CRMP Ethics and Professional Conduct 2

Question 1

A CRMP counsels a borrower whose adult child is pressuring them to take out a reverse mortgage to fund the child's business. What is the ethical obligation?

Accepted Answer

Explore whether the decision is truly voluntary and in the borrower's best interest

Answer

Proceed if the borrower verbally agrees

Answer

Defer to the family member since they have financial expertise

Answer

Recommend the largest available loan amount to satisfy both parties

Question 2

Which practice would constitute a conflict of interest for a CRMP?

Accepted Answer

Receiving undisclosed referral fees from a title company recommended to borrowers

Answer

Referring borrowers to HUD-approved housing counselors

Answer

Disclosing all lender fees upfront in the Loan Estimate

Answer

Maintaining separate professional and personal finances

Question 3

A CRMP realizes after closing that they made an error in the loan disclosure that disadvantaged the borrower. What should they do?

Accepted Answer

Disclose the error and work to correct it through appropriate channels

Answer

Do nothing since the loan has already closed

Answer

Blame the title company to deflect responsibility

Answer

Only act if the borrower discovers the error independently

Question 4

Under NRMLA's Code of Ethics, how should a CRMP handle a situation where a competitor is making misleading claims about their own products?

Accepted Answer

Report the misconduct to NRMLA and appropriate regulatory bodies

Answer

Match the competitor's marketing to stay competitive

Answer

Ignore it as industry competition is expected

Answer

Directly confront the competitor's clients with the truth

Question 5

What does 'informed consent' require of a CRMP before a borrower signs reverse mortgage documents?

Accepted Answer

The borrower must understand the loan terms, risks, and alternatives in a language they comprehend

Answer

The borrower must sign a waiver acknowledging receipt of any document

Answer

The borrower's attorney must approve all documents

Answer

The borrower must complete a written test on reverse mortgages

Question 6

A CRMP is approached by a real estate agent offering a commission split for every reverse mortgage borrower referred. This arrangement is:

Accepted Answer

A potential RESPA violation and ethical breach if not properly structured

Answer

Permissible if both parties disclose it verbally

Answer

Standard practice in the mortgage industry

Answer

Only prohibited if the borrower is under age 70

Question 7

Which statement best reflects the ethical duty of competence for a CRMP?

Accepted Answer

Continuously update knowledge through education as products, regulations, and markets evolve

Answer

Complete the CRMP exam once and rely on that knowledge indefinitely

Answer

Delegate complex questions to underwriters without disclosing limitations to borrowers

Answer

Limit practice to loan types covered during initial certification only