What is the diagnostic?

A quick 20 scored questions check, weighted like the real exam, that shows you which section you are weakest in. About twenty minutes, untimed, no account.

How long does it take?

About twenty minutes. You get the answer and the explanation right after each question.

Yes, with no account and no card. It is drawn from the 30 free questions, which are open to anyone, and the whole readout is shown.

What does the readout show?

Your score against the 75 percent pass mark, then every section on its own line against the same mark, and it names the section furthest below it. The SAFE Act sets that mark, so the line is the exam's own and not this site's.

Do I need an account?

Not for this. The result is kept in this browser, so you can come back to it on the same device. A free account keeps it anywhere and keeps what you practice afterwards.

Is OriginatorExam connected to Nationwide Multistate Licensing System?

OriginatorExam is independent and not affiliated with NMLS, the State Regulatory Registry, the Conference of State Bank Supervisors or Prometric.

Diagnostic

Where do you actually stand?

20 questions, weighted like the exam. The result comes back broken down by section, the way a real fail report is.

What it measures

20 scored questions across the 5 exam sections, weighted like the paper. Each one is marked as you answer it, with the explanation under it.

Free, no account, and you can stop whenever you like.

What comes back

Your overall score against the 75 percent pass mark, then every section on its own line against the same mark, with the weakest one named. The SAFE Act sets that mark and the handbook states it, so it is the exam's own line and not ours. The shape matches a real fail report, which comes back section by section.

See the readout's shape, built from an example sitting, before you sit anything.

Why the weighting matters

The content outline gives each of the five sections a share of the paper, and the shares are nowhere near even: Mortgage Loan Origination Activities carries 27 percent and the smallest carries 11 percent. A weak heavy section costs far more than a weak light one, which is why this readout reports every section separately instead of handing back one number.

What you may take in

Nothing. The handbook is explicit: no personal items in the testing room, and no dictionaries, books, papers or reference materials of any kind. A four-function calculator is handed out at the center for the questions that need arithmetic, and your own stays outside along with phones, watches, smart devices, notes and reading material. This diagnostic is untimed and you can look things up, so do not read the score as a prediction. On the day, with no notes and a clock running, expect lower.

Before you pay for another sitting

The test costs $110 per attempt, paid to NMLS when the test enrollment window is opened. A retake is a new enrollment at the same fee. The enrollment window is 180 days. A failed exam cannot be retaken for 30 calendar days. The diagnostic is free, and its readout tells you which of the five sections to spend those days on.

Every question in this diagnostic

The Real Estate Settlement Procedures Act (RESPA) and Regulation X apply to which class of transactions, apart from the stated exemptions?
- A Federally related mortgage loans Correct
- B Every loan a licensed originator handles Coverage turns on the loan being a federally related mortgage loan, not on who took the application.
- C Loans secured by vacant land in every case A loan on vacant or unimproved property is exempt unless the proceeds put a structure or a manufactured home on that land within two years.
- D Business purpose loans secured by a dwelling Credit extended primarily for a business, commercial or agricultural purpose is on the exemption list, whatever secures it.
Regulation X applies the Real Estate Settlement Procedures Act to federally related mortgage loans and to nothing else, so a transaction that never falls in that class sits outside the rule unless an exemption or partial exemption says otherwise.

Regulation X, 12 CFR s. 1024.5(a)
Section 8 of the Real Estate Settlement Procedures Act (RESPA) bars giving or accepting a thing of value under an agreement to do what?
- A Refer settlement service business to a person Correct
- B Set a price above the local market rate A high price on its own proves nothing under this section; the Bureau may investigate it, but pricing is not the agreement the section describes.
- C Share an office with a settlement service provider Sharing premises is not the conduct the section names, which is an agreement that business will be referred.
- D Advertise a settlement service to past clients Advertising to past clients involves no exchange of a thing of value for referrals, so the section does not reach it.
The section bars any fee, kickback or other thing of value given or accepted under an agreement or understanding that settlement service business will be referred, and the agreement need not be written because a practice, pattern or course of conduct establishes one.

Regulation X, 12 CFR s. 1024.14(b)
Which characteristic is a prohibited basis under the Equal Credit Opportunity Act (ECOA) and Regulation B?
- A Income from a public assistance program Correct
- B Familial status, such as children in the home Familial status is a Fair Housing Act basis and does not appear on the list of prohibited bases in Regulation B.
- C Physical handicap or disability of the applicant Handicap is a Fair Housing Act basis; the list in Regulation B does not carry it.
- D The applicant's occupation and length of employment Occupation and job tenure are ordinary underwriting facts and are not on the list at all.
Regulation B lists race, color, religion, national origin, sex, marital status, age, income derived from a public assistance program, and the good faith exercise of a right under the Consumer Credit Protection Act, so public assistance income is a prohibited basis while handicap and familial status belong to the Fair Housing Act instead.

