CMA Advisor Ethics and Communication 2

Question 1

A mortgage advisor discovers mid-process that a client's stated income on the application does not match tax documents provided. What is the advisor's ethical obligation?

Accepted Answer

Disclose the discrepancy to the lender and work with the client to correct the application

Answer

Proceed with the stated income to avoid delaying closing

Answer

Ignore it if the discrepancy is less than 10%

Answer

Ask the client to submit different tax documents that match

Question 2

Which communication practice best demonstrates an advisor's commitment to informed consent in the mortgage process?

Accepted Answer

Providing a Loan Estimate and explaining all fees before the client commits

Answer

Sending a summary email after closing

Answer

Verbally explaining terms at signing without written backup

Answer

Waiting until underwriting to disclose total closing costs

Question 3

A CMA advisor receives a referral fee from a title company for directing clients to their services. Under RESPA, this arrangement is:

Accepted Answer

Prohibited unless the title company provides an affiliated business disclosure

Answer

Permissible if disclosed to the client in writing

Answer

Always legal as a standard industry practice

Answer

Prohibited unless the fee is under $500

Question 4

When a client asks an advisor to recommend a loan product that maximizes the advisor's commission rather than fitting the client's needs, the ethical response is to:

Accepted Answer

Decline and recommend the product that best fits the client's financial situation

Answer

Comply since the client made the request themselves

Answer

Recommend the higher-commission product but disclose the commission

Answer

Transfer the client to another advisor

Question 5

An advisor is communicating with an elderly client who appears confused about the loan terms. The best ethical practice is to:

Accepted Answer

Slow down, use plain language, and confirm comprehension before proceeding

Answer

Have the client's adult child sign the documents instead

Answer

Proceed quickly to prevent the client from overthinking

Answer

Refer the client to online resources and schedule a follow-up later

Question 6

A mortgage advisor learns that a competitor is offering the same client better terms on a comparable loan. Ethical conduct requires the advisor to:

Accepted Answer

Inform the client they are free to compare offers and make their own decision

Answer

Discourage the client from shopping by emphasizing competitor risks

Answer

Offer a rate match regardless of whether it is financially viable

Answer

End the professional relationship immediately

Question 7

Which scenario represents a clear conflict of interest that a CMA advisor must disclose?

Accepted Answer

The advisor's spouse is a co-owner of the appraisal firm used on the transaction

Answer

The advisor works at a bank that offers mortgages

Answer

The advisor has previously worked with the real estate agent on another deal

Answer

The advisor charges an origination fee for their services