CMC Client Relations and Financial Advisory 2

Question 1

A client with a 620 credit score asks about their loan options. What is the most appropriate first step for the mortgage consultant?

Accepted Answer

Review the client's full credit report to identify specific derogatory items

Answer

Decline to assist until the score improves to 680

Answer

Immediately recommend an FHA loan without further analysis

Answer

Refer the client to a credit repair company and end the meeting

Question 2

Which disclosure must a mortgage consultant provide to a client within three business days of receiving a loan application under RESPA?

Accepted Answer

Loan Estimate

Answer

Truth in Lending disclosure only

Answer

Closing Disclosure

Answer

Good Faith Estimate (pre-2015 form)

Question 3

A client is choosing between a 15-year and 30-year fixed-rate mortgage. Which factor most directly affects the total interest paid over the life of the loan?

Accepted Answer

Loan term length

Answer

Property tax rate

Answer

Homeowner's insurance premium

Answer

Title insurance cost

Question 4

When a client expresses concern about rising interest rates, which product should a consultant typically discuss to provide payment certainty?

Accepted Answer

Fixed-rate mortgage

Answer

Interest-only ARM

Answer

5/1 Adjustable-Rate Mortgage

Answer

Balloon loan

Question 5

A client's debt-to-income ratio is 47%. Most conventional loan programs require a maximum DTI of what percentage?

Accepted Answer

45%

Answer

36%

Answer

41%

Answer

50%

Question 6

Which ethical obligation requires a CMC to disclose all material facts about a loan product that could affect the client's decision?

Accepted Answer

Duty of full disclosure

Answer

Fiduciary duty of loyalty only

Answer

Suitability standard

Answer

Best execution rule

Question 7

A client asks why their Closing Disclosure shows higher fees than the Loan Estimate. Which category of fees is legally permitted to increase without limit?

Accepted Answer

Required third-party services where the consumer chose a provider not on the lender's list

Answer

Origination charges

Answer

Transfer taxes

Answer

Prepaid interest