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NH MLO practice questions

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Question 1New Hampshire state-specific mortgage lending laws and regulations

Which New Hampshire statute is the primary licensing law governing mortgage brokers, bankers, and servicers in the state?

  1. RSA 383-A
  2. RSA 399-A Correct answer.
  3. RSA 361-A
  4. RSA 397-A

Explanation

RSA 399-A is the New Hampshire statute regulating mortgage bankers, mortgage brokers, and mortgage servicers, administered by the Banking Department. RSA 361-A governs retail installment sales, and RSA 383-A is the banking and credit union statute.

Question 2New Hampshire state-specific mortgage lending laws and regulations

In New Hampshire, which regulator administers the mortgage licensing law and examines licensed mortgage entities?

  1. The New Hampshire Real Estate Commission
  2. The New Hampshire Insurance Department
  3. The New Hampshire Bank Commissioner through the Banking Department Correct answer.
  4. The Consumer Financial Protection Bureau

Explanation

The New Hampshire Banking Department, headed by the Bank Commissioner, administers RSA 399-A and examines licensed mortgage bankers, brokers, and servicers. The other agencies regulate different industries or operate at the federal level.

Question 3New Hampshire state-specific mortgage lending laws and regulations

A mortgage loan originator licensed in New Hampshire must complete pre-licensing education of at least how many hours?

  1. 12 hours
  2. 20 hours Correct answer.
  3. 8 hours
  4. 30 hours

Explanation

Under the SAFE Act requirements adopted in New Hampshire, an MLO must complete at least 20 hours of pre-licensing education, including federal law, ethics, and lending standards. Eight hours is the annual continuing education requirement, not pre-licensing.

Question 4New Hampshire state-specific mortgage lending laws and regulations

How many hours of continuing education must a New Hampshire licensed mortgage loan originator complete each year?

  1. 15 hours
  2. 8 hours Correct answer.
  3. 10 hours
  4. 6 hours

Explanation

New Hampshire MLOs must complete 8 hours of continuing education annually, including at least one hour each on federal law, ethics, and non-traditional lending. This mirrors the SAFE Act standard.

Question 5New Hampshire state-specific mortgage lending laws and regulations

Before a residential mortgage loan closes, New Hampshire law requires the lender to provide the borrower with a disclosure of the loan terms at least how many days in advance for most first-lien loans?

  1. 3 days Correct answer.
  2. 5 days
  3. 7 days
  4. 1 day

Explanation

New Hampshire requires certain advance disclosure of final loan terms, generally at least 3 days before closing for first-lien residential mortgage loans, allowing borrowers to review terms. This mirrors the federal TRID timing concept but is a state requirement.

Question 6New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage broker receives a fee from a borrower and also receives compensation from the lender on the same transaction. Under RSA 399-A, this practice is:

  1. Prohibited unless the borrower consents in writing to the dual compensation
  2. Permitted if disclosed on the closing disclosure
  3. Permitted only for loans under $100,000
  4. Prohibited outright regardless of disclosure Correct answer.

Explanation

New Hampshire prohibits a mortgage broker from receiving compensation from both the borrower and the lender on the same loan, regardless of disclosure. Disclosure does not cure the prohibited dual compensation.

Question 7New Hampshire state-specific mortgage lending laws and regulations

Which of the following activities requires a New Hampshire mortgage banker or broker license?

  1. Servicing a loan the entity originated and continues to hold
  2. Purchasing mortgage loans as an investor
  3. Making a single loan secured by a commercial property over $1 million
  4. Taking an application for a residential mortgage loan secured by a New Hampshire dwelling Correct answer.

Explanation

Taking residential mortgage loan applications and offering or negotiating such loans secured by New Hampshire property requires licensure under RSA 399-A. Certain exemptions exist for servicers of their own loans, large commercial transactions, and passive investors.

Question 8New Hampshire state-specific mortgage lending laws and regulations

Under New Hampshire law, a mortgage loan originator's license must be renewed how often?

