Ethics

Question 1

Under RESPA referrer can only receive compensation only if

Answer 1

When provider is an associate as defined by RESPA

Question 2

What is an associate

Answer 2

Defined as a parent , spouse, or child in position to refer business.

Question 3

Redlining

Answer 3

Failing to lend to certain geographic areas or segments of population

Question 4

Reverse Redlining

Answer 4

Refers to someone targeting an under served group (taking advantage of them

Question 5

2 types of Fraud

Answer 5

1. Fraud for profit - think insider
2. Fraud for housing - think consumer

Question 6

Ethic

Answer 6

Refers to actions we take and decisions we make that reflect that system of beliefs

Question 7

Morality

Answer 7

System of beliefs or values which help us decide right and wrong

Question 8

Steering

Answer 8

Pushing a client into a transaction that makes more sense for your wallet then client long term interest

Question 9

Packing

Answer 9

Placing unrelated and unwanted insurance in the loan and causing the borrower to pay for it from proceeds

Question 10

Fraud

Answer 10

Intentional use of deceit that deprives someone of money ,property or legal right

Question 11

Where to report Fraud

Answer 11

-HUD Inspector General on Govt Loans
-FBI for all others

Question 12

SARS

Answer 12

Suspicious Activity Report a compiled report on mortgage fraud

Question 13

What action should an MLO take if during a refinance involving a mother and son the MLO gets the feeling the mother is hesitant about the refinance?
a.) Ignore the situation as it may be a family matter
b.) Pull the mother aside to discuss
c.) Refer the transaction to the AML (Anti Money Laundering) department
d.) Pull the son aside to discuss

Answer 13

A.
**Because they have the right to rescind

Question 14

A young couple is applying for a loan for a new home purchase. A portion of their down payment is a loan from a Grandparent for $25,000. The money was already given to them and placed in their account three months prior to the loan application. The loan payments won’t start for one year, how should the $25,000 be reported on the mortgage application?
A. Asset
B. A Liability
C. Gift of funds
D. Not reported at all

Answer 14

B.

Question 15

An MLO takes an application and becomes suspicious of the applicants Soc Sec. #; what should the MLO do?
(A) contact the police
(B) deny loan
(C) call soc sec admin and verify Soc Sec #
(D) wait to see if there is any more suspicious activity

Answer 15

D.

Question 16

MLO went on a vacation and had her LOA (Loan Originator assistant) meet with her client. When the MLO came back it was found that the LOA was signing documents as the MLO, turns out this practice was happening often and with MLO’s permission. What should be done immediately?
a.) Terminate the MLO
b.) Terminate LOA
c.) Report to authorities
d.) Terminate both

Answer 16

D.
when you terminate anyone you have to report to NMLS/State why terminated within 30 days as required under the SAFE Act

Question 17

Should an MLO notify their UW (Underwriter) if their client tells the MLO they are getting a
small pay cut?

Answer 17

Yes

Question 18

Max Penalty for committing fraud?

Answer 18

30 years and / or 1m fine

Question 19

Straw Buyer

Answer 19

Person who is used as a cover to hide true identity of the buyer

Question 20

Loan Flipping

Answer 20

Involves an appraiser and a group of people who buy and resell to each other at inflated prices and ultimately to another poor person

Question 21

Chunking

Answer 21

When 3rd party convinces a borrower to invest in a property with no money down and with 3rd party acting as agent and retains the loan proceeds, leaving the borrower with multiple loans that cant be repaid

Question 22

Air loan

Answer 22

A loan on a fake home that does not exist on the land

Question 23

Shot gunning

Answer 23

Doing multiple loans on the property with multiple lenders all at the same time.

Question 24

Usury

Answer 24

Charging a borrower a rate above the legally set rate

Question 25

How to report fraud

Answer 25

HUD inspector general on govt loans
FBI for all others