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

HMDA stands for the Home Mortgage Disclosure Act, which requires lenders to collect and report data on mortgage loan applications and originations.

Question 2

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

Accepted Answer

Occupation

Answer

Occupation is not a protected class under the Fair Housing Act; protected classes include race, color, national origin, religion, sex, familial status, and disability.

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

Redlining is the illegal discriminatory practice of denying or limiting financial services to people in specific geographic areas based on the racial or ethnic composition of those areas.

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 Equal Credit Opportunity Act (ECOA) prohibits discrimination in all credit transactions, including mortgage lending, based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

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

Steering is the illegal practice of directing borrowers toward less favorable loan products based on a protected characteristic, even when they qualify for better terms.

Loan Officer Exam Practice Test

Loan Officer Exam Practice Test

Loan Officer Exam Loan Officer Consumer Protection and Fair Lending