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NMLS Practice Exam 05: Regulatory Disclosures & Loan Characteristics

NMLS Test 05: Essential Rules

This exam focuses on Consumer Notification, Fee Calculations, and Government Loan Features.

ECOA Notices: All adverse action notices must be delivered in writing. Verbal notification via telephone does not satisfy federal requirements.
APR Exclusions: Fees that are not directly related to the extension of credit, such as hazard insurance, are excluded from APR calculations.
Late Fees: Standard conventional loans typically allow for a 5 percent late fee, while FHA and VA loans are capped at 4 percent.
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Q:1Which of the following methods of disclosure does NOT meet the requirements of the Equal Credit Opportunity Act (ECOA)?
Q:2According to the Truth-in-Lending Act (TILA), the term "refinance" applies to:
Q:3If an applicant works 40 hours every week and is paid $13.52 per hour, what is the applicant's monthly income?
Q:4A buyer has made an earnest money payment of $5,000 and an additional $2,000 in option money on a property with a sale price of $160,000. If the required down payment is 20%, how much additional money is needed?
Q:5According to the Truth-in-Lending Act (TILA), which of the following fees is ... [Show Full Question 5]
Q:6Which of the following transactions is EXEMPT from the requirements ... [Show Full Question 6]
Q:7Under the Fair Credit Reporting Act (FCRA), which of the following entities has the burden of protecting ... [Show Full Question 7]
Q:8An annual escrow analysis is used ... [Show Full Question 8]
Q:9According to TILA, what is the required disclosure when an advertisement ... [Show Full Question 9]
Q:10Under the TRID rule, there is a 10% cumulative accuracy ... [Show Full Question 10]
Q:11For a conventional loan, a borrower can request cancellation of private mortgage insurance ... [Show Full Question 11]
Q:12Which form under the TRID rule provides a detailed summary of all loan terms and costs and must ... [Show Full Question 12]
Q:13Which rule forces loan originators to give a clear summary ... [Show Full Question 13]
Q:14What does a loan originator use to determine the estimated value of a property ... [Show Full Question 14]
Q:15Which of the following methods of disclosure does NOT meet the requirements ... [Show Full Question 15]
Q:16The term "20 basis points" expressed ... [Show Full Question 16]
Q:17According to the Truth-in-Lending Act (TILA), which of the following fees is ... [Show Full Question 17]
Q:18FHA loans are primarily distinct from conventional ... [Show Full Question 18]
Q:19The late fee for a conventional ... [Show Full Question 19]
Q:20A funding fee is ... [Show Full Question 20]

Test 05 Study Summary

1. Refinancing Logic Under TILA, a refinance occurs only when an existing debt is satisfied and replaced by a completely new legal obligation.
2. Escrow Analysis Lenders perform an annual escrow analysis to ensure the account has enough funds for taxes and insurance without maintaining an illegal overage.
3. TRID Tolerances A 10 percent cumulative tolerance applies to recording fees and third-party services where the lender allowed the consumer to shop from a list.

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