Compliance and Oversight Flashcards
7 cards from real NMLS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Compliance and Oversight flashcards as text
Which of the following is a prohibited practice under the Real Estate Settlement Procedures Act (RESPA) Section 8?
Answer: Paying a referral fee to a real estate agent for sending mortgage business
RESPA Section 8 prohibits paying or receiving referral fees, kickbacks, or anything of value in exchange for referring settlement service business.
Under the Military Lending Act (MLA), what is the maximum Military Annual Percentage Rate (MAPR) that can be charged to active-duty servicemembers on covered consumer loans?
Answer: 36%
The Military Lending Act caps the Military Annual Percentage Rate at 36% for covered loans made to active-duty servicemembers and their dependents.
What is the purpose of a 'lookback period' in HMDA compliance?
Answer: The prior calendar year used to determine whether an institution meets the coverage thresholds requiring HMDA reporting
The HMDA lookback period refers to the prior calendar year's origination volume used to determine whether an institution meets the thresholds requiring HMDA data collection and reporting.
An MLO fails to renew their NMLS license by December 31st but submits a renewal application in January. Under which status may they continue operating until the renewal is approved?
Answer: Grace period active status under state law if the state permits late renewal
Many states permit a grace period for late renewal during which the MLO may continue operating, but this varies by state law and the MLO must have submitted a timely renewal application.
Under Regulation B (ECOA), within how many days must a creditor notify an applicant of adverse action on a completed credit application?
Answer: 30 days
Regulation B requires creditors to notify applicants of adverse action within 30 days of receiving a completed credit application.
Which of the following describes a 'higher-priced mortgage loan' (HPML) under Regulation Z?
Answer: A closed-end consumer credit transaction secured by a principal dwelling with an APR exceeding the APOR by at least 1.5 percentage points for first-lien loans
An HPML is a closed-end consumer loan secured by a primary dwelling where the APR exceeds the Average Prime Offer Rate (APOR) by at least 1.5 percentage points for first-lien loans.
A compliance audit reveals that a mortgage company has been charging a document preparation fee not disclosed on the Loan Estimate. What is the most likely regulatory consequence under TRID?
Answer: The lender may be required to cure the tolerance violation by refunding the excess amount to borrowers within three years
Under TRID, undisclosed fees that exceed tolerance thresholds must be cured by the lender, typically by refunding the excess amount to the borrower within three years of consummation.