CMC Professional Ethics and Conduct 2

Question 1

A mortgage consultant discovers mid-process that a competing lender offers a significantly better rate for the client's situation. What is the ethical obligation?

Accepted Answer

Disclose the better option to the client and discuss alternatives

Answer

CMC ethics require placing client interests above personal or business interests, which includes disclosing material information like better available rates.

Question 2

Under RESPA, which of the following is strictly prohibited for a mortgage consultant?

Accepted Answer

Accepting a referral fee from a title company for steering clients

Answer

RESPA Section 8 prohibits kickbacks and unearned fees, including referral fees between settlement service providers.

Question 3

A client asks a CMC to help them state a higher income on the loan application to qualify for a larger mortgage. The consultant should:

Accepted Answer

Refuse and explain that income misrepresentation is mortgage fraud

Answer

Falsifying income on a mortgage application constitutes mortgage fraud, a federal crime that the consultant must refuse regardless of client pressure.

Question 4

When a CMC has a personal financial interest in a property a client is purchasing, what must occur?

Accepted Answer

Full disclosure of the conflict must be made to the client in writing

Answer

Material conflicts of interest must be disclosed in writing so clients can make informed decisions about representation.

Question 5

The Equal Credit Opportunity Act (ECOA) prohibits mortgage consultants from discriminating based on which of the following?

Accepted Answer

Marital status or national origin

Answer

ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

(CMC) Certified Mortgage Consultant Practice Test

(CMC) Certified Mortgage Consultant Practice Test

CMC Professional Ethics and Conduct 2