Chapter 3: Ethics Fair Housing, and Respa

Question 1

1. Which of the following best describes ethics?
   A. Doing what is right because it is right.
   B. Doing what is legal.
   C. Doing what meets your personal needs best.
   D. Doing what is expeditious.

Answer 1

A. Doing what is right because it is right

Question 2

2. The relationship that ethics has to law is
   A. the law is preceded by ethics.
   B. what is ethical is legal.
   C. if an act is illegal, it is also unethical.
   D. ethics and the law set minimum standards of behavior.

Answer 2

D. Ethics and the law set minimum standards of behavior

Question 3

3. A broker who had a disabled employee widened the  restroom doorway to accommodate a wheelchair. This work complied with the
A. Fair Housing Amendment Act of 1988
B. Rumford Fair Housing Act
C. Executive Order 11063
D. Americans with Disabilities Act

Answer 3

D. Americans with Disabilities Act

Question 4

4. Which of the following would not be an unethical act?
   A. Having multiple offers on your own listing, including your own offer, and only telling the seller about your own offer.
   B. Taking the long route to show a home to someone so that you can show them the schools, parks, and other area amenities.
   C. Placing all of your listings immediately on the MLS, regardless of how “saleable” they are.
   D. Telling a licensee who calls about one of your listings that the property is sold, when it really isn’t because you think you have a buyer for it yourself.

Answer 4

C. Placing all of your listings immediately on the MLS, regardless of how “saleable” they are.

Question 5

5. Which of the following words is considered discriminatory in an ad?
   A. Married couple’s dream
   B. Near St. Bartholomew’s Catholic Church
   C. Single Christian woman preferred
   D. All of the above

Answer 5

D. All of the above

Question 6

6. A broker is canvassing a neighborhood for listings by  telling the occupants that minorities are moving in and prices will soon start to decline.  His actions are
A. illegal.
B. unethical.
C. blockbusting.
D. All of the above.

Answer 6

D. All of the Above

Question 7

7. A broker declined to show a home in a gated community to a young Hispanic family with four young
   children, even after the family had inquired about the home. The broker’s action would be proper if
   A. elderly people occupied 73 percent of the homes.
   B. the broker considered the home to be too small for the family.
   C. there were no other children in the development.
   D. the development was restricted by the Covenants, Conditions, and Restrictions to occupants fifty-five years of age or older.

Answer 7

D. the development was restricted by the Covenants, Conditions, and Restrictions to occupants fifty-five years of age or older.

Question 8

8. Which of the following is not a RESPA violation?
   A. A broker sharing advertising space on a pro rata basis with a lender, where they each pay their proportionate share of the cost.
   B. A home inspector who gives dinner certificates to several real estate licensees who use her services
   all the time.
   C. An insurance broker who buys theater tickets for a real estate licensee who sends her lots of business.
   D. None of the above.

Answer 8

A. A broker sharing advertising space on a pro rata basis with a lender, where they each pay their proportionate share of the cost.

Question 9

9. A lender hosts a continuing education program for real estate professionals. Which of the following is a RESPA violation?
   A. Have a representative present and promote the lender’s services.
   B. Defray the cost of the program tuition.
   C. Hand out promotional material about the lender’s services at the program.
   D. Provide complimentary food and beverages.

Answer 9

B. Defray the cost of the program tuition

Question 10

10. A mortgage broker provides a snack tray and sodas for a real estate licensee’s Open House. The mortgage
    broker does not appear at the Open House nor does he provide any marketing or promotional materials for the Open House. His actions are
    A. unethical.
    B. legal.
    C. very kind.
    D. a RESPA violation.

Answer 10

D. a RESPA violation

Question 11

1988 Fair Housing Amendments Act

Answer 11

Important piece of legislation that further extends protection against housing discrimination to families and handicapped persons.

Question 12

Americans with Disabilities Act

Answer 12

ADA Refers to the Americans with Disabilities Act. The ADA applies to equal access to employment, public services, public accommodations, public transportation, and telecommunications.

Question 13

Blockbusting

Answer 13

The illegal practice of trying to lower property values through the instigation of panic selling in a neighborhood.

