CMA Advisor Ethics and Communication 3

Question 1

Under the Fair Housing Act, a mortgage advisor may NOT lawfully consider which factor when evaluating a loan applicant?

Accepted Answer

National origin

Answer

The Fair Housing Act prohibits discrimination in mortgage lending based on national origin, among other protected classes.

Question 2

A client requests that their advisor keep certain financial details confidential from co-borrowers on the same loan. The advisor should:

Accepted Answer

Inform the client that all co-borrowers are entitled to the same material loan disclosures

Answer

All co-borrowers have equal legal rights to material loan information, and selective disclosure violates fair lending requirements.

Question 3

Which behavior by a mortgage advisor would most likely violate the duty of loyalty to a client?

Accepted Answer

Steering a client to a higher-rate product because it yields a larger yield spread premium

Answer

Steering clients to less favorable products for personal financial gain violates the duty of loyalty and anti-steering regulations.

Question 4

What is the primary purpose of the NMLS (Nationwide Multistate Licensing System) in relation to mortgage advisor ethics?

Accepted Answer

To provide a centralized registry ensuring advisors meet background, education, and conduct standards

Answer

NMLS maintains licensing records, background checks, and disciplinary history to uphold conduct standards across the mortgage industry.

Question 5

An advisor overhears a colleague making discriminatory comments about loan applicants from a specific ethnic group. Ethical conduct requires the advisor to:

Accepted Answer

Report the behavior to a supervisor or compliance officer

Answer

Ethical advisors have an obligation to report fair lending violations or discriminatory practices through proper compliance channels.

(CMA) Certified Mortgage Advisor Practice Test

(CMA) Certified Mortgage Advisor Practice Test

CMA Advisor Ethics and Communication 3