Practice Test GeeksCeMAP - Certificate in Mortgage Advice and Practice Practice Test
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Module I Flashcards

6 cards from real CEMAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Module I flashcards as text

  1. What is the role of the Prudential Regulation Authority (PRA) in regulating building societies?

    Answer: The PRA sets prudential standards for building societies including capital requirements, liquidity rules, and governance standards to ensure their financial soundness

    The PRA supervises building societies alongside banks, setting capital, liquidity, and governance requirements to ensure they can withstand financial stress.

  2. What are the key features of the UK's deposit protection scheme for mortgage borrowers who also hold savings?

    Answer: The FSCS protects eligible deposits up to £85,000 per person per authorised firm, which includes savings held with a mortgage lender

    The FSCS protects eligible deposits up to £85,000 per person per authorised firm — this includes savings accounts held with the same institution that provides the mortgage.

  3. What is a retail distribution review and how has it affected the mortgage advice market?

    Answer: The RDR reformed how financial advice is paid for and qualification requirements, influencing standards across financial services including mortgage advice

    While the RDR primarily targeted investment advice, its principles of transparency in charging and higher qualification standards have influenced the broader financial advice sector including mortgage advice.

  4. What is the significance of the Bank of England's stress testing for mortgage affordability?

    Answer: Stress tests assess whether borrowers can afford mortgage payments if interest rates rise significantly, protecting against future payment shock

    Stress testing ensures borrowers can afford repayments not just at the initial rate but at elevated rates, protecting the financial system from rate-rise defaults.

  5. What is demutualisation and why is it relevant to the mortgage market?

    Answer: It is the conversion of a mutual building society into a shareholder-owned company, which can change the organisation's priorities and product range

    Demutualisation converts a mutual building society into a company, changing its ownership from members to shareholders and potentially altering its approach to mortgage lending.

  6. What are the Conduct Rules under SM&CR and how do they apply to mortgage advisers?

    Answer: They are basic standards of behaviour applying to almost all employees of regulated firms, including honesty, due skill, and proper standards of market conduct

    The Conduct Rules are minimum standards of behaviour that apply to nearly all employees of regulated firms, including acting with integrity, due skill and care, and being open with regulators.