CRU Ethical Standards & Professional Conduct 3

Question 1

What is the primary purpose of an underwriter maintaining a complete and accurate credit file?

Accepted Answer

To provide a defensible record of the credit decision

Answer

A thorough, accurate credit file documents the basis for the underwriting decision and protects the lender in repurchase demands, audits, or regulatory reviews.

Question 2

An underwriter is pressured to clear conditions on a file without receiving the actual documents. This situation represents a violation of which ethical principle?

Accepted Answer

Professional integrity and documentation standards

Answer

Clearing conditions without receiving required documents compromises professional integrity and exposes the institution to repurchase risk and fraud liability.

Question 3

How should a CRU-designated underwriter handle a conflict of interest when a close relative applies for a mortgage at their institution?

Accepted Answer

Recuse themselves and refer the file to another underwriter

Answer

When a personal relationship creates a conflict of interest, the underwriter must recuse themselves and transfer the file to an unrelated underwriter.

Question 4

Under the CRU code of ethics, which action best demonstrates a commitment to continuing professional development?

Accepted Answer

Staying current with industry guidelines, regulations, and best practices

Answer

Professional ethics require CRU designees to remain current with evolving guidelines, regulatory changes, and industry standards to serve borrowers and employers competently.

Question 5

A borrower's stated self-employment income is significantly higher than what is supported by bank statements. What ethical concern does this raise?

Accepted Answer

It may indicate income misrepresentation requiring further documentation

Answer

A significant discrepancy between stated income and bank statement deposits is a red flag for potential income fraud and requires additional documentation.

(CRU) Certified Residential Underwriter Practice Test

(CRU) Certified Residential Underwriter Practice Test

CRU Ethical Standards & Professional Conduct 3