  1. Every two years
  2. Every year Correct answer.
  3. Every five years
  4. Every three years

Explanation

New Hampshire MLO licenses are renewed annually through the Nationwide Multistate Licensing System, tied to completion of continuing education. The renewal cycle is one year, not multi-year.

Question 9New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire licensed mortgage broker must maintain a surety bond in an amount set by the Banking Department. The purpose of the bond is to:

  1. Pay the broker's federal income taxes
  2. Insure the borrower's property against fire
  3. Protect consumers who suffer loss from violations of the licensing law Correct answer.
  4. Guarantee the broker will earn a profit

Explanation

The surety bond required of licensed mortgage brokers protects consumers and the state against losses caused by the licensee's violations of RSA 399-A. It is not a profit guarantee, tax instrument, or property insurance.

Question 10New Hampshire state-specific mortgage lending laws and regulations

New Hampshire's mortgage licensing law requires licensees to maintain records of mortgage loan transactions for at least how long?

  1. 3 years Correct answer.
  2. 1 year
  3. 2 years
  4. 10 years

Explanation

Licensees must retain records of mortgage loan transactions for at least three years after the loan is closed or the transaction concludes. This supports examination and enforcement by the Banking Department.

Question 11New Hampshire state-specific mortgage lending laws and regulations

A mortgage loan originator licensed in New Hampshire moves to a new employing mortgage broker. What must occur for the MLO to continue originating loans?

  1. The MLO must surrender the license and wait one year
  2. The license must be amended through NMLS to reflect the new sponsor before originating Correct answer.
  3. The MLO must retake the pre-licensing course
  4. Nothing, because the license follows the individual automatically

Explanation

An MLO license is tied to a sponsoring mortgage broker or banker, and a change of sponsor must be reported and processed through NMLS before the originator acts for the new employer. The license does not transfer automatically.

Question 12New Hampshire state-specific mortgage lending laws and regulations

Which conduct by a New Hampshire mortgage broker would violate the state's prohibited practices provisions?

  1. Charging an undisclosed fee that was not disclosed to the borrower Correct answer.
  2. Providing a written good-faith estimate of closing costs
  3. Referring a borrower to a housing counselor
  4. Advertising the broker's license number

Explanation

RSA 399-A prohibits charging fees that were not disclosed to the borrower and other deceptive practices. Providing estimates, referrals, and truthful advertising are permissible activities.

Question 13New Hampshire state-specific mortgage lending laws and regulations

Under New Hampshire law, a mortgage servicer must provide a borrower with a payoff statement within how many business days of a written request?

  1. 30 business days
  2. 5 business days Correct answer.
  3. 10 business days
  4. 3 business days

Explanation

New Hampshire requires mortgage servicers to provide a payoff statement within a short statutory period, generally 5 business days after a written request, so borrowers can complete payoff or refinance.

Question 14New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire borrower submits a written complaint to the Banking Department alleging a licensee violated RSA 399-A. The Banking Department may:

  1. Require the borrower to arbitrate before investigating
  2. Only forward the complaint to the lender without action
  3. Dismiss complaints that do not exceed $500
  4. Investigate and take disciplinary action, including fines or license suspension Correct answer.

Explanation

The Banking Department has authority to investigate complaints and impose discipline, including fines, restitution, and license suspension or revocation. It is not required to route complaints to the lender or to arbitrate first.

Question 15New Hampshire state-specific mortgage lending laws and regulations

New Hampshire's licensing law requires mortgage bankers and brokers to demonstrate financial responsibility. Which standard applies?

  1. A minimum net worth requirement set by the Banking Department Correct answer.
  2. A requirement to be publicly traded
  3. A requirement to hold $10 million in cash
  4. No financial requirement at all

Explanation

Licensees must maintain a minimum net worth and meet other financial responsibility standards established by the Banking Department under RSA 399-A. There is no blanket requirement to be publicly traded or to hold a specific cash amount.

