CMB - Certified Mortgage Banker Regulatory Compliance and Law Questions and Answers

Question 1

A mortgage company's recent marketing campaign for a new loan product exclusively used images of young, affluent couples in advertisements placed in magazines and on social media platforms popular with a similar demographic. Which of the following regulations is most likely violated by this campaign?

Accepted Answer

Fair Housing Act (FHA)

Answer

The Fair Housing Act prohibits any advertising that indicates a preference, limitation, or discrimination based on protected characteristics such as race, color, religion, sex, familial status, or national origin. Using models that are not inclusive and targeting media to exclude certain groups can be construed as discriminatory.

Question 2

A loan applicant is denied a mortgage. According to the Equal Credit Opportunity Act (ECOA), how long does the lender have to notify the applicant of the adverse action after receiving a completed application?

Accepted Answer

30 days

Answer

Under the Equal Credit Opportunity Act (ECOA) and its implementing Regulation B, a creditor must notify an applicant of adverse action taken within 30 days after receiving a completed application.

Question 3

Under the TILA-RESPA Integrated Disclosure (TRID) rule, which of the following fees falls into the 'zero tolerance' category, meaning it cannot increase between the Loan Estimate (LE) and the Closing Disclosure (CD)?

Accepted Answer

Fees paid to a creditor-required third-party service provider not chosen by the borrower

Answer

The TRID rule has strict tolerance levels for fee changes. Fees paid to the creditor, mortgage broker, or an affiliate of either, along with fees paid to a third-party provider for a service the lender did not permit the borrower to shop for, have zero tolerance for increases.

Question 4

A commercial entity applies for a loan to purchase a 20-unit apartment building. For this loan to be reportable under the Home Mortgage Disclosure Act (HMDA), which of the following conditions must be met?

Accepted Answer

The loan must be permanently financed by a government agency.

Answer

For a business or commercial-purpose loan secured by a dwelling (like an apartment building) to be reportable under HMDA, the purpose of the loan must be for home purchase, home improvement, or refinancing.

Question 5

A mortgage banker is reviewing a new loan file and notes that the applicant, a self-employed individual, has provided financial statements that show unusually large, sporadic deposits that are inconsistent with the stated nature of their business. This scenario represents a potential red flag for which area of regulatory compliance?

Accepted Answer

Bank Secrecy Act/Anti-Money Laundering (BSA/AML)

Answer

The Bank Secrecy Act (BSA) and related Anti-Money Laundering (AML) rules require financial institutions to monitor for and report suspicious activity. Unusually large or inconsistent transactions that do not align with a customer's known business profile are a common red flag for potential money laundering.

CMB - Certified Mortgage Banker Practice Test

CMB - Certified Mortgage Banker Practice Test

CMB - Certified Mortgage Banker Regulatory Compliance and Law Questions and Answers