Ethical Issues

Each of the following would be considered a form of mortgage fraud for property, except: A.The borrower overstating assets necessary for a down payment or collateral for the loan B. Submission of a fraudulent gift letter C. Appraisal fraud C. Including sporadic bonuses in with regular income

The answer is: C. appraisal fraud. Fraud for property involves a borrower lying about income or assets in order to qualify for a loan to buy a home in which he or she plans to live, but which he or she might resell at a profit if income does not increase to enable continued repayment. Overstating assets, providing fraudulent income information, or submitting a fraudulent gift letter would be forms of fraud for property. Appraisal fraud would be a form of fraud for profit (NOT property), which involves mortgage and real estate professionals and others who conspire to inflate property values and, therefore, loan amounts.

Which of the following would not be covered by the GLB Act? A. Processor B. Loan broker C. Title company D. Appraiser

The answer is: D. Appraiser. The Gramm-Leach-Bliley Act requires financial institutions to give privacy notices to consumers, explaining their information-sharing policies. The GLB Act applies to financial institutions that offer financial products and services to individuals. Persons covered would include loan processors and loan brokers. Since title companies also handle consumers' personal information, such entities would be covered as well. Appraisers are not covered under the GLB Act.

Which of the following is true about the Do-Not-Call Implementation Act? A. A business entity may never call a number listed on the Do-Not-Call Registry B. The Do-Not-Call Registry only relates to telemarketers engaging in solicitation activities in the mortgage industry C. An established business relationship between a business entity and a consumer does not fall under the scope of the Do-Not-Call Implementation Act D. Once a phone number is listed on the Do-Not-Call Registry, it remains on the Registry until it is removed or service is discontinued

The answer is: D. Once a phone number is listed on the Do-Not-Call Registry, it remains on the Registry until it is removed or service is discontinued. As a result of the Do-Not-Call Implementation Act, a consumer may register his or her phone number on the national Do-Not Call Registry as a number that may not be called by telemarketers. Once registered, a phone number remains on the Registry until it is removed or service is discontinued. A company engaging in telemarketing activities may, however, call a number listed on the Registry if the company has an established business relationship with the consumer, unless the consumer specifically asks not to be contacted.