Question 16New Hampshire state-specific mortgage lending laws and regulations

Which federal law is incorporated into New Hampshire's mortgage lending requirements regarding disclosures to borrowers?

  1. The Truth in Lending Act and Regulation Z Correct answer.
  2. The Securities Exchange Act
  3. The Communications Act
  4. The Fair Labor Standards Act

Explanation

New Hampshire's mortgage rules incorporate federal Truth in Lending Act and Regulation Z disclosure requirements, along with RESPA. The other statutes regulate labor, securities, and communications and are unrelated.

Question 17New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage loan originator is convicted of a felony involving fraud. Under state law, the Banking Department may:

  1. Automatically transfer the license to another person
  2. Deny, suspend, or revoke the license Correct answer.
  3. Ignore the conviction if the MLO completes continuing education
  4. Require only a written apology

Explanation

A felony fraud conviction is grounds for denial, suspension, or revocation of a mortgage license under RSA 399-A. Continuing education or an apology does not cure the disqualifying conduct.

Question 18New Hampshire state-specific mortgage lending laws and regulations

Under New Hampshire law, which of the following is required in a mortgage broker's written agreement with a borrower?

  1. A clause requiring arbitration in another state
  2. A waiver of the borrower's right to complain
  3. A statement of the broker's fees and the services to be provided Correct answer.
  4. A promise that the loan will close within 24 hours

Explanation

New Hampshire requires mortgage brokers to provide a written agreement disclosing the fees charged and the services to be performed. Waivers of complaint rights and mandatory out-of-state arbitration clauses are not required and may be unenforceable.

Question 19New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage servicer accepts a borrower's payment but fails to credit it on the date received. This conduct is:

  1. Permissible if the servicer posts payments weekly
  2. Permissible for loans over $200,000
  3. Allowed if the borrower pays by check
  4. A violation of state servicing requirements Correct answer.

Explanation

New Hampshire servicing rules require prompt crediting of payments as of the date of receipt. Failing to credit a received payment violates those requirements regardless of payment method or loan amount.

Question 20New Hampshire state-specific mortgage lending laws and regulations

New Hampshire's mortgage licensing law exempts which of the following from licensure?

  1. A mortgage servicer collecting payments
  2. A mortgage broker who charges borrower fees
  3. A person who takes residential mortgage applications for compensation
  4. A depository institution regulated by a state or federal banking agency Correct answer.

Explanation

RSA 399-A exempts certain regulated entities, including banks and credit unions supervised by state or federal banking agencies, from separate mortgage licensure. Individuals and non-depository brokers and servicers generally require licensure.

Question 21New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire licensee wants to use a trade name different from its licensed name in advertising. What must the licensee do?

  1. Change its federal tax identification number
  2. Register the trade name with the Real Estate Commission
  3. Notify and obtain approval from the Banking Department for the trade name Correct answer.
  4. Use the trade name without notifying anyone

Explanation

Licensees must notify the Banking Department and obtain approval before using a trade name in connection with mortgage activity. Unapproved trade names can create confusion and violate licensing rules.

Question 22New Hampshire state-specific mortgage lending laws and regulations

Under New Hampshire law, mortgage loan originators must be covered by a surety bond or net worth requirement unless they are:

  1. Working part-time
  2. Over age 65
  3. Licensed in another state
  4. Employed by a licensed mortgage broker or banker that meets the financial responsibility requirement Correct answer.

Explanation

Individual MLOs are generally covered by the bond or net worth maintained by their sponsoring licensed mortgage broker or banker. Part-time status, out-of-state licensure, or age does not create an exemption.