Regulation B, 12 CFR s. 1002.2(z)
Which of the following is a dwelling under Regulation Z, whether or not it is attached to real property?
- A A mobile home used as a residence Correct
- B A six-unit apartment building The definition stops at four units, so a six-unit building is outside it.
- C A vacant lot zoned for housing A dwelling is a residential structure, and bare land carries no structure.
- D An office condominium unit The condominium unit has to be residential; an office unit is not used as a residence.
Regulation Z defines a dwelling as a residential structure containing one to four units, attached to real property or not, and the term expressly includes a condominium unit, a cooperative unit, a mobile home and a trailer where it is used as a residence.

Regulation Z, 12 CFR s. 1026.2(a)(19)
Which of the following transactions carries no right of rescission under Regulation Z?
- A A loan to buy the consumer's principal dwelling Correct
- B A home equity line on the principal dwelling A line of credit secured by the principal dwelling is rescindable, which is why the open-end rescission rules exist.
- C A cash-out refinance with a different creditor A refinance with a different creditor is fully rescindable, and only a same-creditor refinance is limited.
- D A second mortgage taken out for home repairs A second mortgage on the principal dwelling does not finance its acquisition, so the purchase-money exemption does not cover it.
A residential mortgage transaction, meaning the loan that finances the acquisition or initial construction of the consumer's principal dwelling, is on the list of transactions the right to rescind does not reach, while a refinance with a new creditor, a home equity line and a second mortgage on that dwelling all carry the right.

Regulation Z, 12 CFR s. 1026.23(f)(1)
The Secure and Fair Enforcement for Mortgage Licensing Act encouraged the states, acting through two bodies, to establish the Nationwide Mortgage Licensing System and Registry. Which is one of them?
- A The Conference of State Bank Supervisors Correct
- B The Department of Housing and Urban Development This department held the federal backup role over a failing state system before 2010, but it was never one of the two bodies the states were told to work through.
- C The Consumer Financial Protection Bureau The Bureau holds the federal backup role today. It did not exist when this section was written and is not named in it.
- D The Federal Housing Finance Agency This agency supervises the housing finance enterprises and has no part in the licensing system this section describes.
The statute encourages the states, acting through the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, to set up the registry, so the two sponsoring bodies are associations of state regulators rather than federal agencies.

SAFE Act, 12 USC s. 5101
Under the Secure and Fair Enforcement for Mortgage Licensing Act, which work falls inside the definition of administrative or clerical tasks?
- A Collecting processing information and contacting the consumer for it Correct
- B Advising the consumer which rate option suits her Counseling a consumer about which loan rate to take is outside the clerical definition and is originator work.
- C Negotiating the loan terms with the consumer Negotiating terms is the activity the licensing requirement exists for, and the clerical definition does not reach it.
- D Deciding whether the file meets underwriting guidelines The definition covers moving information around, not making the credit decision the information supports.
The definition covers the receipt, collection and distribution of the information a file needs for processing or underwriting, together with contacting the consumer to obtain it, so assembling the file is clerical while advising or deciding is not.

SAFE Act, 12 USC s. 5102(4)(C)
Under the Secure and Fair Enforcement for Mortgage Licensing Act, what is a nontraditional mortgage product?
- A Any mortgage product other than a 30-year fixed rate mortgage Correct
- B Any loan that allows negative amortization Negative amortization describes one such product, and the definition is far wider than that.
- C Any interest-only or payment-option loan These are examples, and the definition sweeps in every product that is not a 30-year fixed rate mortgage.
- D Any loan a federal agency does not insure Federal insurance or guarantee decides whether a loan is conventional, not whether it is nontraditional.
Under the Act the term means any mortgage product other than a 30-year fixed rate mortgage, so even a 15-year fixed rate loan is a nontraditional mortgage product for licensing purposes.

