Mortgage Loan Origination - CompuCram - Ethics

Which act was passed to address the illegal practice of redlining? A.) Fair and Accurate Credit Transaction Act B.) Community Reinvestment Act C.) Financial Modernization Act D.) Homeowners Protection Act

B.) Community Reinvestment Act Among other things, the Community Reinvestment Act was intended to eliminate the practice of redlining by requiring lenders to make loans in the neighborhoods in which they do business.

Who investigates mortgage fraud in the United States? A.) Local Officials B.) FBI C.) Mortgage Bankers Association D.) HUD

B.) FBI The FBI investigates matters relating to fraud, theft, and embezzlement occurring within or against the national or international financial community.

The most common fraudulent action on the part of the appraiser is A.) Falsifying MLS data B.) Under Valuing Properties C.) Inflating Value D.) Stealing Appraiser Identities

C.) Inflating Value Inflating the value of the property is the most common fraudulent action on the part of the appraiser. The appraiser gives the MLO "what is needed" on the appraisal, without regard to the property's actual market value.

Mortgage broker Carrie was eager to finish up with a customer so that she could make her massage appointment. She was sure that the terms of the loan were right for the customer, but still, the customer felt pressured to sign papers without feeling as though he truly understood all of the terms. This might best be described as A.) Mortgage fraud B.) Constructive fraud C.) Negligence D.) Actual fraud

C.) Negligence ID: 17822

Cory is planning to purchase his first home, and his real estate agent said that he must use a specific lender or else face having his loan denied due to his shaky credit record. Is this a legal practice? A.) Yes, as long as the agent discloses her alliance with the lender. B.) Yes, only certain lenders will loan to higher risk borrowers. C.) No, it is a cam to steer a buyer to one lender with the notion that they are the only financing source. D.) Yes, since this is the only lender who will make the deal work.

C.) No, it is a cam to steer a byer to one lender with the notion that they are the only financing source. Unfortunately, in many mortgage fraud scams, the buyer is unsophisticated in seeking financing, and may have credit issues that make lending more challenging. The buyer may be told this is the only chance for a home purchase when, in fact, it is a scam. Buyers may choose any lender they want for a purchase transaction.

Which federal legislation prohibits kickbacks and referral fees? A.) ECOA B.) FCRA C.) RESPA D.) TILA

C.) RESPA The Real Estate Settlement Procedures Act (RESPA) specifically prohibits kickbacks, referral fees, and fee splitting.

Whose signature is forged in a deed scam? A.) Mortgage loan originator B.) Buyer C.) Seller D.) Trustee

C.) Seller In deed scams, the seller's signature on the deed is forged - meaning the real homeowner is unaware that the thief is fraudulently transferring the property. ID: 17983

Mortgage broker Gary works with his appraiser friend to get an inflated value on a house. He then recruits his cousin Bob, who has great credit, to apply for a mortgage on the property, even though Bob is moving to Belize and has no intention of paying off the loan. In this case, Bob could be considered a ________ buyer. A.) Mock B.) Colluded C.) Straw D.) Forged

C.) Straw ID: 17824

In a fraud for property scheme, it is likely that A.) A group of individuals is colluding to gain from the scheme B.) Illegal property flipping occurs C.) The borrower seeks ownership D.) The borrower doesn't intent to repay the loan

C.) The borrower seeks ownership ID: 17815

To address the problem of property flipping, appraisers must analyze the transfer history of a property for the previous A.) Eighteen Months B.) Three Months C.) Three years for the subject property: one year for the comparable properties D.) One year

C.) Three years for the subject property: one year for the comparable properties Appraisers are required to analyze the purchase contract, current listing, and recent prior sales for the past three years. As well, the URAR form asks for research of the subject's transfers from three years prior to the effective date of the appraisal.

Which of the following questions could NOT be construed as being discriminatory against a protected class when asked of a buyer? A.) Do you have children? B.) How many family members will be living with you? C.) What type of house are you looking for? D.) What church do you attend?

C.) What type of house are you looking for? Choices A, B, and C could be alleged to be discriminatory in that they might be used to single out individuals on the basis of familial status or religion, both of which are protected classes.

