Ethics Flashcards
Advertising an attractive interest rate that a mortgage professional is not at liberty to offer is a major ethical offense and a violation of:
Regulation Z
It is unethical and illegal to use yield spread premiums YSP (commissions that mortgage brokers obtained rom lenders for originating a loan with a an interest rate higher than the par rate) for any reason other than:
To help a borrower pay for settlement costs
The Gramm-Leach-Bliley Act protects the privacy of nonpublic personal information using all of the following methods, except:
Requiring financial institutions, including mortgage companies, to obtain permission for the use and sharing of consumers’ nonpublic personal information
Property flipping occurs when:
A property is bought and resold within a very short period of time
A “straw buyer” is:
A buyer who accepts a fee for the use of his or her social security number and other personal information on a mortgage application.
For a fee, a real estate licensee offers a mortgage company the names and telephone numbers of ll of the people who attended an open house, but the mortgage company does not accept the offer. Who is in violation of RESPA?
The real estate licensee
A title company advertises in a real estate company’s publication by paying the required fees. Who is in violation of RESPA?
Neither the real estate company nor the title company.
A real estate company accepted flyers from a mortgage company and made them available to prospective buyers during an open house. Who has violated RESPA?
Neither
Which of the following compensation practices is allowed under the Loan Originator Compensation Rule?
Paying all originators a 3% commission for every loan originated, regardless of the loan amount or the terms and conditions of the loan
Which of the following transactions would be exempt from the ATR Rule?
An open-end HELOC
Which of the following requires mortgage professionals to implement and maintain security protocols to ensure the confidentiality of consumer information?
The Safeguards Rule
Which of the following mortgage broker policies would violate fair lending laws?
Refusing to originate loans in ZIP codes known to be economically depressed
Basing a loan approval on only the appraised value of a borrower’s collateral and failing to consider repayment ability constitutes which of the following ethical violations?
Equity-based lending
It is permissible for loan processors to:
Contact loan applicants in order to obtain information needed to process a loan.
Advertising an attractive interest rate that a mortgage professional is not at liberty to offer is a major ethical offense and a violation of:
Regulation Z
In states with an agency requirement, which of the following practices could violate a mortgage broker’s duty to serve as a borrower’s fiduciary?
Failing to submit an FHA loan application at the borrower’s request
A mortgage broker is required to provide an opt-out notice in which of the following cases?
The mortgage broker shares nonpublic personal information with non-affiliated third parties
If a mortgage broker were to take on the role of a borrower’s agent, the mortgage professional is said to have:
A fiduciary duty
Which of the following describe an air loan?
A fictitious borrower obtains a mortgage and secures it with fictitious property
Which of the following statements offers the most accurate description of the effect of using a “trigger term” in an advertisement for a loan?
Use of a trigger term requires the clear and conspicuous disclosure of other relevant terms with equal prominence.
An advertisement that states “REfinance and we can save you up to $300 per month!” is:
Not a violation of TILA if it provides information on APRs and payments with equal prominence, as long as the statement is true
The obligation for mortgage brokers to serve as the agent or the fiduciary of borrowers is:
Imposed by state licensing laws in some states
This 2009 federal law was put in place to establish increased enforcement of anti-mortgage fraud laws.
The Fraud Enforcement and Recovery Act