Question 14

Civil Rights Act of 1866

Answer 14

The intent of the Civil Rights Act of 1866 was to provide equal treatment of former slaves, and states in part that all citizens of the United States “shall have the same right, in every State and Territory … to inherit, purchase, lease, sell, hold, and convey real and personal property … as is enjoyed by white citizens.” This act applied to race only and could be enforced by anyone who was discriminated against, without exception. Legal remedies included injunction, compensatory, and punitive damages.

Question 15

Civil Rights Act of 1870

Answer 15

The purpose of this act was to prevent later courts from nullifying the remedies granted in the 1866 Act. The actual legislation reads: “and be it further enacted that the act to protect all persons in the United States in their civil rights and furnish the means of their vindication, passed April nine, eighteen hundred and sixty-six, is hereby reenacted.”

Question 16

Civil Rights Act of 1964

Answer 16

The Civil Rights Act of 1964 made John Kennedy’s 1962 executive order a matter of law and is considered one of the first of the modern civil rights acts. Although not as comprehensive as later acts, it prohibited discrimination in all federally assisted programs.

Question 17

Civil Rights Act of 1968

Answer 17

The Civil Rights Act of 1968 prohibited discrimination in housing based on race, religion, color, and national origin. Sexual discrimination was added by Congress in 1974. The act prohibits the following:
• Discrimination by brokers toward clients and customers.
• Discrimination as to access to Multiple Listing Service (MLS).
• Steering is directing people of protected classes away from or toward particular areas.
• Redlining is the refusal by a lender to loan within certain areas.
• Refusal to show, rent, or sell through the false representation that a property is not available.
• Discriminatory sales or loan terms.
• Blockbusting is inducing panic selling in an area or neighborhood by representing that property values will decline or the crime rate will increase due to the entry of minority group members to the area.
• Retaliatory acts against persons making fair housing complaints and intimidation to discourage complaints.
• Discriminatory advertising, which is prohibited in all cases, even when it relates to activities that are exempt from the act.

Question 18

Diversity Training

Answer 18

A diversity training program, developed by the NAR, helps licensees understand the customs and cultures of other nationalities and how their diverse backgrounds affect their decision-making processes.

Question 19

Fair Employment and Housing Act

Answer 19

Also known as Rumford Act Prohibits discrimination in employment and housing. Is enforced by the Department of Fair Employment and Housing.

Question 20

Golden Rule

Answer 20

“do unto others as you would have them do unto you,” is the keystone of ethical behavior.

Question 21

RESPA of 1974

Answer 21

Who is covered by RESPA?
• Real estate brokers and salespersons.
• Mortgage bankers and mortgage brokers.
• Title and/or escrow companies and title agents.
• Home warranty companies.
• Hazard insurance agents.
• Appraisers.
• Home inspection and pest control inspectors. 

RESPA does not apply to:
• Moving companies.
• Gardeners.
• Painters.
• Decorating companies.
• Home improvement companies.

Question 22

REALTORS Code of Ethics

Answer 22

is based on the Golden Rule and by nature acts as an excellent guide to ethical behavior.

Question 23

Redlining

Answer 23

g is the refusal by a lender to loan within certain areas.

Question 24

Steering

Answer 24

is directing people of protected classes away from or toward particular areas.

Question 25

Testers

Answer 25

Although there was a flurry of initial activity, enforcement quickly became almost dormant; however, in 2003, under the Bush administration, HUD stepped up its enforcement activity considerably. By entering into a contract with an investigation firm in Arlington, Virginia, to conduct on-site reviews to monitor conformity, the department has nearly tripled its enforcement staff, which includes many ex-FBI agents who have actively taken on the role of testers as well as enforcers

Question 26

Thing of Value

Answer 26

RESPA prohibits a real estate broker or licensee from receiving a thing of value for referring business to a settlement service provider (SSP), such as a mortgage banker, mortgage broker, title company, or title agent.

Question 27

Unruh Act

Answer 27

prohibits discrimination in all business establishments. It applies to all real estate licensees as well as any person managing an apartment building or other business establishment. A person found guilty of violating this act may be fined for any personal damages plus $250.