SAFE Act, 12 USC s. 5102(7)
In the mortgage industry's standard vocabulary, what is it that makes a mortgage loan a conventional mortgage?
- A No federal government agency insures or guarantees it Correct
- B Its loan amount is inside the current loan limit Loan size is the conforming test, which sits on top of the conventional test rather than defining it.
- C A secondary market investor has agreed to buy it Who buys the loan afterwards does not change whether a federal agency stands behind it.
- D The interest rate is fixed for the whole term A conventional loan may carry a fixed or an adjustable rate, so the rate structure decides nothing.
A conventional mortgage means one that no federal government agency insures or guarantees, so what decides the label is who stands behind the loan rather than its size, its rate or its buyer.
On a variable-rate loan, what does Regulation Z mean by the fully-indexed rate?
- A The index value plus the margin at consummation Correct
- B The discounted rate the borrower starts on An introductory or discounted rate is what the borrower actually pays at first, which is a different figure.
- C The maximum rate under the lifetime cap The lifetime cap sets the ceiling the rate may ever reach, not the rate the index and margin produce.
- D The rate at the first scheduled adjustment The rate at the first adjustment turns on the index value on that later date, not on the value at consummation.
The fully-indexed rate means the interest rate calculated using the index value and the margin at the time of consummation, so it is what the borrower would pay with no introductory discount applied.

Regulation Z, 12 CFR s. 1026.18(s)(7)(vi)
Under Regulation Z, when does the amount owed on a reverse mortgage transaction become due, apart from default?
- A When the consumer dies, transfers the dwelling, or moves out Correct
- B When the consumer reaches a stated age Age decides who may take out the loan, not when the balance falls due.
- C At the end of a fixed ten-year term The obligation is not written to a fixed maturity date of this kind.
- D When the balance first exceeds the property's value The loan is nonrecourse, so a balance above the property's value does not by itself make it payable.
A reverse mortgage transaction is a nonrecourse obligation on which principal, interest and any shared appreciation fall due, other than on default, only after the consumer dies, the dwelling is transferred, or the consumer stops occupying it as a principal dwelling.

Regulation Z, 12 CFR s. 1026.33(a)(2)
Apart from the stated exceptions, when is an estimated closing cost disclosed on the Loan Estimate treated as made in good faith?
- A When the creditor used its best judgment Good faith is measured against what the consumer pays rather than against how careful the estimate was.
- B When the increase stays under 10 percent The 10 percent cushion is one exception, for certain third-party services and recording fees, not the general test.
- C When the consumer pays no more than the estimate Correct
- D When the consumer signs the estimate A signature on an estimate changes nothing about whether the charge exceeded the amount disclosed.
An estimated closing cost is in good faith only where the charge paid by or imposed on the consumer does not exceed the amount originally disclosed, and every tolerance above that baseline is a stated exception to it.

Regulation Z, 12 CFR s. 1026.19(e)(3)(i)
How soon after receiving an application must the lender give the applicant the written list of homeownership counseling organizations?
- A Within three business days of the application Correct
- B Within seven business days of the application Seven business days is a waiting period before consummation and not the counseling list clock.
- C At or before consummation Consummation is far too late, since the list exists to help the applicant get advice while the loan is being arranged.
- D Within 30 days of the application Thirty days is the age limit on the data the list is drawn from, not the deadline for giving it out.
The list must reach the applicant not later than three business days after a lender, mortgage broker or dealer receives the application, and the data behind it can be no older than 30 days when the list is handed over.

Regulation X, 12 CFR s. 1024.20(a)(1)
May a creditor ask an applicant about permanent residency and immigration status in connection with a credit transaction?
- A No, it is a prohibited basis National origin is the prohibited basis; immigration status is a separate question the rule allows.
- B Only where the loan is government insured The permission is general and does not depend on the loan being insured or guaranteed.
- C Yes, that inquiry is permitted Correct
- D Only after the loan is approved Nothing holds the question back until approval, since it may be asked in connection with the transaction.
The rule expressly permits a creditor to ask about the permanent residency and immigration status of an applicant or any other person in connection with a credit transaction, so the question is allowed even though national origin is a prohibited basis.

Regulation B, 12 CFR s. 1002.5(e)
When a creditor considers a consumer's income or assets for the ability-to-repay determination, what is expressly left out?
- A Income from a part-time second job Income from a second job is the consumer's income and can be counted where it is verified.
- B Assets held in a retirement account Assets are on the list the creditor may consider, retirement savings included.
- C Reasonably expected income from a signed offer Reasonably expected income is named in the rule alongside current income.
- D The value of the dwelling securing the loan Correct
The creditor must consider the consumer's current or reasonably expected income or assets other than the value of the dwelling that secures the loan, so a file underwritten on the collateral alone fails the requirement.

