CMC Ethics and Professional Conduct 2

Question 1

A CMC discovers that a competing mortgage consultant is steering clients toward high-cost loans. What is the ethical obligation?

Accepted Answer

Report the misconduct to the appropriate regulatory authority

Answer

Ignore it as it involves a competitor

Answer

Warn only personal clients about the competitor

Answer

Use it as a marketing advantage to gain clients

Question 2

Under RESPA, which of the following constitutes an illegal kickback in the mortgage industry?

Accepted Answer

Referring a client to a title company in exchange for a fee

Answer

Recommending a reputable home inspector for free

Answer

Providing client education materials from a lender

Answer

Disclosing all affiliated business arrangements in writing

Question 3

A client asks a CMC to help them qualify for a loan by slightly overstating their income. The ethical response is to:

Accepted Answer

Decline and explain the legal and ethical consequences of mortgage fraud

Answer

Comply if the overage is small and the client can afford the payment

Answer

Ask the lender to overlook minor discrepancies

Answer

Suggest the client use a different consultant who may accommodate the request

Question 4

Which ethical principle requires a CMC to recommend the loan product that best meets the client's needs rather than the one with the highest commission?

Accepted Answer

Fiduciary duty

Answer

Non-maleficence

Answer

Autonomy

Answer

Justice

Question 5

A CMC is offered tickets to a sporting event by a lender representative. At what threshold does CFPB guidance generally consider such gifts problematic?

Accepted Answer

Any gift regardless of value raises a conflict of interest concern

Answer

Only gifts exceeding $500 are problematic

Answer

Gifts under $100 are always acceptable

Answer

Entertainment is never subject to ethics rules

Question 6

Which of the following best describes the 'duty of confidentiality' for a CMC?

Accepted Answer

Keeping client information private unless required by law or with client consent

Answer

Sharing client data freely within the brokerage for marketing purposes

Answer

Disclosing financial details to family members of the borrower upon request

Answer

Publishing anonymized case studies without written client permission

Question 7

An applicant discloses they are pregnant. Under the Equal Credit Opportunity Act (ECOA), the CMC must:

Accepted Answer

Disregard this information entirely in the credit decision

Answer

Note it in the file as a potential risk factor for income continuity

Answer

Ask how long the applicant plans to continue working

Answer

Request a doctor's note confirming ability to work