These are Hard Mode questions from our bank: applied questions with dates, amounts and loan-file facts, the style that costs candidates points on the real test. Answers and worked explanations are shown. All questions are original; they are not real NMLS test questions.
A servicer open Monday through Friday receives a borrower's request for a payoff statement on her high-cost mortgage on Monday, June 8, 2026. She has asked for no other payoff statements this year, and no holidays fall that week. By what date must the servicer provide it?
Why: For a high-cost mortgage, a payoff statement must be provided within 5 business days of the request (12 CFR 1026.34(a)(9)(v), as at 11 Oct 2026). Counting the days the servicer is open after Monday, June 8: June 9, 10, 11, 12 and 15. Wednesday, June 17 is the 7-business-day deadline for other dwelling-secured loans (1026.36(c)(3)), and Saturday, June 13 wrongly counts calendar days. Source: 12 CFR 1026.34(a)(9); 12 CFR 1026.36(c)(3); 12 CFR 1026.2(a)(6) (ecfr.gov, as at 11 Oct 2026).
A creditor gives a Loan Estimate for a loan to buy a house that the builder has not yet started. Closing is expected in about eight months. What must the original Loan Estimate say for the creditor to issue a revised Loan Estimate later simply because settlement is delayed?
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Why: For new construction where settlement is expected more than 60 days after the Loan Estimate, the creditor may issue a revised Loan Estimate for a delay only if the original says clearly that it may do so until 60 days before consummation (12 CFR 1026.19(e)(3)(iv)(F); 1026.37(m)(8), as at 11 Oct 2026). Without that statement, a delayed settlement alone is not a valid reason to revise. The 10-business-day expiration statement concerns the borrower's intent to proceed, not construction delays. Source: 12 CFR 1026.19(e)(3)(iv)(F); 12 CFR 1026.37(m)(8) (ecfr.gov, as at 11 Oct 2026).
A $95,000 first-lien loan closes in 2026. The borrower pays a $2,900 origination fee to the creditor, $1,350 for title insurance and services to a title agency owned by the creditor, and a reasonable $550 appraisal fee to an unaffiliated appraiser that the creditor shares in no way. What are the points and fees, and is the loan within the QM limit?
Why: Real-estate-related fees such as title and appraisal charges are excluded from points and fees only if reasonable, the creditor gets no compensation from them, and they are not paid to an affiliate of the creditor (12 CFR 1026.32(b)(1)(iii), as at 11 Oct 2026). Step 1: $2,900 origination + $1,350 affiliate title = $4,250; the unaffiliated $550 appraisal is excluded. Step 2: for 2026, a loan of $82,775 to $137,957 has a $4,139 limit (12 CFR 1026.43(e)(3); 2026 figures, effective Jan 1, 2026). $4,250 exceeds it, so the loan is not a QM. Source: 12 CFR 1026.32(b)(1); 12 CFR 1026.43(e)(3); 2026 figures, effective Jan 1, 2026 (ecfr.gov, as at 11 Oct 2026).
A lender applies a $150,000 minimum loan amount to every applicant. Data show the policy screens out applicants in mostly minority areas far more often, and the lender has no legitimate business need for that particular minimum. Under the Fair Housing Act, which fair lending theory best fits?
Why: Disparate impact (the 'discriminatory effects' theory) applies when a facially neutral practice actually or predictably has a disproportionate adverse effect on a protected group and is not necessary to achieve a substantial, legitimate, nondiscriminatory interest, or that interest could be served by a less discriminatory practice (24 CFR 100.500). Disparate treatment and overt discrimination involve treating applicants differently because of a protected characteristic, which did not happen here. Note the split as at Oct 2026: the CFPB's amendments to Regulation B, effective 21 July 2026, state that ECOA does not provide for the effects test (12 CFR 1002.6(a); 91 FR 21620), so this theory now rests on the Fair Housing Act. Source: 24 CFR 100.500; 42 U.S.C. 3605; 12 CFR 1002.6(a) and comment 6(a)-2 as amended by 91 FR 21620 (Apr 22, 2026), effective Jul 21, 2026 (as at 11 Oct 2026).
An assistant at a licensed lender tells callers the lender's posted rates, gives them the lender's general rate sheet and takes their contact details for an MLO. She does not discuss terms for a particular borrower. Under Regulation H, is she offering or negotiating terms?
Why: Offering or negotiating terms means presenting particular terms to a borrower for acceptance, communicating directly or indirectly with a borrower to reach a mutual understanding about prospective terms, or recommending, referring or steering a borrower to particular terms (12 CFR 1008.103(c)(2)). Providing general explanations or describing steps in the process, without presenting particular terms for a specific borrower, is not offering or negotiating. Source: 12 CFR 1008.103(c)(2) (as at 11 Oct 2026).
A commissioner issued an interim license under its transition procedures, then learns the license was granted on inaccurate information. Under the Model State Law, what immediate step may the commissioner take?
Why: Under the Model State Law, the commissioner may enter an immediate temporary order to cease business under a license or interim license that was granted in error or whose holder is in violation (Model State Law MSL XX.XXX.130(1)(e), as at 11 Oct 2026). The commissioner does not have to wait for renewal or go to court first. NMLS unique identifiers are permanent and are never retired. Source: CSBS/AARMR Model State Law MSL XX.XXX.040(5), 130(1)(e) (Final S.A.F.E. cross-reference table, mortgage.nationwidelicensingsystem.org, as at 11 Oct 2026).
A borrower bought her home eight months ago for $250,000, has lived in it since, and has $15,000 of documented improvements. It now appraises at $290,000. For an FHA rate-and-term refinance, what is the LTV-based maximum base loan amount, rounded down to the whole dollar?
Why: If the home was bought less than 12 months ago, FHA uses the lesser of the purchase price plus documented improvements or the current value (HUD Handbook 4000.1 II.A.2.a, as at 11 Oct 2026). That is the lesser of $265,000 and $290,000, so $265,000. The rate-and-term maximum is 97.75%: $265,000 x 97.75% = $259,037.50, rounded down to $259,037. Using the new $290,000 appraisal ($283,475) is the tempting mistake. Source: HUD Handbook 4000.1 (Update 17, last revised Nov 26, 2025), II.A.2.a (Adjusted Value) and II.A.8.d (Rate and Term) (as at 11 Oct 2026).
An ARM's rate changes again (not the first adjustment), and the first payment at the new amount is due Tuesday, December 1, 2026. The index lookback is 45 days. Which mailing date for the rate-change notice complies with Regulation Z?
Why: For a rate adjustment that changes the payment, the servicer must send the notice at least 60 but no more than 120 days before the first payment at the adjusted level is due (12 CFR 1026.20(c)(2), as at 11 Oct 2026). For December 1 that window runs from August 3 to October 2. September 15 is 77 days before. October 14 (48 days) is too late, July 15 (139 days) too early, and November 6 uses the 25-day rule that applies only to short lookbacks or very frequent adjustments. Source: 12 CFR 1026.20(c) (as at 11 Oct 2026).
