with FICO 580+
3.5%   or 10% for score 500-579

42.   Seller contribution allowed FHA
6% of closing but not down payment
43.   FHA refinance amount UFMIP?
1% loan for both refi and purchase
44.   FHA housing ration and DTI?
31% / 43%
45.   FHA tax free income – disability/child support
Gross up  125%
46.    VA Housing Ratio and DTI
41% / 41%
47.   VA seller maximum buy down rate is
48.   VA funding fee for first time (not National Guard or reserve)
49.   Rural Housing Services RHS under
50.   PMI requires what down?
51.   Cancel PMI under:
Homeowners Protection Act
52.   Homeowners Protection Act requires lender to drop PMI at:
78% of original purchase price
53.   Jumbo loan is
Nonconforming loan
54.   Definition of nontraditional loan is under
55.   Mortgage second with predetermined maximum loan amount, adjustable, IO minimum, can be reborrowed is
56.   Borrower right to change from ARM to Fixed one time
Convertible loan
57.   Conforming loan
Follows Freddie and Fannie criteria
58.   Nontraditional mortgage highest risk in underwriting is
High debt to income ratio
59.   Difference between index and the rate charged is called
60.   Total payments payoff the entire balance at term is
Fully amortizing
61.   During reverse mortgage what decreases:
62.   Reverse mortgage must be repaid if unoccupied by owner for:
12 months
63.   HECM not available on:
No cooperatives
64.   HECM does not consider:
Credit of borrower
65.   Lender refuses to make loans in certain neighborhood
66.   RESPA kickback who pays fine
All parties who received
67.   TIL in Advertising
Think numbers like: 10% down
68.   Advertising
APR amount down terms repayment
69.   Discouraging minority application
70.   Not protected by Fair Housing Act
Sexual orientation
71.   ARM loans address
72.   Initial rate ARM 4% lower than fully indexed
73.   Recast ARM
Recomputed monthly payments to fully amortize
74.   5/2/6 ARM (6 is the
Payment cap
75.   Lowest teaser rate
Pay option ARM
76.   Option ARM accelerated payment is
Fully amortized over shorter loan term (15 or 20)
77.   Option ARM recast
Regular normal every 5 years
78.   Conversion right on ARM must requalify if:
Sold to secondary
79.   Graduated Payment mortgage is
Payments increase at regular intervals
80.   Graduated Payment Mortgages
Have neg am
81.   ARM’s
Have Home Equity Conversion Mortgage
82.   HECM is
Reverse Mortgage
83.   HECM
Cannot be second or subordinate loan
84.   Reverse Mortgage
Borrower must maintain, live in and pay taxes
85.   Land Contract
Vendor/seller transfers equitable title to vendee/ buyer
86.   Alienation clause is
Due on sale/ if sold payoff loan
87.   MLO can’t be a modification counselor advertisement under
Truth in Lending Act
88.   3 day rescission Regulation
Reg Z
89.   Flipping analyze past
3 years history of transfers
90.   Civil Rights 1866 prohibits discrimination on
91.   Repeated refinancing
Loan flipping
92.   Fed. Legislation requiring “equal housing lender”
Fair Housing Act
93.   Fair Housing Act does NOT cover
Disability (does cover religion, maritial, sex)
94.   Fed law covers redlining
Community Reinvestment Act
95.   Discount points are:
Paid to reduce rate
96.   Defeasance clause
Lender releases (defeated) when repaid
97.   Deficiency judgment
Lender recovers the losses
98.   Blanket mortgage
On one or more parcels
99.   Partially amortized loan
Has balloon
100.                        Higher rate charged in exchange for lower upfront costs
Yield spread premium

Stuff you must memorize because a couple questions use these assumptions:

Conventional Ratios: 28% / 36%
FHA                              31%/ 43%
VA                                       /41%
more questions and answers to the National Mortgage Registry Test

101.                        Market value
Most probable selling price
102.                        Minimum number comps required
103.                        Section 502 loans are
104.                        Chapter 7 BK shows on credit for
10 years
105.                        VA loan to value
106.                        UFMIP is on
107.                        Hypothecation
Using collateral without surrendering possession

SAFE 2008
RESPA=X=HUD=GFE=HUD-1, 1-4 family properties, kickbacks 1975
TILA=Z=FTC 1968 (Fed) 3 rescission, 3 day disclosure forms:TIL, booklet, CHARM, APR
ECOA=B=Federal Reserve =Discriminate sex age marriage race religion public assistance Cons. P.
HMDA= C =1975 gathers information about discrimination
GrammLeach GLB=P=FTC 1999 privacy
Nat Do not Call $16000 fine
FCRA= V=credit= FTC
HOEPA+ Z=Section 32+ FTC= high cost= rescind 3 years, APR TBill+8%/ 2nd +10%
USPAP –appraisal HUCC – AIR
Dodd Frank
HPA- PMI 1998 cancel 78% of original sales price or lender at 80%
MLO compensation rule = Z = Fed
CRA 1977 low mod loans
Civil Rights Act 1866 – no racial discrimination in buying selling homes
Fair Housing Act 1968
Fannie Freddie appraisal
Max gross adjustment to comp 25% Robin Hood
Max net 15% of sale price of comp

copyright Caroline Gerardo all this is mine even the photograph and we prosecute stealers. If you would like to print and study, that is fine. If you want to reproduce you will need to buy one of my books and have written (email) permission from me. Do not repost on Pinterest all rights reserved.

Cost Approach
Marshall Swift rebuild minus depreciation + land
Income Approach
Net operating income divided by Capitalization Rate= Value

If I think of more I'll post another homework list.

1 comment:

  1. Is Herb Moses still at WElls Fargo Home Mortgage?