Practice Test Geeks(CMC) Certified Mortgage Consultant Practice Test
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Professional Ethics and 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 Professional Ethics and Conduct flashcards as text

  1. A CMC is also a part-owner of a title company that handles many of the transactions the consultant refers. This arrangement requires:

    Answer: RESPA-compliant affiliated business arrangement (AfBA) disclosure to clients

    RESPA requires written affiliated business arrangement disclosures when referring clients to businesses in which the consultant has an ownership interest.

  2. Which of the following scenarios best illustrates the ethical principle of 'fair dealing' in mortgage consulting?

    Answer: Presenting loan options honestly without omitting material disadvantages

    Fair dealing requires honest, complete presentation of loan options including drawbacks, enabling genuinely informed client decisions.

  3. An unlicensed assistant in a CMC's office begins negotiating loan terms directly with a borrower. This situation most directly violates:

    Answer: SAFE Act licensing requirements for mortgage loan originator activities

    The SAFE Act requires anyone who takes a loan application or negotiates loan terms to be licensed as a mortgage loan originator.

  4. A CMC advertises 'guaranteed lowest rates' without basis for the claim. This practice violates:

    Answer: FTC Act prohibitions on deceptive advertising and Regulation Z

    Unsubstantiated advertising claims violate the FTC Act's prohibition on deceptive practices and Regulation Z's mortgage advertising rules.

  5. A borrower with a language barrier does not fully understand the loan terms at closing. The ethical response for the CMC is to:

    Answer: Arrange for a qualified interpreter and postpone closing until comprehension is confirmed

    Informed consent requires that borrowers genuinely understand what they are signing; proceeding without comprehension undermines the client's right to informed decision-making.

  6. The CMC code of ethics generally requires members to report which of the following to their licensing authority?

    Answer: A felony conviction or disciplinary action in any jurisdiction

    Most state licensing laws and professional codes require prompt disclosure of criminal convictions or disciplinary actions to maintain license integrity.

  7. Predatory lending practices are most directly characterized by which of the following?

    Answer: Imposing excessive fees, unfair terms, or deceptive conditions that harm borrowers

    Predatory lending involves deceptive or abusive terms that exploit borrowers, including hidden fees, unnecessary products, and loan flipping.