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The NMLS SAFE Mortgage Loan Originator Test (National Test with Uniform State Content) is one exam taken by candidates in every state. It has 120 multiple-choice questions, 115 of them scored and 5 unscored pretest questions, with 190 minutes allowed, and you need a score of 75% or better to pass. NMLS publishes the weight of each content area: federal mortgage-related laws 24%, Uniform State Content 11%, general mortgage knowledge 20%, mortgage loan origination activities 27% and ethics 18%. It is delivered by Prometric and the fee is $110. After a failed attempt you wait 30 days before retaking, and 180 days after every third failure. This bank covers every area in 15 modules, weighted to those percentages.
You need 75% or better. Revise each module to that level in Revision Mode, then run the full exam simulation in Exam Mode before your test date.
No. Since the Uniform State Content was folded into the national exam, one test covers it for candidates in every state. Your state may still set its own pre-licensing education, background and bonding requirements, which this site does not cover.
No. NMLS does not publish the live exam, and nothing here is recalled or copied from it. Every question is original, written to the official content outline and grounded in public-domain sources, including the SAFE Act and Regulations G and H, RESPA and Regulation X, TILA and Regulation Z, ECOA and Regulation B, the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act, the Bank Secrecy Act rules, the Fair Housing Act and the federal agency guidance the NMLS outline names, with the source cited in each explanation.
The full bank contains 594 questions with written, source-cited explanations, in 15 modules. The free sample gives you 8 questions per module, and each module has its own page with its free questions and answers.
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No. The practice tests run in your browser with no signup. Your score history is saved on your own device.
It is organized into 15 modules that follow the NMLS content outline: Federal — RESPA & Regulation X, Federal — ECOA & Regulation B, Federal — TILA, HOEPA & Higher-Priced Loans, Federal — TRID: Loan Estimate & Closing Disclosure, Federal — Privacy, Credit Reporting, AML & Other Federal Law, Uniform State — SAFE Act, NMLS & Licensing, Uniform State — Compliance, Prohibited Acts & Advertising, General — Qualified, Conventional & Government Programs, General — Loan Products & Mortgage Terms, Origination — Application, Disclosures & Tolerances, Origination — Qualification: Underwriting, Appraisal, Title & Insurance, Origination — Closing & Funding, Origination — Mortgage Math, Ethics — Prohibited Acts, Fraud & Advertising and Ethics — Conduct with Borrowers, Fees & Business Ethics. Each module is drilled and scored separately, so you can see exactly which areas are exam-ready and which still need work.
Last updated 23 September 2026. The bank is revised whenever the laws and guidance it cites change, and every question carries the source its explanation is drawn from.
Each module has its own page with its outline area, the sources it is written from and its free questions with answers.
A selection of free questions with answers and explanations. Use the interactive modules above for timed, scored drills.
A creditor wants to offer a fixed-rate QM with a prepayment penalty. What must it also offer?
Why: 12 CFR 1026.43(g)(3) requires an alternative without a prepayment penalty that has a rate that cannot increase and the same type of rate, the same loan term, QM payment and points-and-fees conditions, and for which the creditor has a good faith belief the consumer likely qualifies.
Source: 12 CFR 1026.43(g)(3)
A loan officer asks a married applicant whether the couple plan to have children soon. What does Regulation B say?
Why: 12 CFR 1002.5(d)(3) forbids inquiring about birth control practices, intentions concerning the bearing or rearing of children, or capability to bear children. The creditor may ask the number and ages of dependents and about dependent-related obligations, asked without regard to sex or marital status. Section 1002.6(b)(3) also bars assuming a category of persons will have reduced income because of childbearing.
Source: 12 CFR 1002.5(d)(3), 1002.6(b)(3)
Under the FTC Safeguards Rule, what is the first element of an information security program?
Why: 16 CFR 314.4(a) requires designating a Qualified Individual responsible for overseeing, implementing and enforcing the information security program; the individual may be employed by the institution, an affiliate or a service provider, but the institution keeps responsibility for compliance.
Source: 16 CFR 314.4(a)
For a first-lien small-creditor portfolio QM, how far above the APOR must the APR be before it is a higher-priced covered transaction?
Why: 12 CFR 1026.43(b)(4) uses "3.5 or more percentage points for a first-lien covered transaction that is a qualified mortgage under paragraph (e)(5), (e)(6), or (f)" and for subordinate liens, against 1.5 for other first liens.
Source: 12 CFR 1026.43(b)(4)
A mortgage ad quotes a monthly payment "that covers everything", though taxes and insurance must be paid separately. Under Regulation N, what is this?
Why: 12 CFR 1014.3(e) prohibits misrepresenting "The terms, amounts, payments, or other requirements relating to taxes or insurance ... including but not limited to misrepresentations about: (1) Whether separate payment of taxes or insurance is required".
