Mortgage Ethics

Question 1

What are the two most common types of fraud?

Answer 1

Fraud for housing and fraud for profit

Question 2

TRUE OR FALSE. If mortgage payments are being made by an entity rather than a borrower, a strawbuyer may be being used.

Answer 2

True

Question 3

TRUE OR FALSE. The MARS or the Mortgage Assistant Relief Services Rule of 2010 is also known as (Regulation O)

Answer 3

True

Question 4

TRUE OR FALSE. In reverse mortgage fraud, perpetrators may manipulate senior citizens into obtaining a reverse mortgage loan with a promise of helping them do something amazing with their equity, yet they pocket the funds.

Answer 4

True

Question 5

TRUE OR FALSE. In the case of Dodd Frank, a substantial injury must include monetary damage.

Answer 5

False

Question 6

When the act causes harm or substantial injury that the consumer cannot avoid.

Answer 6

Unfair Act or Practice

Question 7

When the act materially interferes with the ability of the consumer to understand a term or condition of a consumer financial product or service.

Answer 7

Abusive Act or Practice

Question 8

When the lender does not deliver on their promises: misleading, omission of material information, bait & switch

Answer 8

Deceptive Act or Practice

Question 9

A scheme that occurs when a lender sneaks in paperwork at closing that provides credit insurance the borrower did not request.

Answer 9

Credit Insurance Packing

Question 10

3 tests to identify high cost loans, per HOEPA

Answer 10

APR, points and fees, prepayment penalties

Question 11

Is comparative evidence of Disparate Treatment overt discrimination or typically not intentional?

Answer 11

Not intentional

Question 12

What is occurring when a real estate agent or buyer persuades an owner to sell their property at a deflated amount, based on the notion that other houses in the neighborhood are being acquired by individuals from another race or class?

Answer 12

Blockbusting

Question 13

What is occurring when a facially neutral policy or practice is applied equally to all applicants, but the policy or practice adversely affects a protected group?

Answer 13

Disparate impact

Question 14

What is occurring when perpetrators rely on a common bond and exploit the trust and friendship that typically exists in the group of individuals to support the scheme?

Answer 14

Affinity fraud

Question 15

What is occurring when a vendor takes advantage of a consumer by charging high prices, either through fraudulent acts or because the consumer has no available alternative?

Answer 15

Price gouging