Question 23New Hampshire state-specific mortgage lending laws and regulations

New Hampshire's mortgage licensing law requires licensees to respond to Banking Department inquiries and examinations. Failure to cooperate may result in:

  1. Disciplinary action, including license suspension Correct answer.
  2. Automatic federal preemption
  3. No consequence if the licensee is profitable
  4. A reduction in continuing education hours

Explanation

Licensees must cooperate with Banking Department examinations and inquiries, and failure to do so is grounds for discipline, including suspension or revocation. Profitability or federal preemption does not excuse noncooperation.

Question 24New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage banker wants to close a loan where the borrower's income documentation is incomplete. Under state law, the banker should:

  1. Decline to close until required documentation is obtained Correct answer.
  2. Close the loan and waive the documentation requirement
  3. Close the loan at a higher interest rate
  4. Close the loan and obtain documentation later

Explanation

New Hampshire requires licensees to obtain and verify the documentation needed to support the loan decision before closing. Closing with incomplete documentation and curing later violates state lending standards.

Question 25New Hampshire state-specific mortgage lending laws and regulations

Which statement best describes New Hampshire's approach to licensing mortgage servicers?

  1. Servicers of residential mortgage loans must be licensed or exempt under RSA 399-A Correct answer.
  2. Servicers are entirely unregulated at the state level
  3. Servicers need only a real estate license
  4. Only federal agencies may service loans in New Hampshire

Explanation

New Hampshire regulates mortgage servicers under RSA 399-A, requiring licensure unless a specific exemption applies. Real estate licenses and federal agency status do not substitute for mortgage servicer licensing.

Question 26New Hampshire state-specific mortgage lending laws and regulations

Under New Hampshire RSA 399-A, a mortgage loan originator license expires on which date unless it is renewed?

  1. The licensee's birthday each year
  2. December 31 of each odd-numbered year
  3. December 31 of each year Correct answer.
  4. June 30 of each even-numbered year

Explanation

New Hampshire mortgage loan originator licenses run on a calendar-year cycle and expire on December 31 unless renewed through the Nationwide Multistate Licensing System. Renewal must be completed before expiration to avoid having to reapply. The Banking Department does not tie MLO expiration to a birthday or to a two-year cycle.

Question 27New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage broker advertises rates on a website. Under RSA 399-A, the advertisement must include which item?

  1. The name of the broker as licensed Correct answer.
  2. The broker's social security number
  3. The names of the broker's prior clients
  4. The broker's personal home address

Explanation

New Hampshire requires that advertising by licensees identify the licensee by its licensed name so the public can verify the entity. Including the licensed name lets consumers check standing with the Banking Department. Personal identifiers and client lists are not advertising requirements.

Question 28New Hampshire state-specific mortgage lending laws and regulations

Which New Hampshire statute is the primary licensing and regulatory framework for mortgage bankers, brokers, and loan originators?

  1. RSA 361-A
  2. RSA 397-A
  3. RSA 399-A Correct answer.
  4. RSA 358-A

Explanation

RSA 399-A is the New Hampshire statute governing mortgage bankers, brokers, and loan originators, including licensing and prohibited practices. The other cited chapters address different subject areas such as consumer protection or retail installment sales. Knowing the correct chapter helps candidates locate the operative rules.

Question 29New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage loan originator's criminal background check is conducted through which system as part of licensing?

  1. The FBI and state records via NMLS fingerprint submission Correct answer.
  2. A private employer's internal background vendor only
  3. The New Hampshire Secretary of State's business registry
  4. The local police department where the borrower resides

Explanation

MLO licensing requires fingerprint-based criminal history checks processed through the NMLS, covering FBI and state records. This is part of the uniform licensing standards adopted by New Hampshire. Employer vendors and local police are not the authorized channel for licensure screening.

Question 30New Hampshire state-specific mortgage lending laws and regulations

Under New Hampshire law, which entity has authority to examine the books and records of a licensed mortgage banker?

  1. The county sheriff's office
  2. The federal Department of Housing and Urban Development
  3. The New Hampshire Department of Motor Vehicles
  4. The New Hampshire Banking Department Correct answer.

