CMC Professional Ethics and Conduct 3

Question 1

A borrower from a protected class is quoted a higher interest rate than similarly qualified non-protected borrowers. This practice is known as:

Accepted Answer

Disparate pricing or pricing discrimination

Answer

Charging higher rates to borrowers based on protected class characteristics is pricing discrimination, prohibited under the Fair Housing Act and ECOA.

Question 2

Under the Gramm-Leach-Bliley Act, a mortgage consultant must provide clients with a privacy notice:

Accepted Answer

At the time of establishing the customer relationship

Answer

GLB requires financial institutions to provide an initial privacy notice at the time the customer relationship is established.

Question 3

A CMC who discovers a colleague has been submitting fraudulent loan applications should:

Accepted Answer

Report the conduct to appropriate authorities or supervisors per firm policy

Answer

Professional ethics and many state laws require reporting known fraudulent conduct to supervisors or appropriate regulatory bodies.

Question 4

The practice of steering borrowers who qualify for prime loans into subprime products to earn higher commissions is:

Accepted Answer

An ethical and potentially legal violation

Answer

Steering qualified borrowers into higher-cost products for personal gain violates ethical standards and fair lending laws.

Question 5

When a CMC provides a Loan Estimate, federal law requires it be delivered to the applicant within:

Accepted Answer

3 business days of receiving a completed application

Answer

TRID (TILA-RESPA Integrated Disclosure) requires the Loan Estimate to be delivered within 3 business days of receiving a completed loan application.

(CMC) Certified Mortgage Consultant Practice Test

(CMC) Certified Mortgage Consultant Practice Test

CMC Professional Ethics and Conduct 3