Regulation Z, 12 CFR s. 1026.43(c)(2)
Before consummating a higher-priced mortgage loan secured by a first lien on the consumer's principal dwelling, what must the creditor establish?
- A A reserve equal to six monthly payments The escrow rule sets no reserve measured in monthly payments.
- B An escrow account for taxes and required insurance Correct
- C A separate account for the appraisal fee The appraisal fee is a closing cost and has no account of its own.
- D An escrow account, only where the borrower asks The account is required by the rule itself, and no request from the borrower is needed.
A creditor may not extend a first-lien higher-priced mortgage loan on the consumer's principal dwelling unless an escrow account for property taxes and the mortgage-related insurance premiums it requires is established before consummation.

Regulation Z, 12 CFR s. 1026.35(b)(1)
Under Regulation X (12 CFR Part 1024), what makes an action a referral of settlement service business?
- A It affirmatively influences the consumer's choice of provider Correct
- B It appears in a written agreement between the parties The definition covers an oral action as well as a written one, so nothing has to be in writing.
- C It names one provider and no alternative Pointing at a single provider is one way to influence a choice, but the rule turns on the effect on the selection rather than on how many providers were named.
- D It is made after the loan application is taken Timing is not part of the definition, which reaches an action at any point that influences the selection.
A referral is any oral or written action that has the effect of affirmatively influencing which settlement service provider a person selects, so the form the action takes does not matter and a spoken recommendation counts.

Regulation X, 12 CFR s. 1024.14(f)(1)
On a dwelling-secured consumer credit transaction, when may the consumer and the creditor agree to resolve a dispute by arbitration?
- A After the dispute or claim has arisen Correct
- B In the loan contract signed at closing A term in the loan contract requiring arbitration is exactly what the rule prohibits.
- C At any time, if the consumer waives court rights A waiver of the right to bring a federal claim in court cannot be applied against the consumer either.
- D Never, because arbitration of mortgage disputes is banned Arbitration becomes available once a dispute exists, so the prohibition is not total.
The contract may not require arbitration, but the prohibition does not stop the consumer and the creditor or an assignee from agreeing to arbitrate after a dispute or claim under the transaction arises, so the timing of the agreement decides it.

Regulation Z, 12 CFR s. 1026.36(h)(1)
Before a high-cost mortgage that refinances an existing debt, what may a creditor or mortgage broker not tell the consumer to do?
- A Default on the existing loan or debt Correct
- B Pay down the existing balance before closing Paying a balance down is not a default and nothing in the rule prohibits suggesting it.
- C Shop the refinance with another lender Telling a consumer to compare offers is not conduct this rule reaches.
- D Obtain counseling on the advisability of the mortgage Counseling on the advisability of a high-cost mortgage is required before the loan is extended.
The rule prohibits a creditor or mortgage broker from recommending or encouraging default on an existing loan or other debt before and in connection with a high-cost mortgage that refinances that debt, and it names the broker as well as the creditor.

Regulation Z, 12 CFR s. 1026.34(a)(6)
An advertisement for credit states specific credit terms. Which terms may it state?
- A Only terms the creditor is or will be offering Correct
- B Any terms the consumer might qualify for elsewhere What a consumer could get from someone else is not a term this creditor is arranging or offering.
- C Terms the creditor once offered but has discontinued A term that is no longer offered is not one that actually is or will be arranged.
- D Terms the creditor could offer if the market improved A term the creditor might reach under better conditions is not one it actually is or will be offering.
If an advertisement states specific credit terms it may state only those terms that actually are or will be arranged or offered by the creditor, which closes off the rate advertised to draw calls that nobody can get.

Regulation Z, 12 CFR s. 1026.24(a)

Questions about the diagnostic

What is the diagnostic?: A quick 20 scored questions check, weighted like the real exam, that shows you which section you are weakest in. About twenty minutes, untimed, no account.
How long does it take?: About twenty minutes. You get the answer and the explanation right after each question.
Is it really free?: Yes, with no account and no card. It is drawn from the 30 free questions, which are open to anyone, and the whole readout is shown.
What does the readout show?: Your score against the 75 percent pass mark, then every section on its own line against the same mark, and it names the section furthest below it. The SAFE Act sets that mark, so the line is the exam's own and not this site's.
Do I need an account?: Not for this. The result is kept in this browser, so you can come back to it on the same device. A free account keeps it anywhere and keeps what you practice afterwards.
Is OriginatorExam connected to Nationwide Multistate Licensing System?: OriginatorExam is independent and not affiliated with NMLS, the State Regulatory Registry, the Conference of State Bank Supervisors or Prometric.