Free Mortgage Loan Originator Prep Questions and Answers

Question 1

Which of the following groups of persons is not protected by the Equal Credit Opportunity Act but is under the Fair Housing Act

Accepted Answer

Disability

Answer

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in credit transactions based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. The Fair Housing Act (FHA) prohibits discrimination in housing-related transactions, including lending, based on race, color, religion, national origin, sex, familial status, and disability. Therefore, disability is protected under the FHA but not explicitly listed as a protected class under ECOA.

Question 2

Which of the following groups of people is not protected by the Fair Housing Act but is by the Equal Credit Opportunity Act:

Accepted Answer

Age

Answer

The Fair Housing Act (FHA) protects against discrimination based on race, color, religion, sex, national origin, familial status, and disability. In contrast, the Equal Credit Opportunity Act (ECOA) extends protection to these groups and additionally includes age (provided the applicant has the capacity to contract), marital status, and receipt of public assistance income. Therefore, age is protected under ECOA but not under the FHA.

Question 3

Which of the following, if based on membership in a protected class, would be regarded as a violation of the Fair Housing Act:

Accepted Answer

All of the above

Answer

The Fair Housing Act prohibits discrimination in all housing-related transactions, including mortgage lending, when based on a protected characteristic. This explicitly includes refusing to make a loan, imposing different terms or conditions on a loan, and refusing to provide information about loans. All of these actions, if motivated by a borrower's membership in a protected class, constitute a violation of the Act.

Question 4

Which of the following sums up blockbusting violations the best:

Accepted Answer

Trying to get owners to sell their homes out of fear that the racial or ethnic composition of the neighborhood is changing and values are declining

Answer

Blockbusting is a discriminatory practice where real estate agents or other individuals induce homeowners to sell their properties by creating fear that the neighborhood's racial or ethnic composition is changing, which will supposedly lead to declining property values. This tactic aims to profit by buying homes at low prices and reselling them at higher prices, while destabilizing communities. It is a direct violation of the Fair Housing Act.

Question 5

Which of the following sums up the offense known as steering the best:

Accepted Answer

Directing buyers to non-integrated neighborhoods based on their ethnicity

Answer

Steering is a discriminatory practice where real estate agents or lenders guide prospective buyers or renters towards or away from certain neighborhoods based on their protected characteristics, such as ethnicity. This practice limits housing choices and perpetuates segregation, rather than allowing individuals to choose housing freely based on their preferences. It is a violation of the Fair Housing Act.

Mortgage Loan Originator Practice Test

Mortgage Loan Originator Practice Test

Free Mortgage Loan Originator Prep Questions and Answers