CMC Cheat Sheet 2026

The 30 highest-yield CMC facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which agency enforces most consumer financial protection laws? → CFPB
2. What is the purpose of the Real Estate Settlement Procedures Act (RESPA)? → To ensure transparency in mortgage settlement processes
3. What is a key skill in financial advising? → Active listening and empathy
4. What is the primary purpose of a property appraisal in a mortgage transaction? → To establish an objective estimate of the property's market value
5. What is the purpose of verifying assets during loan processing? → To confirm funds for closing and reserves
6. When underwriting a Debt Service Coverage Ratio (DSCR) loan for an investment property, what is the primary factor used for qualification? → The property's projected rental income compared to its debt obligations (PITI).
7. When applying adjustments in the sales comparison approach, which situation requires a POSITIVE (upward) adjustment to the comparable's sale price? → When the comparable is inferior to the subject property in a given feature
8. What is loan pre-approval based on? → Documented financial verification
9. Why is trust important in client relationships? → It builds strong, lasting client relationships
10. What is the primary purpose of the Truth in Lending Act (TILA)? → To provide transparency in credit terms and costs
11. What is a conditional loan approval? → Approval contingent on specific requirements
12. Why is regular communication essential with clients? → To build trust and ensure clarity
13. What is the purpose of anti-money laundering (AML) regulations? → To prevent illicit financial transactions and fraud
14. What does the Fair Credit Reporting Act (FCRA) regulate? → Use and accuracy of consumer credit reports
15. What document provides the borrower’s final loan terms and costs? → Closing Disclosure
16. Which organization publishes the Uniform Standards of Professional Appraisal Practice (USPAP)? → The Appraisal Foundation
17. What is the loan-to-value (LTV) ratio used for? → To assess the risk and required mortgage insurance
18. What is the main purpose of a fixed-rate mortgage? → To ensure a consistent interest rate and payment
19. Which document outlines the final terms and costs of a mortgage loan? → Closing Disclosure
20. Why is the Bank Secrecy Act important in lending compliance? → It mandates reporting of suspicious transactions
21. Which party typically orders the home appraisal? → Lender
22. How can advisors personalize financial recommendations? → By tailoring advice to client-specific goals and risk
23. What role does ethical behavior play in financial advising? → It enhances professional reputation and client trust
24. A CMC is preparing an advertisement for their services. To comply with ethical standards regarding advertising, the CMC must ensure the ad: → Provides accurate information and does not misrepresent their services or experience.
25. Which federal law established the framework for state licensing and certification of appraisers for federally related transactions? → Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
26. What is the benefit of conducting a client review meeting? → To evaluate goals and reinforce the relationship
27. What is the typical relationship between prevailing interest rates and the market value of Mortgage Servicing Rights (MSRs)? → They have a direct, positive correlation; as rates rise, MSR value increases.
28. What does mortgage underwriting involve? → Evaluating borrower and property risk before approval
29. What is mortgage insurance typically required for? → Mortgages with low down payments
30. What is the purpose of a credit report in underwriting? → To evaluate credit history and payment behavior