NMLS Mortgage Loan Exam Questions & Answers 2026 (21–30)

Question 1

The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to:

TheoryPractice · Accepted Answer

Provide privacy notices and protect the security of customers' nonpublic personal information. GLBA requires financial institutions to explain their information-sharing practices, give customers privacy notices, and safeguard nonpublic personal information under the Safeguards and Privacy Rules.

Question 2

A mortgage company calling consumers to solicit refinances must comply with the Telephone Consumer Protection Act and the:

TheoryPractice · Accepted Answer

National Do-Not-Call Registry rules. Telemarketing solicitations must respect the National Do-Not-Call Registry; calling a registered number without an exemption (such as an established business relationship) violates TCPA/Telemarketing rules.

Question 3

Regulation Z's loan originator compensation rule prohibits paying an MLO based on:

TheoryPractice · Accepted Answer

A term of the transaction such as the interest rate. To curb steering, Reg Z bars compensating an MLO based on a loan's terms or conditions (e.g., rate or points). Compensation may be based on loan amount or a fixed fee, but not on terms.

Question 4

Under Regulation Z, in a single transaction an MLO generally may NOT:

TheoryPractice · Accepted Answer

Receive compensation from both the consumer and another person (such as the creditor). The dual-compensation prohibition bars an MLO from being paid by the consumer and also by the creditor or any other party on the same transaction.

Question 5

The Ability-to-Repay (ATR) rule under the Dodd-Frank Act and Regulation Z requires a creditor to:

TheoryPractice · Accepted Answer

Make a reasonable, good-faith determination that the borrower can repay the loan. The ATR rule requires creditors to consider and verify factors such as income, assets, debts, and DTI to reasonably conclude the borrower can repay before originating most residential mortgages.

Question 6

A 'Qualified Mortgage' (QM) under Regulation Z generally prohibits which feature?

TheoryPractice · Accepted Answer

Negative amortization, interest-only payments, or terms exceeding 30 years. QMs cannot have risky features such as negative amortization, interest-only periods, balloon payments (with limited exceptions), or terms over 30 years, and limit points and fees.

Question 7

Under RESPA, when servicing of a mortgage is transferred, the borrower must receive a:

TheoryPractice · Accepted Answer

Servicing transfer notice identifying the new servicer and effective date. RESPA requires the transferor to send a goodbye letter and the transferee a hello letter, generally with at least 15 days' advance notice, identifying the new servicer.

Question 8

Under RESPA, the maximum escrow cushion a servicer may generally require is:

TheoryPractice · Accepted Answer

Two months of escrow payments (one-sixth of annual disbursements). RESPA limits the escrow cushion to two months of escrow payments, equal to one-sixth of the estimated total annual disbursements from the account.

Question 9

Regulation Z generally applies to consumer credit when which of the following is true?

TheoryPractice · Accepted Answer

Credit is offered to a consumer, is subject to a finance charge or payable in more than four installments, and is for personal, family, or household purposes. Reg Z covers consumer credit for personal/family/household purposes that has a finance charge or is payable in more than four installments; business, commercial, and agricultural credit are generally exempt.

Question 10

The Mortgage Disclosure Improvement Act (MDIA) established a waiting period requiring that consummation occur no earlier than:

TheoryPractice · Accepted Answer

The seventh business day after the early disclosures are delivered to the borrower. MDIA requires early disclosures within 3 business days of application and prohibits consummation until the 7th business day after those disclosures are provided, with a 3-day re-disclosure rule for APR changes.

NMLS Mortgage Loan Exam Questions & Answers 2026 (21–30)

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