Source: 12 CFR 1014.3(e)
Before a bank lets an unlicensed, registered employee act as a loan originator, which of these is it NOT required to obtain under Regulation Z?
Why: For employees not required to be licensed, 12 CFR 1026.36(f)(3)(i) requires a criminal background check through the NMLSR, a credit report, and NMLSR information on any administrative, civil or criminal findings. Pre-licensing education is a licensing requirement, not part of this screen.
Source: 12 CFR 1026.36(f)(3)(i)
Ana failed the SAFE MLO test for the first time on 4 March. What is the earliest she may retake it under federal minimum standards?
Why: Under 12 U.S.C. 5104(d)(3)(B) an individual may retake the test 3 consecutive times, with each taking at least 30 days after the preceding one. The 6-month wait in 5104(d)(3)(C) begins only after a third consecutive failure.
Source: 12 U.S.C. 5104(d)(3)(B)
Two co-owners each have the right to rescind a refinance with a new lender. Only one of them sends a rescission notice in time. What is the effect?
Why: 12 CFR 1026.23(a)(4): "When more than one consumer in a transaction has the right to rescind, the exercise of the right by one consumer shall be effective as to all consumers."
Source: 12 CFR 1026.23(a)(4)
A borrower will live in one unit of a building she is buying. Above how many units is credit to acquire an owner-occupied rental property deemed business purpose?
Why: Under 12 CFR 1026.3(a), Supplement I comment 3(a)-5.i: credit to acquire owner-occupied rental property "is deemed to be for business purposes if it contains more than 2 housing units". Credit to improve or maintain it is business purpose above 4 units (comment 3(a)-5.ii).
Source: 12 CFR 1026.3(a); Supplement I comment 3(a)-5
A 5/1 ARM has a 3% initial rate, a margin of 2.5% and a 2% limit on the first change. At the first adjustment the index is 2%. What is the new rate?
Why: CHARM explains that at the first adjustment the initial rate changes to the index plus the margin, subject to the limits on interest rate changes. 2% + 2.5% = 4.5%, which is within the 2-point first-change limit (3% + 2% = 5%), so the rate becomes 4.5%. CHARM uses the same figures in its teaser-rate example.
Source: CFPB Consumer Handbook on Adjustable-Rate Mortgages (CHARM), pp. 12-13
An escrow analysis for a borrower who is current shows a surplus of $85. What must the servicer do?
Why: Under 12 CFR 1024.17(f)(2)(i), if an escrow analysis shows a surplus of $50 or more the servicer must refund it to the borrower within 30 days from the date of the analysis; below $50 it may refund or credit it. The rule applies where the borrower is current, as this one is.
Source: 12 CFR 1024.17(f)(2)
Which of these charges on a home purchase loan is part of the finance charge? All fees are bona fide and reasonable.
Why: 12 CFR 1026.4(b)(3) lists "Points, loan fees, assumption fees, finder's fees, and similar charges" as finance charges. In a transaction secured by real property, 1026.4(c)(7) excludes bona fide and reasonable fees for title insurance, notary fees and pre-closing appraisal fees.
Source: 12 CFR 1026.4(b)(3), (c)(7)
A mortgage company pays its loan officers a higher commission on loans that close at higher interest rates. What does Regulation Z's loan originator rule say?
Why: 12 CFR 1026.36(d)(1)(i) bars paying a loan originator compensation based on a term of a transaction, or of multiple transactions, in a dwelling-secured consumer credit transaction. The interest rate is a term. Disclosure or consent does not cure it.
Source: 12 CFR 1026.36(d)(1)(i)
How does the SAFE Act define a "nontraditional mortgage product"?
Why: 12 U.S.C. 5102(7) is short and broad: a nontraditional mortgage product is any mortgage product other than a 30-year fixed rate mortgage. A 15-year fixed loan is therefore nontraditional for this purpose, which is why the education requirements give the nontraditional marketplace its own required hours.
Source: 12 U.S.C. 5102(7)
A consumer fills in all six application items on a lender's website, saves the form and logs off without pressing submit. Must the lender send a Loan Estimate?
Why: The CFPB TRID guide, section 6.10, explains that the obligation is triggered only when the six pieces are submitted for the purpose of obtaining credit; information is not deemed submitted just because it exists on the creditor's system (guide sections 6.6 and 6.10, applying 12 CFR 1026.2(a)(3)). Its example is exactly an online form completed and saved but not submitted.
Source: 12 CFR 1026.2(a)(3); CFPB TRID guide 6.10
A loan officer gives a consumer a written worksheet of estimated rate and costs before any Loan Estimate is issued. What must the worksheet carry?
