Ethics Flashcards
Mortgage broker Dave knew that his customer worked at a factory that was two weeks away from closing, but in his eagerness to close the deal, he decided to ignore that fact. This might be considered an example of
actual fraud.
What is the primary purpose of the Fair and Accurate Credit Transactions Act?
protect consumers from identity theft
In compliance with the Fannie Mae Selling Guide, which statement is FALSE as it relates to the persons who must sign a security instrument?
Only persons who have an ownership interest in the security property and also have his/her income used in qualifying for the mortgage must sign.
Mortgage loan processor Lisa distributes a company business card with her name on it along with the unique identifier of the mortgage lender she works for. Lisa hand writes a message on the card that states, “I can help you get a loan.” Lisa is
committing a prohibited act of misrepresentation in advertising which is a violation.
Alexa’s loan applicant calls her late in the evening before the closing, informing her he is being laid off the following Monday. All the loan papers are at the title company and the Closing Disclosure is approved. The buyer still wants the home. Alexa decides to let the loan close. What type of fraud is this?
material omission
To provide a revised Loan Estimate that can be used in determining good faith, a changed circumstance can be any of the following EXCEPT
the MLO neglected to inform the borrower and include the additional cost necessitated by a review appraisal.
For conventional lending, MLO Mandy can tell applicant Aiden that a gift can be provided by any of the following EXCEPT a(n)
real estate salesperson affiliated with the transaction.
If expired mortgage loan files for borrowers are disposed of in a dumpster at the back of the company’s office, the company has violated the consumer-protection requirements set forth by
FACTA.
A consumer reporting agency (CRA) must disclose to the consumer the recipients of a consumer’s credit report which it has furnished for a purpose other than for employment within the _____-month period preceding the request.
6
The Fannie Mae Selling Guide sets forth requirements for the use of a power of attorney (POA) in obtaining required signatures on a security instrument. Which of the following does NOT accurately reflect a requirement for the use of a POA in most circumstances involved with security instrument signatures?
A lender, who is not a relative of the borrower, may be used as the POA signer on a security instrument.
As set forth by the Telemarketing Sales Rule, when required advertising disclosures are oral, clear, and conspicuous means all of the following EXCEPT
Within a reasonable time frame
As mortgage broker Sam puts together an ad to attract some new customers, he should follow the requirements of what law to ensure his ad is not misleading or deceptive?
TILA
Mortgage broker Helen places an ad indicating a 5% interest rate for qualified applicants. Marshall meets the criteria to qualify at that rate, but Helen talks him into a less appropriate product, which results in a higher fee for her. This is an example of what sort of prohibited advertising tactic?
Bait and switch
MLO Brady failed to disclose a loan’s prepayment penalty to a consumer in a local publication. This BEST describes an example of
Misleading advertising
Mortgage companies need to establish internal policies that comply with the Telemarketing Sales Rule. Internal compliance policy can allow an MLO to call a consumer that makes an inquiry or submits an application to the company for up to ____ month(s) from the inquiry/application date.
3
Broker Tom advertises low interest rates and includes the accurate APR. However, when qualified applicants come in, Tom tells them that the smarter loan for them would be one with a slightly higher rate and more fees. If the loan does not offer more benefits than the one advertised, did Tom do anything wrong?
Yes, Tom could be accused of using a bait and switch tactic to earn more
Mortgage companies need to establish internal policies that comply with the Telemarketing Sales Rule. If a customer’s name is on the National Do Not Call Registry and that customer closes a loan with the company, the company must stop contacting the customer to solicit new business
After 18 months
A claim in any medium that gives the consumer an incorrect understanding of the service or product he is interested in obtaining BEST defines the term
Misleading advertising
The unlawful act of steering is
Channeling buyers to or away from certain neighborhoods based on their race or ethnic background
According to the Fair Housing Act, the Equal Housing Opportunity logo must be used in all advertising of
Residential real estate for sale, rent, or financing
The Fair Housing Act requires what to be posted in all institutions where mortgage loans are made?
Equal Housing Opportunity house logo
The Fair Housing Act requires the use of what slogan by creditors in all broadcast advertising?
Equal housing lender
When a lender’s advertisement offers a certain product, service, or loan, the product, service or loan must be made available
To a reasonable amount of qualified applicants
A for-profit MLO who claims to be a “counselor” in an ad about loan modification is in violation of what law?
Truth in Lending Act