Loan Officer Exam Loan Officer Consumer Protection and Fair Lending

Question 1

What does HMDA stand for in the context of mortgage lending?

Accepted Answer

Home Mortgage Disclosure Act

Answer

Housing and Mortgage Default Agreement

Answer

Home Market Data Authorization

Answer

Housing Mortgage Distribution Act

Question 2

Under the Fair Housing Act, which of the following is NOT a protected class?

Accepted Answer

Occupation

Answer

Race

Answer

National origin

Answer

Familial status

Question 3

What is 'redlining' in the context of fair lending?

Accepted Answer

The illegal practice of denying services to residents of certain areas based on race or ethnicity

Answer

Marking loan documents with corrections in red ink

Answer

A method for calculating mortgage interest

Answer

A type of adjustable-rate mortgage feature

Question 4

Which federal law prohibits discrimination in credit transactions, including mortgage loans, based on race, sex, national origin, and other factors?

Accepted Answer

The Equal Credit Opportunity Act (ECOA)

Answer

The Fair Housing Act

Answer

The Community Reinvestment Act (CRA)

Answer

The Truth in Lending Act (TILA)

Question 5

What is 'steering' as a fair lending violation?

Accepted Answer

Directing borrowers toward loan products less favorable than those they qualify for based on a protected characteristic

Answer

Helping borrowers select the best available mortgage product

Answer

Reviewing a borrower's credit report to determine eligibility

Answer

Assisting borrowers with the application process

Question 6

Under HMDA, which data point must lenders collect and report regarding loan applicants?

Accepted Answer

The applicant's race, ethnicity, and sex

Answer

The applicant's political affiliation

Answer

The applicant's religion

Answer

The applicant's employment history beyond 2 years