Nationwide Mortgage Licensing System (NMLS) Practice Exam

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Prepare for the Nationwide Mortgage Licensing System (NMLS) Exam. Utilize flashcards and multiple choice questions, each with hints and explanations. Ensure your success by getting thoroughly prepared!

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How many days does a lender have to send the Satisfaction of Mortgage letter once the loan balance is paid?

30 days
60 days
90 days
120 days

The correct answer is: 60 days

The correct answer is based on the regulations surrounding the processing of mortgage satisfactions after a loan has been fully paid. When a borrower pays off their mortgage, the lender is required to issue a Satisfaction of Mortgage letter, which acknowledges that the debt has been fully satisfied. This document is essential for clearing the borrower's title and allowing them to continue with their property ownership without any encumbrances. Under the law, lenders are typically mandated to provide this letter within a specific timeframe to ensure that borrowers are informed promptly of the fulfillment of their loan obligations. In many jurisdictions, this timeframe is set at 60 days. Failing to provide the letter within this period may result in penalties for the lender and can complicate the homeowner's property title. Thus, the 60-day requirement is designed to protect the rights of borrowers and facilitate the smooth functioning of property records. Understanding this timeframe is crucial for both lenders and borrowers, as it impacts the timeliness of property releases and the overall management of mortgage-related documentation.