Practice Test Geeks(CMC) Certified Mortgage Consultant Practice Test
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Ethics and Professional Conduct Flashcards

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

Read the first 7 Ethics and Professional Conduct flashcards as text

  1. A CMC's license has lapsed but a client urgently needs to close on a purchase. The ethical course of action is to:

    Answer: Refer the client to a licensed colleague and immediately renew the license

    Operating without a valid license is illegal; the CMC must refer the client and prioritize license renewal immediately.

  2. When a CMC identifies a potential error in the loan estimate provided by the lender, the ethical duty is to:

    Answer: Immediately notify the client and lender so the error can be properly corrected

    Transparency requires the CMC to promptly disclose errors to all parties so corrections can be made before the client is harmed.

  3. Which federal law primarily governs fair lending by prohibiting discrimination in residential mortgage lending?

    Answer: Fair Housing Act (FHA)

    The Fair Housing Act prohibits discrimination in residential real estate transactions including mortgage lending based on protected classes.

  4. A CMC who also owns a title company must ethically:

    Answer: Disclose the affiliated business relationship in writing and allow the client to choose freely

    RESPA requires a written Affiliated Business Arrangement (AfBA) disclosure, and clients must be free to use alternative settlement service providers.

  5. Predatory lending practices in mortgage consulting are best characterized as:

    Answer: Imposing unfair or deceptive loan terms on vulnerable borrowers to generate excessive profit

    Predatory lending involves exploiting borrowers—often vulnerable populations—through deceptive practices, excessive fees, or unsuitable loan structures.

  6. A CMC discovers a clerical error in a previously submitted loan application that has already been approved. The CMC should:

    Answer: Notify the lender immediately to correct the record before closing

    Accuracy of submitted information is a legal and ethical obligation; errors must be reported and corrected regardless of approval status.

  7. Which of the following scenarios best illustrates 'dual agency' conflict of interest in mortgage consulting?

    Answer: Simultaneously representing the borrower and receiving undisclosed compensation from the lender

    Undisclosed compensation from a lender while representing a borrower creates an undisclosed dual interest that violates ethical and legal standards.