Why: 12 CFR 1026.19(e)(2)(ii) requires a written, consumer-specific estimate given before the Loan Estimate to state clearly and conspicuously at the top of the front of the first page, in at least 12-point type: "Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan." It may not look substantially like the H-24 or H-25 forms.
Source: 12 CFR 1026.19(e)(2)(ii)
Last year an applicant used his legal right to dispute a billing error on a credit card issued by the same lender. The lender now turns down his mortgage application for that reason. What does ECOA say?
Why: 15 U.S.C. 1691(a)(3) makes it unlawful to discriminate against an applicant "because the applicant has in good faith exercised any right under this chapter", meaning the Consumer Credit Protection Act, which includes the billing error rights. The outcome of a good-faith dispute does not matter.
Source: 15 U.S.C. 1691(a)(3)
Which of these is treated as a refinancing under 12 CFR 1026.20(a), with new disclosures?
Why: 12 CFR 1026.20(a): a refinancing occurs when an existing obligation "is satisfied and replaced by a new obligation undertaken by the same consumer". Not treated as refinancings: "(1) A renewal of a single payment obligation with no change in the original terms. (2) A reduction in the annual percentage rate with a corresponding change in the payment schedule. (3) An agreement involving a court proceeding."
Source: 12 CFR 1026.20(a)
How many paper copies of the notice of the right to rescind must the creditor give each consumer entitled to rescind?
Why: 12 CFR 1026.23(b)(1): the creditor "shall deliver two copies of the notice of the right to rescind to each consumer entitled to rescind (one copy to each if the notice is delivered in electronic form" under the E-Sign Act).
Source: 12 CFR 1026.23(b)(1)
Which of these transactions does NOT receive a Loan Estimate under Regulation Z's integrated disclosure rules?
Why: 12 CFR 1026.19(e)(1)(i) requires the Loan Estimate in a closed-end consumer credit transaction secured by real property or a cooperative unit, other than a reverse mortgage subject to 1026.33. A home equity line of credit is open-end credit, which has its own disclosures under 1026.40.
Source: 12 CFR 1026.19(e)(1)(i)
How long is the seasoning period for a seasoned qualified mortgage, in the ordinary case?
Why: 12 CFR 1026.43(e)(7)(iv)(C): the seasoning period "means a period of 36 months beginning on the date on which the first periodic payment is due after consummation", extended while a 30-day delinquency is outstanding at the 36th month and excluding certain disaster or emergency accommodations.
Source: 12 CFR 1026.43(e)(7)(iv)
A borrower has stopped paying the mortgage on her principal residence. Under Regulation X, when is the earliest the servicer may make the first notice or filing to start foreclosure, absent a due-on-sale breach or another lienholder's action?
Why: 12 CFR 1024.41(f)(1) bars the first notice or filing for any judicial or non-judicial foreclosure unless the loan obligation is more than 120 days delinquent, the foreclosure rests on a due-on-sale violation, or the servicer is joining another lienholder's action. The 36th day is the deadline for live contact under 1024.39(a), not a foreclosure date.
Source: 12 CFR 1024.41(f)(1)
A loan officer is paid 1 percent of the loan amount on every loan she closes. How does the loan originator compensation rule treat this?
Why: Under 12 CFR 1026.36(d)(1)(ii) "the amount of credit extended is not a term of a transaction or a proxy for a term of a transaction", so compensation expressed as a fixed percentage of the loan amount is permitted. What is prohibited is pay tied to rate, fees or other terms, or to a proxy for them.
Source: 12 CFR 1026.36(d)(1)(ii)
To use the anti-steering safe harbor, which loan options must a broker present for each type of transaction the consumer is interested in?
Why: 12 CFR 1026.36(e)(3)(i) requires options from a significant number of the creditors the originator regularly uses, including the loan with the lowest interest rate; the lowest rate without negative amortization, a prepayment penalty, interest-only payments, a balloon payment in the first 7 years, a demand feature, shared equity or shared appreciation; and the lowest total dollar amount of discount points, origination points or fees.
Source: 12 CFR 1026.36(e)(3)
A lender's standard home equity line of credit agreement requires all disputes to go to binding arbitration. Is the clause permitted?
Why: 12 CFR 1026.36(h)(1): a contract for a consumer credit transaction secured by a dwelling, "including a home equity line of credit secured by the consumer's principal dwelling", may not include terms that require arbitration or any other non-judicial procedure.
Source: 12 CFR 1026.36(h)(1)
May the VA funding fee be financed in the loan?
Why: 38 U.S.C. 3729(a)(2): "The fee may be included in the loan and paid from the proceeds thereof."
Source: 38 U.S.C. 3729(a)(2)
When must a Loan Estimate include a Liability after Foreclosure statement?
