CMPS Ethics and Client Counseling 2

Question 1

A mortgage planner discovers mid-process that a client's income documentation contains an inconsistency. What is the ethical obligation?

Accepted Answer

Inform the client and request corrected documentation

Answer

Proceed and hope underwriting misses it

Answer

Omit the inconsistent document from the file

Answer

Submit the file and let the lender decide

Question 2

Which concept best describes a mortgage planner's duty to act in the client's best financial interest rather than for personal gain?

Accepted Answer

Fiduciary duty

Answer

Confidentiality

Answer

Due diligence

Answer

Regulatory compliance

Question 3

A client asks their CMPS to recommend the mortgage product that pays the planner the highest commission. How should the planner respond?

Accepted Answer

Explain that recommendations are based on the client's best interests, not compensation

Answer

Recommend the highest-commission product as requested

Answer

Decline to discuss commission structures entirely

Answer

Refer the client to another planner

Question 4

What does 'informed consent' mean in the context of mortgage counseling?

Accepted Answer

The client understands the risks and terms before agreeing to proceed

Answer

The client signs all documents without question

Answer

The lender approves the loan application

Answer

The planner obtains a signed fee agreement

Question 5

A CMPS professional learns that a competing advisor made misleading statements to poach a mutual client. The ethical response is to:

Accepted Answer

Report the misconduct to the appropriate licensing authority

Answer

Retaliate with negative statements about the competitor

Answer

Match the misleading claims to retain the client

Answer

Ignore it as a normal business practice

Question 6

Which practice violates the ethical principle of transparency in mortgage planning?

Accepted Answer

Burying yield-spread premiums in closing documents without disclosure

Answer

Disclosing all fees before the client commits

Answer

Explaining prepayment penalties in plain language

Answer

Providing a loan comparison showing multiple options

Question 7

When a client's financial situation makes them ineligible for the loan they want, what is the ethical approach?

Accepted Answer

Honestly explain the situation and explore alternative options

Answer

Inflate income figures to qualify the client

Answer

Proceed and assume the lender will figure it out

Answer

Tell the client to find a different planner