If an appraiser intentionally underestimates an appraisal value for the purpose of keeping the values in that area low, that appraisal would be violating which law? A.) Fair Housing Act B.) Equal Credit Opportunity Act C.) Fair Credit Reporting Act D.) TILA

A.) Fair Housing Act ID: 17812

Loans that take advantage of poorly informed consumers through excessively high fees, misrepresentation of loan terms, and frequent refinancing that does not benefit the borrower is A.) Predatory lending B.) Illegal underwriting C.) Ineffective lending D.) Mortgage Lending

A.) Predatory lending ID: 17821

Which of the following is NOT included as a protected class by the federal Fair Housing Act? A.) Handicap B.) Religion C.) National Origin D.) Sexual Orientation

D.) Sexual Orientation As of today, the federal Fair Housing Act does not prohibit discrimination in housing based on sexual orientation. Specific state and municipal laws may recognize this as a protected class.

If a lender refuses to lend in a specific area because it is inhabited by a protected class (e.g., racial minorities), the lender would be guilty of A.) Fraud B.) Redlining C.) Blockbusting D.) Steering

D.) Steering Redlining is when a lender refuses to lend because of where the property is located and not considering the borrower's credit worthiness.

A consumer calls to ask about a loan product. How does TILA require you to quote an interest rate to him? A.) TILA does not address the quoting of interest rate B.) The annual percentage rate only C.) The interest rate only D.) The APR as well as the interest rate

D.) The APR as well as the interest rate ID: 17798

If you ask your obviously pregnant female borrower how many children she intends to have, you will be in violation of A.) The Home Mortgage Disclosure Act B.) No federal law C.) The Civil Rights Act of 1866 D.) The ECOA

D.) The ECOA ID: 17814

If any triggering terms are used in an ad, all disclosures must be made EXCEPT A.) Amount or percentage of down payment B.) Terms of repayment C.) APR D.) Total of closing costs

D.) Total of closing costs When triggering terms are used in an ad, TILA requires the disclosure of amount of the down payment, terms of loan repayment, and annual percentage rate. The total closing costs are not required to be stated in the ad.

A for-profit MLO who claims to be a "counselor" in an ad about loan modification would be in violation of what law? A.) Fair and Accurate Credit Transaction Act B.) Fair Lending Act C.) Home Ownership and Equity Protection Act D.) Truth in Lending Act

D.) Truth in Lending Act ID: 17801

Inducing owners to sell homes by suggesting the neighborhood's ethnic or racial composition is changing, with the implication that property values will decline, is A.) flipping B.) redlining C.) counseling D.) blockbusting

D.) blockbusting Blockbusting, also known as panic selling, is prohibited under the federal Fair Housing Act.

Who is EXEMPT from complying with the Fair Housing Act? A.) mortgage brokers B.) lenders C.) appraisers D.) title companies

D.) title companies All institutions and persons who engage in the business of selling, brokering, appraising, or lending money on real property must comply with the Fair Housing Act. Title companies do no fall into this category.

Which is NOT a triggering term according to TILA, requiring additional disclosing in advertising? A.) "Pay only $800 per month" B.) "360 easy payments" C.) "$3,000 down" D.) "Terms to fit your budget"

D.) "Terms to fit your budget" Generic statements that do not state specific loan information are exempt from additional disclosing of referencing specific information concerning loan terms.

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 A.) Negligent misrepresentation. B.) Constrictive Fraud. C.) Good Business. D.) Actual Fraud.

D.) Actual Fraud. If Dave made the decision to ignore a critical fact, he could be accused of actual fraud.

Which is LEAST LIKLEY to be an indicator of predatory lending? A.) Charging excessive prepayment penalties B.) Increasing interest charges on late loan payments C.) Falsifying loan documents D.) Requiring mortgage insurance

D.) Requiring mortgage insurance Requiring mortgage insurance does not indicate predatory lending.

The Privacy Rule requires that financial institutions provide the consumer with a Consumer Privacy Policy A.) Before disclosing information to non-affiliated third parties. B.) Three days prior to closing C.) Each time the servicing is transferred D.) Within three days of applying for a loan

A.) Before disclosing information to non-affiliated third parties. According to the Gramm-Leach-Bliley Act, this policy is required to be provided before disclosing information to non-affiliated third parties. ID: 17921

The Privacy Rule is part of what federal act? A.) Gramm-Leach-Bliley Act B.) Truth in Lending Act C.) Housing and Economic Recovery Act of 2008 D.) Dodd-Frank Act

A.) Gramm-Leach-Bliley Act The Gramm-Leach-Bliley Act includes a provision known as the Privacy Rule.