Why: 12 CFR 1026.37(m)(7) and comment 37(m)(7)-1: the statement is required whenever the purpose is a refinance under 1026.37(a)(9)(ii), and may not appear otherwise. It warns that certain State law protections against deficiency liability may be lost and that the consumer should consult an attorney.
Source: 12 CFR 1026.37(m)(7); Supplement I comment 37(m)(7)-1
Whom does Regulation B's discouragement rule protect?
Why: Amended 12 CFR 1002.4(b) covers statements "directed at applicants or prospective applicants". The official interpretation notes that although most of the regulation protects people who have applied for or received credit, this paragraph reaches prospective applicants, in keeping with the purpose of the Act (FR Doc. 2026-07804, Supplement I, comment 4(b)-1).
Source: 12 CFR 1002.4(b), as amended by FR Doc. 2026-07804
A first-lien loan within the Freddie Mac loan limit, secured by the principal dwelling, has an APR 1.7 percentage points above the APOR. How is it classified under Regulation Z?
Why: 12 CFR 1026.35(a)(1)(i) makes a closed-end first-lien loan on the principal dwelling, at or under the Freddie Mac limit, a higher-priced mortgage loan when its APR exceeds the APOR by 1.5 or more percentage points. The 2.5 figure applies to jumbo first liens and 3.5 to subordinate liens. HOEPA's first-lien trigger is more than 6.5.
Source: 12 CFR 1026.35(a)(1)
Under the ability-to-repay rule, which of these may a creditor NOT count as the consumer's income or assets?
Why: 12 CFR 1026.43(c)(2)(i) requires the creditor to consider "The consumer's current or reasonably expected income or assets, other than the value of the dwelling, including any real property attached to the dwelling, that secures the loan".
Source: 12 CFR 1026.43(c)(2)(i)
A loan is guaranteed by a state housing agency. How is the Loan Type shown on the Loan Estimate?
Why: 12 CFR 1026.37(a)(11)(iv): for federally insured or guaranteed loans other than FHA and VA, "and for loans insured or guaranteed by a State agency, the creditor shall disclose the loan type as 'Other', and provide a brief description".
Source: 12 CFR 1026.37(a)(11)
A creditor denies an application two days after receiving it. Must it still send the special information booklet?
Why: Under 12 CFR 1026.19(g)(1)(i), "if the creditor denies the consumer's application before the end of the three-business-day period, the creditor need not provide the booklet".
Source: 12 CFR 1026.19(g)(1)(i)
An originator's NMLS license application asks about past civil judgments. He carelessly answers "no", forgetting a judgment entered against him three years ago. How does the Model State Law treat the answer?
Why: MSL XX.XXX.170(10) prohibits negligently making any false statement, or knowingly and willfully making any omission of material fact, in information or reports filed with a governmental agency or the NMLS. Negligence is enough for a false statement. Separately, MSL XX.XXX.130(1)(b) lets the commissioner deny a license for a material misstatement in an application.
Source: Model State Law MSL XX.XXX.170(10), .130(1)(b)
A loan is not higher-priced when the application arrives, but a rate change on Monday makes it a non-exempt higher-priced mortgage loan. By when must the creditor send the HPML appraisal disclosure?
Why: 12 CFR 1026.35(c)(5)(ii): for a loan that becomes a higher-priced mortgage loan subject to (c) after application, "the disclosure shall be delivered or placed in the mail not later than the third business day after the creditor determines that the loan is a higher-priced mortgage loan".
Source: 12 CFR 1026.35(c)(5)(ii)
May a creditor ask about an applicant's permanent residency and immigration status under Regulation B?
Why: 12 CFR 1002.5(e) permits a creditor to inquire about the permanent residency and immigration status of an applicant or any other person in connection with a credit transaction, and 1002.6(b)(7) lets it consider that status and information needed to ascertain its rights and remedies regarding repayment. National origin, by contrast, remains a prohibited basis.
Source: 12 CFR 1002.5(e), 1002.6(b)(7)
Which of these may a creditor use to cure a zero-tolerance violation, according to the CFPB's TRID guide?
Why: The CFPB TRID guide, section 7.14, citing comment 19(f)(2)(v)-1, says the refund need not be cash: a cure may be a refund to the consumer, a principal reduction, or specific or general lender credits, with a corrected Closing Disclosure within 60 calendar days after consummation (12 CFR 1026.19(f)(2)(v)).
Source: 12 CFR 1026.19(f)(2)(v); CFPB TRID guide 7.14
What must a creditor verify with third-party records before a loan can be a general qualified mortgage?
Why: 12 CFR 1026.43(e)(2)(v)(B) requires the creditor to verify income or assets (other than the dwelling) under (c)(4) and "the consumer's current debt obligations, alimony, and child support using reasonably reliable third-party records" under (c)(3).