Explanation

The Banking Department is the state regulator empowered to examine licensees' books, records, and operations under RSA 399-A. Examinations support compliance monitoring and consumer protection. Other agencies listed lack this mortgage licensing authority.

Question 31New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage broker wants to charge a borrower an application fee before any loan is closed. Under state law, which condition applies to such fees?

  1. The fee must be disclosed in the written agreement and must be reasonable Correct answer.
  2. The fee is prohibited entirely in New Hampshire
  3. The fee may be collected only in cash
  4. The fee may be collected only after closing

Explanation

New Hampshire requires broker compensation and fees to be set out in the written broker agreement with the borrower and to be reasonable in relation to services. Undisclosed or excessive charges are prohibited practices. There is no blanket ban on application fees, nor a cash-only or post-closing rule.

Question 32New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage servicer must respond to a borrower's qualified written request within the timeframe set by which federal law incorporated into state requirements?

  1. RESPA Correct answer.
  2. The Equal Credit Opportunity Act
  3. The Homeowners Protection Act
  4. The Fair Credit Reporting Act

Explanation

New Hampshire's mortgage servicing rules align with RESPA, which sets response deadlines for qualified written requests and notices of error. RESPA governs servicing disclosures and error resolution for federally related mortgage loans. The other statutes address credit reporting, lending discrimination, and mortgage insurance cancellation.

Question 33New Hampshire state-specific mortgage lending laws and regulations

Under New Hampshire RSA 399-A, a licensee must notify the Banking Department of a change in its principal place of business within what period?

  1. Within 30 days of the change Correct answer.
  2. No notice is required for address changes
  3. Only at the next license renewal
  4. Within 6 months of the change

Explanation

Licensees must keep their licensing record current and notify the Banking Department of material changes, including a principal place of business, within the regulatory timeframe, generally 30 days. Timely notice preserves accurate public records and examination contact information. Waiting until renewal or omitting notice can result in administrative action.

Question 34New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage loan originator is employed by a licensed mortgage broker. The MLO's license lapses for non-renewal while the MLO continues to take loan applications. What is the regulatory consequence?

  1. The applications are valid because the broker holds a license
  2. The MLO and the employing broker may face enforcement action for unlicensed activity Correct answer.
  3. The Banking Department automatically reinstates the license
  4. The MLO may continue working for 90 days while renewing

Explanation

Acting as an MLO without a valid license is unlicensed activity, exposing both the individual and the employing licensee to enforcement. A broker's license does not authorize an unlicensed individual to originate. There is no automatic grace period or reinstatement.

Question 35New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage banker denies a loan application. Under state and incorporated federal requirements, what must the banker provide the applicant?

  1. A verbal explanation only if the applicant calls
  2. A written notice of adverse action stating the reasons for denial Correct answer.
  3. A copy of the appraiser's license
  4. No notice because the loan was not closed

Explanation

Adverse action notice requirements, drawn from ECOA and Regulation B and applied to New Hampshire licensees, require written notice with the specific reasons for denial. The notice must be timely and informative. A closed loan is not a precondition for the notice obligation.

Question 36New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage broker's loan originator keeps borrower documents on a personal laptop. Which requirement is most directly implicated?

  1. The broker's net worth minimum
  2. The MLO's continuing education hours
  3. The broker's surety bond amount
  4. Safeguarding of confidential consumer information under state and federal privacy rules Correct answer.

Explanation

Licensees must protect nonpublic personal information, and storing borrower documents on personal devices without safeguards risks violating privacy and information security requirements. The other items concern licensing mechanics rather than data protection. Proper controls include secure storage and access limits.

Question 37New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire licensee wants to surrender its license. What must the licensee do regarding outstanding mortgage loan transactions?

  1. Abandon the records because the license is ending
  2. Transfer borrower files to any third party without notice
  3. Provide for servicing and records and notify the Banking Department of the surrender Correct answer.
  4. Continue originating until the license expires naturally

Explanation

Surrender does not extinguish obligations to borrowers or the state; the licensee must account for records, servicing, and notification to the Banking Department. Abandoning files or unauthorized transfers would violate recordkeeping and privacy rules. Origination must stop once the license is surrendered.