What is another name for blockbusting, an illegal activity, according to the Fair Housing Act? A.) Panic Selling B.) Discrimination C.) Redlining D.) Steering

A.) Panic Selling Blockbusting is also known as panic selling. This is when a homeowner panics due to someone causing fear regarding changes in the neighborhood, which leads them to thinking they need to sell before the neighborhood "goes down."

Under Regulation Z, which advertisement would require full disclosure of credit terms? A.) "VA financing" B.) "Assume loan at 8% interest" C.) "Low down payment" D.) "Affordable rates available"

B.) "Assume loan at 8% interest" Regulation Z requires that once you state any type of credit terms in advertising, such as 8% interest, you must disclose all finance charges and total annual percentage rate (APR).

Under the Fair Housing Act, which activity is NOT deemed illegal? A.) Steering B.) Adverse Action C.) Redlining D.) Blockbusting

B.) Adverse Action Adverse action, such as denying a loan, is not illegal if the borrower is not credit-worthy.

ECOA requires that a mortgage loan originator inquires about a customer's marital status in a specific way. Which is the correct way to ask? A.) Are you married or single? B.) Are you married, unmarried, or separated? C.) Are you single, married or widowed? D.) What is your marital status?

B.) Are you married, unmarried, or separated? Married, unmarried, or separated is the only correct way to ask the marital status. Be sure to include all three not just one or two of these words.

In a real estate ad for mortgage financing, which statement is permissible if no other information is given? A.) "Two thousand dollars down" B.) "Interest rate only 9%" C.) "Liberal terms available to qualified buyer" D.) "Monthly payment only $400!"

C.) "Liberal terms available to qualified buyer" ID: 17816

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 A.) Constructive fraud B.) Good Business C.) Actual Fraud D.) Negligent misrepresentation

C.) Actual Fraud ID: 17823

Misrepresentation or concealment of material facts due to negligence is A.) Steering B.) Collusion C.) Fraud D.) Flipping

C.) Fraud ID: 17875

In a real estate ad for mortgage financing, which statement is permissible if no other information is given? A.) "Monthly payment only $400!" B.) "Two thousand dollars down." C.) "Interest rate only 9%" D.) "Liberal terms available to qualified buyer."

D.) "Liberal terms available to qualified buyer." The Truth in Lending Act requires that advertising with certain triggers about the loan terms include more complete information about the loan. A generic statement would not trigger the need for additional disclosure.

ABC Bank charges unreasonable prepayment penalties to A.) Discourage payoff of highly profitable loans B.) Penalize borrowers who make payments prior to the monthly due date C.) Discourage consumers with poor credit from applying for a mortgage loan D.) Ensure that borrowers pay off their loans early

A.) Discourage payoff of highly profitable loans ID: 17802

MLO Sarah knows that the primary source of income for the customer sitting across from her is public assistance, so she tells him to not waste his time applying. Sarah has violated what law? A.) ECOA: Equal Credit Opportunity Act B.) TILA: Truth in Lending Act C.) HMDA: Home Mortgage Disclosure Act D.) CRA: Community Reinvestment Act

A.) ECOA: Equal Credit Opportunity Act Under the Equal Credit Opportunity Act, a borrower whose source of income if public assistance is entitled to undergo the same loan process as anyone else.

Scott, a mortgage broker, told Anna that she would get a better interest rate if they push her loan through as a purchase instead of as a refinance. To make this deal work, Anna must A.) Provide bogus documents such as a purchase contract and quitclaim. B.) Be a co-conspirator in a deed scam. C.) Sell the house, then immediately buy it back D.) Use another person's identity for the loan

A.) Provide bogus documents such as a purchase contract and quitclaim. This deal requires bogus documents such as a purchase contract, perhaps a recent quitclaim to a relative to make that person the seller, and may include seller concessions built into the contract. ID: 17973

Which is LEAST LIKELY to be an example of illegal flipping? A.) Purchasing and remodeling a house and selling it for quick profit B.) A group of sellers and buyers changing ownership of one property among them C.) A series of sales and quick resales D.) An inflated appraisal

A.) Purchasing and remodeling a house and selling it for quick profit Purchasing and remodeling a house and then selling it for a quick profit is the good side of flipping, which is perfectly legal. The illegal side of flipping is when colluding parties profit from the sale of property with an inflated appraisal that supports a loan. It may involve a series of sales and quick resales, with one property and a group of sellers and buyers changing ownership among them.