Source: 12 CFR 1026.43(e)(2)(v)
Under the FTC's Red Flags Rule, what must a creditor with covered accounts develop and implement?
Why: 16 CFR 681.1(d)(1) requires each financial institution or creditor offering or maintaining covered accounts to develop and implement a written Identity Theft Prevention Program designed to detect, prevent and mitigate identity theft in connection with opening or maintaining covered accounts, appropriate to its size and complexity.
Source: 16 CFR 681.1(d)(1)
Which of these is one of the eight factors a creditor must consider under the ability-to-repay rule?
Why: 12 CFR 1026.43(c)(2) lists income or assets, employment status, the payment on the loan, simultaneous loans, mortgage-related obligations, "(vi) The consumer's current debt obligations, alimony, and child support", the DTI ratio or residual income, and credit history.
Source: 12 CFR 1026.43(c)(2)
An ARM uses an index that currently stands at 2.75% and a margin of 2.25%. What is the fully indexed rate?
Why: The CFPB's Consumer Handbook on Adjustable-Rate Mortgages (CHARM) states "Interest rate = index + margin": the margin is an extra percentage the lender adds to the index. 2.75% + 2.25% = 5%.
Source: CFPB Consumer Handbook on Adjustable-Rate Mortgages (CHARM), p. 4
A borrower asks to see the Closing Disclosure the day before closing, while a few figures are still being finalised. What must the creditor allow?
Why: 12 CFR 1026.19(f)(2)(i) requires the creditor to permit the consumer to inspect the disclosures, completed to set forth the items then known, during the business day immediately preceding consummation. Items relating only to the seller's transaction may be omitted.
Source: 12 CFR 1026.19(f)(2)(i)
Which of these figures does NOT appear in the Loan Calculations table of the Closing Disclosure?
Why: 12 CFR 1026.38(o) lists the Loan Calculations table: Total of Payments, Finance Charge, Amount Financed, Annual Percentage Rate and Total Interest Percentage. Cash to Close appears in the Calculating Cash to Close table (1026.38(i)) and on page 1.
Source: 12 CFR 1026.38(o)
What criminal penalty does RESPA set for giving or accepting a kickback for a settlement service referral?
Why: 12 U.S.C. 2607(d)(1): "Any person or persons who violate the provisions of this section shall be fined not more than $10,000 or imprisoned for not more than one year, or both."
Source: 12 U.S.C. 2607(d)(1)
A married applicant qualifies alone for a mortgage on a home she owns with her husband. State law requires his signature on the mortgage to create a valid lien. What may the lender require?
Why: 12 CFR 1002.7(d)(1) bars requiring a spouse's signature on a credit instrument where the applicant qualifies alone, but (d)(4) allows, for secured credit, the spouse's signature "on any instrument necessary ... under applicable state law to make the property being offered as security available", for example to create a valid lien. Comment 7(d)(4)-1: the creditor may not require the spouse to sign the note where signing the mortgage is enough.
Source: 12 CFR 1002.7(d)(1), (d)(4); Supplement I comment 7(d)(4)-1
A rescindable home equity loan closes on a Friday and the borrower receives the notice and all material disclosures that day. There are no holidays. When does the rescission period end?
Why: For rescission, 12 CFR 1026.2(a)(6) defines business days as all calendar days except Sundays and federal legal public holidays, so Saturday counts. Under 1026.23(a)(3)(i) the period ends at midnight of the third business day after the last of consummation, notice and disclosures: Saturday, Monday and Tuesday.
Source: 12 CFR 1026.2(a)(6), 1026.23(a)(3)(i)
For how long must a creditor keep records of the compensation it paid to a loan originator, and the compensation agreement behind them, under Regulation Z?
Why: 12 CFR 1026.25(c)(2)(i) requires a creditor to maintain records sufficient to evidence all compensation it pays to a loan originator, and the governing compensation agreement, for three years after the date of payment. A loan originator organization has the matching duty for compensation it receives and pays (1026.25(c)(2)(ii)). Two years is Regulation Z's general rule in 1026.25(a), which this paragraph overrides.
Source: 12 CFR 1026.25(c)(2)
A lender wants to sell customers' nonpublic personal information to an unaffiliated marketing firm. Under Regulation P, what must happen first?
Why: 12 CFR 1016.10(a)(1) bars disclosing nonpublic personal information to a nonaffiliated third party unless the institution has given the initial notice and an opt-out notice, given a reasonable opportunity to opt out before disclosure, and the consumer has not opted out. It is an opt-out regime, not opt-in consent.
Source: 12 CFR 1016.10(a)(1)
When is the annual renewal period for a registered mortgage loan originator under Regulation G?
