Professional Standards and Ethics Flashcards

After closing, a former client asks the TC for a copy of the other party's loan documents. What should the TC do?

Answer: Decline, as the other party's private documents are not the client's to receive

Confidentiality of another party's financial records continues after closing.

A TC discovers an agent on their team has been altering inspection reports. What is the most appropriate step?

Answer: Report the concern to the supervising broker and refuse to process altered documents

Escalating to the supervising broker addresses misconduct through the proper channel.

Which is a key purpose of continuing education for a TC?

Answer: To stay current on changing laws, forms, technology, and fraud risks

Ongoing education keeps TCs current on legal and procedural changes.

A lender offers the TC a gift card for each file sent their way. How should the TC respond?

Answer: Decline, as it could be a prohibited referral inducement under RESPA

Things of value given in exchange for referrals of settlement business can violate RESPA Section 8.

A TC keeps transaction files on a personal laptop without a password. What is the main ethical concern?

Answer: Failure to safeguard clients' confidential and personal information

Unprotected devices expose sensitive client data to breaches.

A buyer asks the TC if they should form an LLC to take title. What is the appropriate response?

Answer: Suggest they consult an attorney or tax advisor

Title vesting and entity choices involve legal and tax advice outside a TC's role.

Which statement best reflects a TC's professional standard of diligence?

Answer: Proactively track deadlines, verify document completeness, and escalate issues early

Diligence means proactive tracking and early escalation to protect the transaction.