CMA - Certified Mortgage Advisor Advisor Ethics and Communication Questions and Answers

Question 1

A client is struggling to meet the income requirements for a loan.
They tell their Certified Mortgage Advisor (CMA) that they plan to temporarily deposit a large sum of money from a personal loan into their bank account and have a relative sign a gift letter stating it does not need to be repaid.
What is the CMA's most ethical and legally sound response?

Accepted Answer

Advise the client that misrepresenting the source of funds constitutes mortgage fraud and refuse to proceed with the application in that manner.

Answer

Suggest the client wait until the funds have been 'seasoned' in their bank account for at least 60 days before applying.

Answer

Proceed with the application but make a private note in the file about the source of the funds for internal records only.

Answer

Provide the client with a standard gift letter template and advise them to have the relative sign it.

Question 2

The ethical framework for a Certified Mortgage Advisor is built on a primary commitment to act in the client's best interest, placing their needs above the advisor's own. This principle is best described as:

Accepted Answer

A fiduciary responsibility

Answer

A transactional duty

Answer

A profit-maximization objective

Answer

A regulatory compliance standard

Question 3

Which of the following marketing communication arrangements between a mortgage advisor and a real estate agent is MOST likely to violate RESPA Section 8?

Accepted Answer

The advisor paying the real estate agent a monthly fee to be featured as the 'exclusive preferred lender' on the agent's website.

Answer

Co-hosting an educational homebuyer seminar where costs are split proportionally based on each party's advertising space.

Answer

The advisor paying for a box of donuts for the agent's office after a successful closing.

Answer

The advisor sponsoring a hole at a charity golf tournament hosted by the real estate brokerage.

Question 4

A loan application is denied by underwriting due to the applicant's high debt-to-income ratio. When communicating this to the applicant, what is the most appropriate and ethical action for the Certified Mortgage Advisor to take?

Accepted Answer

Clearly explain the reason for the denial and inform them they will receive a formal Adverse Action Notice with specific details and their rights.

Answer

Avoid providing a specific reason to prevent a potential argument or confrontation.

Answer

Inform the applicant that the lender's decision is final and cannot be appealed.

Answer

Suggest the applicant immediately apply with a different lender who might have more lenient guidelines.

Question 5

A Certified Mortgage Advisor creates a social media post that prominently features the phrase "30-year fixed rates as low as 5.25%!" To comply with the Truth in Lending Act (TILA), what other information must the advertisement also clearly and conspicuously state?

Accepted Answer

The Annual Percentage Rate (APR) and other triggered loan terms.

Answer

The advisor's NMLS license number.

Answer

A disclaimer that rates are subject to change.

Answer

The name and address of the primary lender funding the loan.

Question 6

A CMA has presented a client with a loan option that meets their needs. The next day, the CMA's manager announces a temporary 'bonus' for originators who close a different loan product. This second product has a slightly higher interest rate and fees for the client but would be significantly more profitable for the CMA. The client would likely qualify for either loan. The CMA's ethical obligation is to:

Accepted Answer

Continue to recommend the original loan that better serves the client's financial interests.

Answer

Present the more profitable loan as a 'newly available premium option' to the client.

Answer

Present both options objectively but use sales techniques to steer the client toward the more profitable loan.

Answer

Ask the client if they are interested in other options without disclosing the personal financial incentive.