Mortgage Federal Mortgage-Related Laws 5 — Questions and Answers
Question 1: The SAFE Act requires mortgage loan originators (MLOs) to complete how many hours of pre-licensing education before being licensed?
- 8 hours
- 20 hours (Correct answer)
- 40 hours
- 30 hours
Correct answer: 20 hours
The SAFE Mortgage Licensing Act requires a minimum of 20 hours of NMLS-approved pre-licensing education for state-licensed MLOs.
Question 2: Under the Gramm-Leach-Bliley Act (GLBA), mortgage lenders must provide borrowers with a privacy notice:
- Only at the time of application
- At account opening and annually thereafter (Correct answer)
- Only when sharing information with third parties
- At closing only
Correct answer: At account opening and annually thereafter
GLBA requires financial institutions to provide a privacy notice at the time a customer relationship is established and annually thereafter.
Question 3: The Bank Secrecy Act (BSA) requires mortgage companies to file a Suspicious Activity Report (SAR) within how many days of detecting a suspicious transaction?
- 15 days
- 30 days
- 45 days (Correct answer)
- 60 days
Correct answer: 45 days
BSA regulations require covered institutions to file a SAR within 30 days of initial detection of a suspicious transaction, with a 60-day extension if no suspect is identified — the standard deadline is 30 days.
Question 4: Under the Fair Credit Reporting Act (FCRA), if a borrower disputes information in their credit report, the credit bureau must investigate and respond within how many days?
- 15 days
- 30 days (Correct answer)
- 45 days
- 60 days
Correct answer: 30 days
FCRA generally requires credit bureaus to complete investigations of disputed items within 30 days (extended to 45 days if the consumer provides additional information).
Question 5: The SAFE Act created the Nationwide Multistate Licensing System (NMLS) primarily to:
- Set maximum mortgage interest rates at the federal level
- Establish a uniform licensing and registration system for mortgage loan originators (Correct answer)
- Replace state mortgage licensing laws entirely with federal standards
- Create a centralized appraisal database for all residential properties
Correct answer: Establish a uniform licensing and registration system for mortgage loan originators
The SAFE Act mandated NMLS as a uniform, centralized registry for licensing and tracking mortgage loan originators across states.
Question 6: Under the FCRA, an adverse action notice based on a credit report must inform the applicant of their right to obtain a free copy of their credit report within how many days?
- 30 days
- 45 days
- 60 days (Correct answer)
- 90 days
Correct answer: 60 days
FCRA requires the adverse action notice to inform the consumer they can obtain a free copy of the credit report used within 60 days of the adverse action notice.
Question 7: Which federal law requires mortgage servicers to provide a borrower with a written response acknowledging receipt of a Qualified Written Request (QWR) within 5 business days?
- TILA
- FCRA
- RESPA (Correct answer)
- ECOA
Correct answer: RESPA
RESPA Section 6 requires servicers to acknowledge receipt of a Qualified Written Request within 5 business days and resolve it within 30 business days.
Mortgage Federal Mortgage-Related Laws 5
The SAFE Act requires mortgage loan originators (MLOs) to complete how many hours of pre-licensing education before being licensed?