Question 38New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage broker charges a borrower a fee for a rate lock but does not disclose it in the broker agreement. This conduct is best characterized as:

  1. Acceptable because rate locks are optional
  2. Permissible if the amount is under $500
  3. Permissible if the lender also charges a fee
  4. A prohibited practice because fees must be disclosed in the written agreement Correct answer.

Explanation

New Hampshire requires broker fees to be disclosed in the written agreement with the borrower; an undisclosed charge is a prohibited practice regardless of amount. Optionality or a lender's separate fee does not cure the disclosure failure. Transparency is the operative rule.

Question 39New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage loan originator completes the required pre-licensing education. Which body approves the courses that satisfy this requirement?

  1. The borrower's chosen title company
  2. The federal Consumer Financial Protection Bureau directly
  3. The New Hampshire Real Estate Commission
  4. The NMLS-approved course provider system overseen under the SAFE Act framework Correct answer.

Explanation

Pre-licensing education must be taken from NMLS-approved providers under the SAFE Act framework adopted by New Hampshire. Course approval is centralized through the NMLS system rather than by title companies or the real estate commission. This ensures uniform standards across states.

Question 40New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage servicer receives a borrower payment on the 1st but posts it on the 5th, causing a late fee. Under state servicing standards, this is:

  1. Acceptable if the loan is federally insured
  2. Acceptable because the servicer has a five-day processing window
  3. Permissible if the late fee is later refunded
  4. A prohibited practice because payments must be credited as of the date received Correct answer.

Explanation

New Hampshire servicing standards, consistent with federal rules, require payments to be credited on the date received, and late fees cannot be imposed when a full payment arrives on time. Delayed posting that triggers a late fee violates this rule. Refunding the fee does not cure the underlying violation.

Question 41New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage banker's license application requires submission of which item to demonstrate financial responsibility?

  1. Audited or reviewed financial statements meeting Banking Department standards Correct answer.
  2. A personal letter of recommendation
  3. A borrower testimonial
  4. A list of competitor lenders

Explanation

Applicants must demonstrate financial responsibility through financial statements prepared to the Banking Department's standards, supporting net worth and solvency review. Letters, competitor lists, and testimonials have no bearing on financial capacity. Accurate financial reporting is central to licensure.

Question 42New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage broker's employee engages in a transaction involving fraud. Under RSA 399-A, how does the regulator treat the broker?

  1. Only the employee can ever be disciplined
  2. The broker is immune because it did not personally act
  3. The broker may be subject to discipline for the acts of its employees within the scope of employment Correct answer.
  4. Discipline requires a criminal conviction first

Explanation

Licensees are responsible for the conduct of their employees acting within the scope of their employment, and the Banking Department may discipline the licensed entity. Administrative discipline does not require a prior criminal conviction. Individual liability may also attach to the employee.

Question 43New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage loan originator must complete continuing education each year. What is the required number of hours under the SAFE Act standard adopted by the state?

  1. 20 hours
  2. 8 hours Correct answer.
  3. 4 hours
  4. 12 hours

Explanation

The SAFE Act standard adopted by New Hampshire requires 8 hours of continuing education annually, including required topics such as federal law and ethics. This keeps licensed originators current on regulatory changes. Other hour counts do not meet the standard.

Question 44New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage broker includes a clause in its borrower agreement requiring disputes to be resolved in another state. Which statement is most accurate under state consumer protection principles?

  1. Such a clause may be scrutinized as an unfair or deceptive practice if it impairs borrower rights Correct answer.
  2. The clause is required in all broker agreements
  3. The clause is always enforceable without review
  4. The clause eliminates the Banking Department's authority

Explanation

Terms that unfairly limit borrower remedies can be challenged as unfair or deceptive practices under New Hampshire consumer protection principles. The Banking Department's supervisory authority is not displaced by contract terms. Such clauses are neither required nor automatically enforceable.

