CMC Ethics and Professional Conduct 3

Question 1

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

Accepted Answer

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

Answer

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

Question 2

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

Accepted Answer

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

Answer

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

Question 3

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

Accepted Answer

Fair Housing Act (FHA)

Answer

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

Question 4

A CMC who also owns a title company must ethically:

Accepted Answer

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

Answer

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

Question 5

Predatory lending practices in mortgage consulting are best characterized as:

Accepted Answer

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

Answer

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

(CMC) Certified Mortgage Consultant Practice Test

(CMC) Certified Mortgage Consultant Practice Test

CMC Ethics and Professional Conduct 3