Why: Regulation G defines the annual renewal period as November 1 through December 31 of each year (12 CFR 1007.102), and 1007.103(b)(1)(i) requires the registrant to renew during it. A registration completed less than 6 months before the end of that period need not be renewed that year (1007.103(b)(3)).
Source: 12 CFR 1007.102, 1007.103(b)
A lender adds a $300 "document review fee" to the closing costs, shares it with a second company, and neither performs any review. How does Regulation X treat the charge?
Why: 12 CFR 1024.14(c) bars giving or accepting any portion, split or percentage of a charge for a settlement service other than for services actually performed, and says a charge for which no or nominal services are performed is an unearned fee. The borrower's agreement to pay does not change what was done for the money.
Source: 12 CFR 1024.14(c)
In 2026, a consumer borrows $90,000 secured by her home. Does Regulation Z's exemption for credit above the annual threshold apply?
Why: 12 CFR 1026.3(b)(1)(i) exempts credit above the annual threshold ($73,400 for 2026, FR Doc. 2025-22814) "unless the extension of credit is: (A) Secured by any real property, or by personal property used or expected to be used as the principal dwelling of the consumer".
Source: 12 CFR 1026.3(b); FR Doc. 2025-22814
A borrower knowingly overstates his income on an application to a mortgage lending business to get a larger loan. What is the maximum federal penalty under 18 U.S.C. 1014?
Why: 18 U.S.C. 1014 covers whoever knowingly makes any false statement to influence, among others, "a mortgage lending business" or an FDIC-insured institution on any application or loan, and provides that the person "shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both."
Source: 18 U.S.C. 1014
How must a consumer exercise the right to rescind, and when is the notice treated as given?
Why: 12 CFR 1026.23(a)(2) requires the consumer to notify the creditor by mail, telegram or other written means. Notice is considered given when mailed, when filed for telegraphic transmission or, if sent by other means, when delivered to the creditor's designated place of business.
Source: 12 CFR 1026.23(a)(2)
Under the anti-steering safe harbour, what belief must the originator hold about the loan options he presents?
Why: 12 CFR 1026.36(e)(3)(ii): "The loan originator must have a good faith belief that the options presented to the consumer pursuant to paragraph (e)(3)(i) of this section are loans for which the consumer likely qualifies."
Source: 12 CFR 1026.36(e)(3)(ii)
A creditor uses an empirically derived, statistically sound credit scoring system that includes age as a variable. What limit does Regulation B place on how age is used?
Why: 12 CFR 1002.6(b)(2)(ii) permits such a system to use age as a predictive variable "provided that the age of an elderly applicant is not assigned a negative factor or value", mirroring 15 U.S.C. 1691(b)(3). Any system may use an elderly applicant's age to favor the applicant (1002.6(b)(2)(iv)).
Source: 12 CFR 1002.6(b)(2)(ii); 15 U.S.C. 1691(b)(3)
Under the SAFE Act's definition, which combination of activities makes an individual a loan originator?
Why: 12 U.S.C. 5102(4)(A)(i) defines a loan originator as an individual who takes a residential mortgage loan application AND offers or negotiates terms of a residential mortgage loan for compensation or gain. Both limbs are needed under the federal Act. Negotiating the price of the house is real estate brokerage activity, which 5102(4)(D) treats separately.
Source: 12 U.S.C. 5102(4)(A)
Which of these is one of the purposes of HMDA data as Regulation C states them?
Why: 12 CFR 1003.1(b)(1) says HMDA is intended to provide public loan data to help determine whether institutions are serving their communities' housing needs, to help public officials target public investment, and "to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes". 1003.1(b)(2) adds that it is not intended to encourage unsound lending or the allocation of credit.
Source: 12 CFR 1003.1(b)
In 2026, a first-lien loan of $300,000 has an APR of 8.80%. The average prime offer rate for a comparable transaction is 6.50%. Can it be a general QM under the price test?
Why: Under 12 CFR 1026.43(e)(2)(vi) and comment 43(e)(2)(vi) as updated for 2026 by FR Doc. 2025-22773, for a first-lien loan of $137,958 or more the APR may not exceed APOR "by ... 2.25 or more percentage points". 8.80% - 6.50% = 2.30.
Source: 12 CFR 1026.43(e)(2)(vi); FR Doc. 2025-22773
For an escrow account required as a condition of the loan, when must the servicer give the borrower the initial escrow account statement?
Why: 12 CFR 1024.17(g)(1) requires the servicer to submit an initial escrow account statement at settlement or within 45 calendar days of settlement for escrow accounts established as a condition of the loan. It shows the monthly payment, the escrow portion and the itemized taxes, insurance and other charges anticipated.
