Federal Regulations and Ethics Flashcards
6 cards from real Mortgage Loan Originator practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Federal Regulations and Ethics flashcards as text
The SAFE Act requires mortgage loan originators to be registered or licensed under which system?
Answer: NMLS
The SAFE Act established the Nationwide Multistate Licensing System (NMLS) as the centralized registry for MLO licensing and registration.
Under the SAFE Act, which of the following is a pre-licensure education requirement for a state-licensed MLO?
Answer: 20 hours including 3 hours of federal law, 3 hours of ethics, and 2 hours of nontraditional mortgage lending
The SAFE Act requires 20 hours of pre-licensure education covering federal law, ethics, nontraditional mortgage products, and electives before an MLO can obtain a state license.
The Equal Credit Opportunity Act (ECOA) prohibits discrimination in credit transactions based on all of the following EXCEPT:
Answer: Loan amount requested
ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, and receipt of public assistance income — not the loan amount itself.
What is 'steering' as defined under the Dodd-Frank Act's loan originator compensation rules?
Answer: Directing borrowers to loan products not in their interest to increase MLO compensation
Steering refers to directing consumers toward loan products that are not in their best interest primarily because doing so yields higher compensation for the loan originator.
Under the Fair Housing Act, which is an example of 'redlining'?
Answer: Denying mortgage credit to applicants in minority neighborhoods regardless of creditworthiness
Redlining is the illegal practice of denying services or increasing requirements in minority or low-income neighborhoods, regardless of individual applicants' qualifications.
What does HMDA require lenders to do?
Answer: Collect and report data on mortgage loan applications and originations to identify discrimination patterns
HMDA (Home Mortgage Disclosure Act) requires lenders to collect and publicly report data on loan applications and originations to help identify discriminatory lending practices.