CH 5: ETHICS, FRAUD, CONSUMER PROTECTION, AND FAIR LENDING

Question 1

While the law sets minimum standards of behavior, ethics is:

Answer 1

What is right

Question 2

Fraud for Profit often involves:

Answer 2

Multiple loans
Elaborate schemes
Collusion of industry professionals

Question 3

The Federal Fair Housing Act is enforced by:

Answer 3

HUD

Question 4

Refusing to lend within a designated area or restricting the number, size, and type of loan within a designated area is called:

Answer 4

Redlining

Question 5

Failure of a mortgage broker or lender to properly display the Equal Housing Opportunity or Equal Housing Lender poster could result in:

Answer 5

The shifting of the burden of proof in a discrimination claim to the broken or lender

Question 6

According to the HUD a scheme in which a recently acquired property is sold for a considerable profit with an artificially inflated value, often as the result of collusion with an appraiser, is known as:

Answer 6

Property flipping

Question 7

Under the Federal Fair Housing Act, the seven protected classes include:

Answer 7

National origin, color, religion, race, sex, familial status, handicap.

Question 8

The Federal Act (credit opportunity) that mandates that upon written request, applicants are entitled to a free copy of their property appraisal no later than three business days before closing is the:

Answer 8

Equal Credit Opportunity Act (ECOA)

Question 9

The Fair Credit Reporting Act provides that:

Answer 9

When credit is denied because of a report, the consumer will be notified and given the name of the consumer reporting agency
The consumer will be advised when an investigative consumer report is in process
Adverse information more than seven years old shall be removed from the report

Question 10

The Federal Act that requires financial institutions to demonstrate that their deposit facilities serve the needs of the communities in which they do business is the:

Answer 10

Community Reinvestment Act (CRA)