Which of the following would NOT be a condition of illegal property flipping? A.) Remodeling a property in poor condition, then selling it at market value B.) Repairing a low-priced home located near higher-priced homes, then selling it at a price similar to the nearby properties C.) Buying a distressed property, making exterior-only repairs, then selling it for a significantly higher price D.) Using a national bank without branches in the area to provide a loan and related services for the transactions

A.) Remodeling a property in poor condition, then selling it at market value When an investor buys a property below market value, fixes it up, and sells it at market value, it is completely legal. It also serves public interests by improving the neighborhood and increasing property values.

Jane completed an application for a home loan at XYZ Mortgage Company. She provided them with bank statements, pay stubs, tax returns, and a current mortgage statement. XYZ also pulled her credit report. According to the Gramm-Leach-Bliley Act, which is MOST LIKLEY to be public information? A.) Sales price of her current house B.) Credit score C.) Gross taxable income D.) Savings account number

A.) Sales price of her current house Of these choices, the price that Jane paid for her current home is the information most likely to be public, if you assume that her mortgage was recorded in the public records. Even so, her credit score, taxable income, and savings account number are certainly private and should be protected.

The late payment charged, or method of computation used for a late payment charge, is required to be disclosed under A.) TILA: Truth In Lending Act B.) FCRA: Fair Credit Reporting Act C.) ECOA: Equal Credit Opportunity Act D.) HMDA: Home Mortgage Disclosure Act

A.) TILA: Truth In Lending Act A late payment fee is a true cost of credit and, therefore, must be disclosed to the consumer under the Truth in Lending Act.

In a fraud for property scheme, it is likely that A.) The borrower seeks ownership B.) Illegal property flipping occurs C.) A group of individuals Is colluding to gain from the scheme D.) The borrower doesn't intend to repay the loan

A.) The borrower seeks ownership In fraud for property, it is likely that the only perpetrator is the borrower who seeks housing and/or cash from the loan. In addition, this fraud involves a single loan in which the borrower intends to repay.

A for-profit MLO who claims to be a "counselor" in an ad about loan modification would be in violation of what law? A.) Truth in Lending Act B.) Fair and Accurate Credit Transaction Act C.) Fair Lending Act D.) Home Ownership and Equity Protection

A.) Truth in Lending Act The Truth in Lending Act addresses advertising by creditors, including mortgage loan originators.

If an appraiser intentionally underestimates an appraisal value for the purpose of keeping the values in that area low, that appraisal would be violating which law? A.) TILA B.) Fair Housing Act C.) Fair Credit Reporting Act D.) Equal Credit Opportunity Act

B.) Fair Housing Act Fair Housing Act requires an appraiser to evaluate an appraisal based upon a fair assessment. Intentionally underestimating a property value falsely deflates the values of the community.

What does Fannie Mae call the process of purchasing existing properties with the intention of immediately reselling the property for a profit? A.) Straw Buying B.) Flipping C.) Refinancing D.) Assuming a Mortgage

B.) Flipping Fannie Mae considers this activity flipping. This can be legal or illegal depending on how it is done.

What federal legislation specifically addresses the sharing of non-public information between financial institutions? A.) TILA: Truth In Lending Act B.) Gramm-Leach-Bliley Act C.) Fair Credit Reporting Act D.) ECOA: Equal Credit Opportunity Act

B.) Gramm-Leach-Bliley Act The Gramm-Leach-Bliley Act sets specific guidelines for the sharing of confidential non-public information between financial institutions.

According to the Interagency Statement on Subprime Mortgage Lending, inducing a borrower to repeatedly refinance a loan in order to charge high points and fees each time is an example of predatory lending. This practice is commonly known as A.) Steering B.) Loan Flipping C.) Blockbusting D.) Redlining

B.) Loan Flipping

When an appraiser "gives a mortgage loan originator what's needed" on the appraisal report, the consumer usually ends up A.) Refinancing the property B.) Paying more discount points at closing C.) Not being able to sell the property D.) Borrowing too much on the property

B.) Paying more discount points at closing The cooperation between the appraiser and the loan originator in "giving what's needed" on the appraisal report leads to the consumer borrowing too much, resulting in an upside-down loan. resulting in an upside-down loan.

