Practice Test Geeks(SAFE) Certified Secure and Fair Enforcement Mortgage Loan Originator Practice Test
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Ethics and Professional Conduct Flashcards

7 cards from real SAFE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Ethics and Professional Conduct flashcards as text

  1. An MLO discovers that a borrower's income was overstated on an already-submitted application. What is the correct ethical action?

    Answer: Notify the lender and correct the application immediately

    MLOs must ensure all information submitted to lenders is accurate and must correct errors as soon as they are discovered.

  2. Under the SAFE Act, which behavior would constitute a violation of an MLO's ethical obligations?

    Answer: Steering a borrower toward a higher-rate product to earn a larger commission

    Steering borrowers into less favorable loan products for personal financial gain is an unethical practice prohibited under federal law.

  3. A borrower who is a personal friend asks an MLO to skip some required disclosures to speed up closing. The MLO should:

    Answer: Provide all required disclosures regardless of the borrower's relationship

    Required disclosures cannot be waived by the borrower or skipped by the MLO; they are legally mandated protections.

  4. Which of the following best describes the duty of confidentiality for an MLO?

    Answer: Protecting non-public personal information from unauthorized disclosure

    MLOs must protect non-public personal information (NPI) under the Gramm-Leach-Bliley Act and ethical standards.

  5. An MLO receives a referral fee from a title company for directing borrowers to use their services. This practice is:

    Answer: Prohibited under RESPA Section 8 regardless of disclosure

    RESPA Section 8 prohibits kickbacks and referral fees between settlement service providers regardless of disclosure.

  6. When must an MLO disclose a material conflict of interest to a borrower?

    Answer: Before or at the time of the loan application

    Material conflicts of interest must be disclosed proactively before or at application so the borrower can make an informed decision.

  7. An MLO who falsifies a borrower's employment history on a loan application could face:

    Answer: Criminal charges for mortgage fraud, fines, and license revocation

    Falsifying information on a mortgage application is federal mortgage fraud, subject to criminal prosecution, civil penalties, and license revocation.