Question 45New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage servicer plans to offer a loan modification to a delinquent borrower. Under state expectations, the servicer should:

  1. Foreclose immediately without evaluation
  2. Evaluate the borrower under applicable loss mitigation standards and document the decision Correct answer.
  3. Ignore the request until the borrower pays in full
  4. Charge a fee for merely reviewing the request

Explanation

Servicers are expected to follow applicable loss mitigation procedures, evaluate borrowers for available options, and document outcomes. Proceeding to foreclosure without evaluation or charging for basic review can violate servicing standards. Documentation supports accountability.

Question 46New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage banker uses a lead generator that collects borrower financial information and forwards it for a fee. Which compliance concern is most significant?

  1. Whether the arrangement constitutes unlicensed brokering or an improper fee-sharing arrangement Correct answer.
  2. Whether the borrower has a credit score above 700
  3. Whether the lead generator has a real estate license
  4. Whether the lead generator's office is in New Hampshire

Explanation

Arrangements that compensate third parties for steering borrowers can amount to unlicensed brokerage or improper fee sharing under RSA 399-A. The regulator examines substance over labels. Real estate licensure, office location, and borrower credit score are not the central issues.

Question 47New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage broker discloses in its agreement that it will receive compensation from the lender, but the borrower later shows the disclosure was buried and unclear. How would the Banking Department most likely view this?

  1. As compliant because lender compensation is always permitted
  2. As a possible prohibited practice because disclosure must be clear and meaningful Correct answer.
  3. As irrelevant because only borrower-paid fees matter
  4. As compliant because disclosure technically appeared somewhere

Explanation

Disclosure must be clear and meaningful, not merely technically present; buried or confusing disclosures can constitute prohibited practices. Lender-paid compensation must be transparent to the borrower. The regulator evaluates substance and comprehensibility.

Question 48New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire licensee's owner is convicted of a financial crime. Under RSA 399-A, what is the most likely regulatory effect on the license?

  1. The license automatically transfers to another owner
  2. The Banking Department may deny, suspend, or revoke the license based on the owner's conviction Correct answer.
  3. The license is unaffected because the owner is not an MLO
  4. The conviction matters only if the borrower complains

Explanation

The Banking Department evaluates the fitness of licensees and their control persons, and a financial crime conviction can support denial, suspension, or revocation. Control-person conduct is relevant even if that person is not an individual MLO. Automatic transfer or borrower-complaint triggers are not the rule.

Question 49New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage banker wants to pay a bonus to an unlicensed processor based on the number of loans closed. Which analysis is most accurate?

  1. Compensation tied to loan volume for unlicensed staff may create unlicensed-activity and fee-splitting concerns Correct answer.
  2. The bonus is always permissible because processors are exempt
  3. The bonus is permissible if paid in cash
  4. The bonus is permissible if the processor works part-time

Explanation

Paying unlicensed staff based on loan volume can blur the line between clerical support and unlicensed origination, and may raise fee-splitting concerns under RSA 399-A. The regulator looks at the substance of the activities performed. Part-time status or payment method does not resolve the issue.

Question 50New Hampshire state-specific mortgage lending laws and regulations

A New Hampshire mortgage servicer discovers an error in a borrower's escrow account. Under state servicing expectations, the servicer should:

  1. Wait until the next annual escrow statement
  2. Require the borrower to file a lawsuit to obtain correction
  3. Apply the overage to future fees without notice
  4. Correct the error, refund any overage, and provide notice to the borrower Correct answer.

Explanation

Servicers must promptly correct escrow errors, return excess amounts, and notify the borrower, consistent with servicing standards incorporated into New Hampshire requirements. Delay or self-help application of funds without notice is improper. Borrowers should not have to litigate to obtain correction.