Which is an example of steering? A.) Seller Oscar tells his listing agent to find only Caucasian buyer prospects B.) Property manager Amy suggests Jake would be happier in a more diverse building C.) Agent Tom tells homeowners that their property values will drop when a Puerto Rican family moves in. D.) Mortgage banker Brad refuses to make loans for a particular inner city neighborhood

B.) Property manager Amy suggests Jake would be happier in a more diverse building Steering relates to buyers or renters and is defined as channeling prospective buyers or renters to or away from specific neighborhoods.

A lender who refuses to make loans on property in certain neighborhoods is demonstrating the discriminatory practice of A.) Blockbusting B.) Redlining C.) Servicing D.) Steering

B.) Redlining ID: 17800

Jane completed an application for a home loan at XYZ Mortgage Company. She provided them with bank statements, pay stubs, tax returns, and a current mortgage statement. XYZ also pulled her credit report. According to the Gramm-Leach-Bliley Act, which is MOST LIKLEY to be public information? A.) Gross taxable income B.) Sales price of her current house C.) Savings account number D.) Credit score

B.) Sales price of her current house ID: 17819

Channeling prospective buyers or tenants to a particular neighborhood based on race, religion, or national origin is an illegal practice known as A.) Counseling. B.) Steering. C.) Blockbusting. D.) Redlining.

B.) Steering. Steering is an illegal practice that may never be done in order to maintain or change the character of neighborhoods.

What information would be EXEMPT from the privacy requirement of the Gramm-Leach-Bliley Act? A.) Income information a consumer includes in a credit application B.) The loan amount that appears on a recorded mortgage C.) A consumer's credit score a loan originator gets from the credit bureau D.) A bank customer's account balance

B.) The loan amount that appears on a recorded mortgage Information that the company believes to be lawfully public - such as mortgage loan information in a jurisdiction where that information is publicly recorded - is not restricted by the Gramm-Leach-Bliley Act.

If any triggering terms are used in an ad, all disclosures must be made EXCEPT A.) Amount of percentage of down payment B.) Total of closing costs C.) Terms of repayment D.) APR

B.) Total of closing costs ID: 17813

Frank intentionally withheld information that would disqualify him from obtaining a loan. Frank has committed mortgage fraud as a result of A.) misrepresentation B.) omission C.) collusion D.) conspiracy

B.) omission Omission is when someone intentionally omits or withholds important information that would disqualify him or her from obtaining a loan.

Loans that take advantage of poorly informed consumers through excessively high fees, misrepresentation of loan terms, and frequent refinancing that does not benefit the borrower is A.) illegal underwriting. B.) predatory lending. C.) mortgage lending. D.) ineffective lending.

B.) predatory lending. Predatory lending involves loans that take advantage of ill-informed consumers through excessively high fees, misrepresented loan terms, frequent refinancing that does not benefit the borrower, and other prohibited acts.

Seller Frank knows that he has an outstanding lien on his property, so he pays one of the parties to the transaction to ignore it. Who did Frank most likely involve in his mortgage fraud scheme? A.) buyer B.) title company C.) appraiser D.) real estate agent

B.) title company If the title company intentionally leaves the lien off the title report, the other parties to the transaction may have no knowledge about it and, therefore, be innocent of any attempted fraud.

George, a creative mortgage broker, devised fictional borrowers and properties, and then set up custodial accounts for escrow payments. He even went as far as to create an office setting with others posing as an employer and an appraiser to give the appearance of a legitimate business. George is committing a mortgage fraud scam known as A.) Flipping B.) Identity Theft C.) An Air Loan D.) A Silent Second

C.) An Air Loan Air loans scams involve non-existent loans and no collateral loans. Often, a broker creates fictional borrowers and properties, opens accounts for payments, and maintains custodial accounts for escrow payments. A bank of telephones in an office may even be set up, with one phone line used for the employer, one for the appraiser, etc. for verification purposes.

Inducing owners to sell homes by suggesting the neighborhood's ethnic or racial composition is changing, with the implication that property values will decline, is A.) Counseling B.) Redlining C.) Blockbusting D.) Flipping

C.) Blockbusting ID: 17817

A prospective buyer can protect against mortgage fraud for a higher-than-market appraisal by A.) Asking neighbors for the sales price of their homes B.) Consulting with the appraiser on how she determined she subject property value C.) Checking the county auditor records for comparable sales information D.) Reviewing MLS listings with a prominent local real estate agent

C.) Checking the county auditor records for comparable sales information An effective way to be protected from an inflated appraisal scheme is to compare the subject property's assessed value to comparable properties' assessed values. The county auditor is a reliable source for obtaining this information.