Source: 12 CFR 1024.17(g)(1)
A borrower pays a mortgage broker company's fee directly at closing. The creditor also offers to pay the broker company for the same loan. What does the CFPB's loan originator rule say?
Why: Regulation Z's dual compensation rule, 12 CFR 1026.36(d)(2)(i)(A), provides that if a loan originator receives compensation directly from the consumer, no loan originator may receive compensation from anyone other than the consumer in connection with the transaction, and no one who knows of the consumer-paid compensation may pay any. Disclosure and consent do not cure it. The company may still pay its own individual originator (1026.36(d)(2)(i)(C)).
Source: 12 CFR 1026.36(d)(2)(i)
What must the HELOC application disclosures say about the risk to the consumer's home?
Why: 12 CFR 1026.40(d)(3) requires "A statement that the creditor will acquire a security interest in the consumer's dwelling and that loss of the dwelling may occur in the event of default."
Source: 12 CFR 1026.40(d)(3)
A creditor requires HUD-approved counseling before making a negative amortization loan to a first-time borrower. May it tell the borrower which counselor to use?
Why: 12 CFR 1026.36(k)(3): a creditor making such a loan to a first-time borrower "shall not steer or otherwise direct a consumer to choose a particular counselor or counseling organization" for the required counseling.
Source: 12 CFR 1026.36(k)(3)
How may a consumer indicate an intent to proceed after receiving the Loan Estimate?
Why: 12 CFR 1026.19(e)(2)(i)(A) lets the consumer indicate an intent to proceed "in any manner the consumer chooses, unless a particular manner of communication is required by the creditor", and requires the creditor to document the communication under 1026.25.
Source: 12 CFR 1026.19(e)(2)(i)(A)
An originator offers an appraiser a bonus on future orders if the appraisal "comes in at the contract price". Which prohibited act in the Model State Law does this fall under?
Why: MSL XX.XXX.170(11) prohibits making any payment, threat or promise, directly or indirectly, to any appraiser of a property for the purpose of influencing the appraiser's independent judgment as to value. A promise of future orders tied to the value is exactly that. Regulation Z's valuation independence rule, 12 CFR 1026.42, prohibits the same conduct at federal level.
Source: Model State Law MSL XX.XXX.170(11)
Under the FTC Safeguards Rule, what must the information security programme of a mortgage lender holding data on 20,000 consumers be based on?
Why: 16 CFR 314.4(b) requires the programme to be based on a risk assessment that identifies reasonably foreseeable internal and external risks to customer information, and (b)(1) says "The risk assessment shall be written". 16 CFR 314.6 exempts institutions holding information on fewer than 5,000 consumers from (b)(1).
Source: 16 CFR 314.4(b), 314.6
An applicant lists $1,200 a month of income on a mortgage application. When may the creditor ask whether any of it is alimony or child support?
Why: 12 CFR 1002.5(d)(2) bars asking whether stated income comes from alimony, child support or separate maintenance unless the creditor discloses that such income need not be revealed if the applicant does not want it considered. If the applicant relies on it, 1002.6(b)(5) requires it to be counted to the extent it is likely to be consistently made.
Source: 12 CFR 1002.5(d)(2)
What score must a candidate achieve to pass the qualified written test required by the SAFE Act?
Why: 12 U.S.C. 5104(d)(3)(A): an individual has not passed the qualified written test unless the score is not less than 75 percent correct answers. Regulation H states the same figure at 12 CFR 1008.105(e)(1).
Source: 12 U.S.C. 5104(d)(3)(A); 12 CFR 1008.105(e)(1)
A construction loan is paid out in several advances. The correct APR is 7.000% and 7.200% is disclosed. Is the APR accurate?
Why: 12 CFR 1026.22(a)(3) treats the APR in an irregular transaction as accurate within 1/4 of one percentage point, and defines irregular transactions to include those with multiple advances. 7.200% is 0.2 above, within 0.25.
Source: 12 CFR 1026.22(a)(3)
Which of these must the notice of special flood hazards to a borrower include?
Why: 12 CFR 339.9(b)(6) requires "A statement whether Federal disaster relief assistance may be available in the event of damage to the building or mobile home caused by flooding in a Federally declared disaster." Under (b)(4) the notice also says private policies may be available. 42 U.S.C. 4104a(a) sets the notice duty.
Source: 12 CFR 339.9(b); 42 U.S.C. 4104a(a)
A seller tells a buyer that the sale will go ahead only if the buyer buys title insurance from the seller's preferred title company. What is the seller's exposure under RESPA?
Why: 12 U.S.C. 2608 (section 9 of RESPA) bars a seller from requiring, as a condition of the sale, that the buyer purchase title insurance from any particular title company, and makes a seller who violates it liable to the buyer for three times all charges made for the title insurance.
