PrepL Regulatory Compliance 5

Question 1

A mortgage lender who charges higher interest rates to borrowers in a specific ZIP code regardless of creditworthiness may be engaged in:

Accepted Answer

Redlining

Answer

Redlining is the illegal practice of denying or increasing the cost of financial services to residents of certain geographic areas, often correlated with race or national origin.

Question 2

Which document provided to borrowers at closing replaced the HUD-1 Settlement Statement for most residential mortgages after October 2015?

Accepted Answer

Closing Disclosure

Answer

Under the TRID rule, the Closing Disclosure replaced the HUD-1 Settlement Statement and must be provided to borrowers at least three business days before closing.

Question 3

A broker is operating as a designated agency. What does this mean?

Accepted Answer

Different agents in the same brokerage are designated to each party as exclusive agents

Answer

In designated agency, the broker designates separate agents within the firm to exclusively represent the buyer and seller, avoiding true dual agency.

Question 4

Under the Americans with Disabilities Act, a real estate office that cannot be structurally modified to be accessible must:

Accepted Answer

Make services available through alternative methods such as home visits

Answer

When structural modifications are not readily achievable, the ADA requires businesses to find alternative methods to make their services accessible to people with disabilities.

Question 5

A real estate licensee must complete continuing education (CE) primarily to:

Accepted Answer

Maintain competency and meet license renewal requirements

Answer

Continuing education ensures licensees stay current with laws, regulations, and best practices, and is required by state licensing authorities as a condition of license renewal.

(PrepL) Preparation for Licensing Practice Test

(PrepL) Preparation for Licensing Practice Test

PrepL Regulatory Compliance 5