MLO Sarah knows that the primary source of income for the customer sitting across from her is public assistance, so she tells him to not waste his time applying. Sarah has violated what law? A.) CRA B.) TILA C.) ECOA D.) HDMA

C.) ECOA ID: 17820

Which of these federal regulations specifically prohibits discrimination in lending? A.) FCRA: Fair Credit Reporting Act B.) RESPA: Real Estate Settlement Procedures Act C.) ECOA: Equal Credit Opportunity Act D.) HOEPA: Home Ownership and Equity Protection Act

C.) ECOA: Equal Credit Opportunity Act The Equal Credit Opportunity Act (ECOA) is a federal law that ensures that all consumers are given an equal chance to obtain credit.

What law prohibits discrimination in the sale and rental of a residential property on the basis of race, color, religion, handicap, sex, familial status or national origin? A.) Home Owners Equity Protection Act B.) Equal Credit Opportunity Act C.) Fair Housing Act D.) Community Reinvestment Act

C.) Fair Housing Act The Fair Housing Act prohibits discrimination against renting and selling property.

Misrepresentation or concealment of material facts due to negligence is A.) Collusion B.) Steering C.) Fraud D.) Flipping

C.) Fraud Fraud is intentional or negligent misrepresentation or concealment of material facts. Fraud also includes actively concealing information and making false or misleading statements.

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. Did Tom do anything wrong? A.) Yes, Tom violated UDAP laws by making false statements in advertising. B.) No, he was simply finding the best product for his customer. C.) Yes, Tom could be accused of using a bait and switch tactic to earn more. D.) No, he included the accurate APR as required by the Truth in Lending Act.

C.) Yes, Tom could be accused of using a bait and switch tactic to earn more. While Tom did include the real APR in the ad, he most likely used that low rate to lure people in, then convinced them to accept different terms, which earned him more commission. This is an example of an illegal bait and switch tactic.

What word best describes a group of participants working together to commit single acts of mortgage fraud? A.) omission B.) discernment C.) collusion D.) representation

C.) collusion Collusion is when a group of participants for example, appraisers, title companies, real estate agents, mortgage brokers or lenders, or even lawyers all work together to commit single acts of fraud.

At closing, buyer Steve sees that the lender changed the terms of the loan that they had agreed to, but he felt he had no choice but to go ahead with the loan or lose the chance to buy the house. This could be an example of A.) affinity marketing. B.) loan flipping. C.) predatory lending. D.) negative amortization.

C.) predatory lending. This could be an example of predatory lending.

A consumer calls to ask about a loan product. How does TILA require you to quote an interest rate to him? A.) the interest rate only B.) the annual percentage rate only C.) the APR as well as the interest rate D.) TILA does not address the quoting of interest rate

C.) the APR as well as the interest rate The Truth in Lending Act requires that the APR be quoted along with the interest rate.

Which is NOT a requirement of the Safeguards Rule of the Gramm-Leach-Bliley Act? A.) Ensure the security and confidentiality of customer records B.) Protect against the unauthorized access or use of consumer information in ways that could result in substantial harm o inconvenience to customers C.) Protect against any anticipated threats or hazards to the security of consumer records D.) Allow consumers to add their phone numbers to a list that prohibits unauthorized calls

D.) Allow consumers to add their phone numbers to a list that prohibits unauthorized calls The Gramm-Leach-Bliley Act requires financial institutions to maintain safeguards to protect customer information, but that does not include maintaining a do not call list.

The Privacy Rule requires that financial institutions provide the consumer with a Consumer Privacy Policy disclosure A.) Each time the policy is revised B.) Each time the servicing is transferred C.) At closing only D.) Annually as long as the relationship continues

D.) Annually as long as the relationship continues According to the Gramm-Leach-Bliley Act, this disclosure is required to be provided annually as long as the relationship continues.

Real estate agent Ike tells mortgage broker Tina that he will send her all of his clients if she'll give him $100 for each loan she closes. Although Tina turns him down, she does decide to send Ike tickets to a football game to thank him for referring his clients any way and he accepted them. According to Section 8 of RESPA, A.) Only Ike is in violation since he initiated a kickback scheme B.) Only Tina is in violation because she sent a gift C.) Neither are in violation D.) Both are in violation since any gratuity could be considered a kickback

D.) Both are in violation since any gratuity could be considered a kickback RESPA considers anyone who initiated, paid, or accepted a kickback to be in violation.