Source: 12 U.S.C. 2608
A homeowner needs home equity funds at once for a genuine personal financial emergency. How can the right to rescind be waived?
Why: 12 CFR 1026.23(e) lets the consumer modify or waive the right if the credit is needed for a bona fide personal financial emergency, by a dated written statement describing the emergency, specifically modifying or waiving the right, and signed by all consumers entitled to rescind. "Printed forms for this purpose are prohibited."
Source: 12 CFR 1026.23(e)
Which of these details appears under Closing Information on page 1 of the Closing Disclosure?
Why: 12 CFR 1026.38(a)(3) lists the Closing Information: date issued, closing date, disbursement date, settlement agent, the settlement agent's file number, the property and the sale price or appraised value.
Source: 12 CFR 1026.38(a)(3)
According to the CFPB's ARM handbook, what is an ARM's interest rate generally never lower than?
Why: CHARM, describing the Minimum/Maximum Interest Rate row of the AIR table: "Generally, an ARM's interest rate is never lower than the margin." The sample table with a 2.5% margin shows a 2.5% minimum.
Source: CFPB Consumer Handbook on Adjustable-Rate Mortgages (CHARM), pp. 12-13
Which of these applicants must receive the special information booklet?
Why: 12 CFR 1026.19(g)(1) requires the booklet for consumers applying for credit secured by real property, and 1026.19(g)(1)(iii) exempts transactions whose purpose is not the purchase of a one-to-four family residential property, including refinancings, closed-end subordinate-lien loans and reverse mortgages. A duplex purchase is a one-to-four family purchase.
Source: 12 CFR 1026.19(g)(1)
Under the ability-to-repay rule, which of these is a "mortgage-related obligation"?
Why: 12 CFR 1026.43(b)(8): "Mortgage-related obligations mean property taxes; premiums and similar charges ... that are required by the creditor; fees and special assessments imposed by a condominium, cooperative, or homeowners association; ground rent; and leasehold payments." A car loan is a current debt obligation under (c)(2)(vi).
Source: 12 CFR 1026.43(b)(8)
How is the lender's title insurance charge labelled in the Loan Costs section of the Loan Estimate?
Why: 12 CFR 1026.37(f)(2)(i) and (f)(3)(i) require the introductory description "Title —" at the beginning of the label for any item that is a component of title insurance or is for conducting the closing. The parenthetical "(optional)" is used only in the Other section, for separate products such as an owner's title policy (1026.37(g)(4)(ii) and comment 37(g)(4)-1).
Source: 12 CFR 1026.37(f)(2)(i), (f)(3)(i), (g)(4)(ii)
A creditor never gave the borrower the required rescission notice on a loan secured by his principal dwelling. How long does the right to rescind last?
Why: 12 CFR 1026.23(a)(3)(i) provides that if the notice or material disclosures are not delivered, the right expires 3 years after consummation, upon transfer of all the consumer's interest in the property, or upon its sale, whichever occurs first.
Source: 12 CFR 1026.23(a)(3)(i)
A title agent pays a loan officer a $250 kickback on a transaction in which the borrower paid a $900 title fee. What damages does RESPA section 8(d)(2) allow the borrower, before costs and attorneys' fees?
Why: 12 U.S.C. 2607(d)(2) makes violators jointly and severally liable to the person charged for the settlement service "in an amount equal to three times the amount of any charge paid for such settlement service": 3 x $900 = $2,700.
Source: 12 U.S.C. 2607(d)(2)
While taking an application, an originator learns that the borrower owes $400 a month on a car loan that does not yet appear on the credit report. To keep the debt ratio under the limit, the originator leaves it off the application. What has the originator done?
Why: The Model State Law makes it a violation to employ any scheme, device or artifice to defraud or mislead borrowers or lenders (MSL XX.XXX.170(1)) and to make any false or deceptive statement or representation (170(9)). Knowingly omitting a debt to pass the lender's ratio misleads the lender, and the borrower's consent does not change that. False statements on a loan application can also be a federal crime (18 U.S.C. 1014).
Source: Model State Law MSL XX.XXX.170(1), (9); 18 U.S.C. 1014
A consumer lives full time in a mobile home that is not attached to any land. Is it a "dwelling" under Regulation Z?
Why: 12 CFR 1026.2(a)(19): a dwelling is "a residential structure that contains one to four units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence."
Source: 12 CFR 1026.2(a)(19)
Does the Fair Housing Act's ban on discrimination in residential real estate-related transactions reach appraisers?
Why: 42 U.S.C. 3605(b)(2) defines a residential real estate-related transaction to include "The selling, brokering, or appraising of residential real property." Section 3605(c) lets appraisers consider factors other than the protected characteristics.
Source: 42 U.S.C. 3605(b)-(c)