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

Truth in Lending Act (TILA)

Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Home Mortgage Disclosure Act (HMDA)

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

15 days

Answer

60 days

Answer

90 days

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

Prepaid interest

Answer

Recording fees

Answer

Property insurance premiums

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

The loan must be for an amount exceeding $1 million.

Answer

The commercial entity must be a non-profit organization.

Answer

The loan's purpose 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

Community Reinvestment Act (CRA)

Answer

Gramm-Leach-Bliley Act (GLBA) Privacy Rule

Answer

Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act

Question 6

A borrower's loan application is declined due to information obtained from a credit report. In addition to the ECOA adverse action notice, what specific disclosure is required under the Fair Credit Reporting Act (FCRA)?

Accepted Answer

A statement that the credit reporting agency did not make the credit decision and can't provide the reasons for it.

Answer

A copy of the borrower's complete loan file.

Answer

The name and contact information of the underwriter who made the decision.

Answer

A list of alternative lenders who may approve the loan.