What federal legislation requires that all printed advertising include the Equal Housing Opportunity logo? A.) Equal Credit Opportunity Act B.) Truth In Lending Act C.) Fair Credit Reporting Act D.) Fair Housing Act

D.) Fair Housing Act The Fair Housing Act requires that the Equal Housing Opportunity logo be displayed in all printed material and the term "equal housing lender" must be used when broadcast over the airwaves.

What federal legislation requires the term "equal housing lender" to be used in any advertisement that is broadcast over the airwaves? A.) Truth in Lending Act B.) Equal Credit Opportunity Act C.) Fair Credit Reporting Act D.) Fair Housing Act

D.) Fair Housing Act The Fair Housing Act requires the use of the phrase "equal housing lender" in all broadcast advertising and the use of the Equal Housing Opportunity logo in all print ads.

William changes his W-2 in an effort to win approval for his loan application to buy a new condo. What is this considered? A.) Fraud for principle B.) Fraud for profit C.) Fraud for a friend D.) Fraud for property

D.) Fraud for property ID: 17874

What does NOT fall under the jurisdiction of Title VIII of the Civil Rights Act? A.) New Construction B.) Purchase of existing housing C.) Rental Housing D.) Installment loan for a vehicle

D.) Installment loan for a vehicle The Fair Housing Act, Title VIII of the Civil Rights Act, governs all forms of housing, but not any type of personal property.

What type of scam entails homeowners who are encouraged to refinance their property over and over until little or no equity remains? A.) Extreme lending B.) Reverse equity C.) Property skimming D.) Loan flipping

D.) Loan flipping In a loan flipping scam a type of equity skimming homeowners are encouraged to keep refinancing their property. Each time they refinance, they are charged points and closing costs, along with other fees. And each time, the equity gets smaller.

During a telephone application, David states he has 10% down to work with to buy a home in the mountains. He may use it occasionally as he loves to ski, but plans to use it for weekly rentals when he is not there. The MLO can only offer 75% LTV for a rental property, but 90% for a vacation/second home. The MLO decides to call this property a second home on the application. What type of fraud is this? A.) Material omission B.) Fraud by deception C.) Fraud in inducement D.) Material Misstatement

D.) Material Misstatement Mark has made a material misstatement on behalf of David by stating that the home will be used for purposes other than as disclosed during the telephone application.

During a telephone application, David states he has 10% down to work with to buy a home in the mountains. He may use it occasionally as he loves to ski, but plans to use it for weekly rentals when he is not there. The MLO can only offer 75% LTV for a rental property, but 90% for a vacation/second home. The MLO decides to call this property a second home on the application. What type of fraud is this? A.) Material omission B.) Fraud in inducement C.) Fraud by deception D.) Material misstatement

D.) Material misstatement ID: 17873

Mortgage broker Carrie was eager to finish up with a customer so that she could make her massage appointment. She was sure that the terms of the loan were right for the customer, but still, the customer felt pressured to sign papers without feeling as though he truly understood all of the terms. This might best be described as A.) Actual fraud B.) Constructive fraud C.) Mortgage fraud D.) Negligence

D.) Negligence Negligence is breach of legal duty resulting from carelessness, recklessness, or incompetence. Carrie's actions, while not fraudulent, probably contribute to the public's distrust of the mortgage industry.

What type of loans is involved in the air loan scheme? A.) VA B.) Conventional C.) FHA D.) Non-Existent

D.) Non-Existent An air-loan scheme involves non-existent loans and no collateral loans; for example, as in a mortgage-fraud scheme in which a mortgage loan originator invents a property and a borrower in order to earn profits on completed loan transactions by defrauding lenders.

It is unlawful to discriminate in lending practices by refusing to grant a loan or altering the terms of a loan because of a borrower's A.) Residence, sex, national origin, or color B.) Race, color, neighborhood, or children C.) Job, handicap, religion, or sex D.) Race, color, sex, or national origin

D.) Race, color, sex, or national origin

Which is NOT an indicator of predatory lending? A.) Raising the interest rate if a payment is late B.) Changing loan terms at the closing C.) Requiring Credit Insurance D.) Requiring Mortgage Insurance

D.) Requiring Mortgage Insurance It's common to require mortgage insurance when the borrower makes less than a 20% down payment. The other examples could signal predatory lending.