Ethics and Professional Conduct Flashcards
7 cards from real CMC 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
Under the Dodd-Frank Act's anti-steering provisions, a loan originator is prohibited from receiving compensation that varies based on:
Answer: The interest rate or other loan terms
Dodd-Frank prohibits compensation arrangements where the originator's pay varies based on the interest rate or other loan terms to prevent steering borrowers into higher-cost loans.
A CMC is pressured by a real estate agent to approve a marginal borrower to save a deal. The ethical response is to:
Answer: Deny or condition the loan based solely on objective underwriting criteria
Loan decisions must be based on objective underwriting standards; pressure from third parties cannot ethically influence credit decisions.
When advertising mortgage products, a CMC must ensure that:
Answer: All advertised terms are accurate, clearly stated, and include required disclosures
TILA and Regulation Z require that mortgage advertisements be accurate and include required disclosures such as APR when a triggering term is used.
A borrower of a protected class is quoted a higher interest rate than a similarly qualified borrower not in that class. This practice is known as:
Answer: Disparate treatment
Disparate treatment occurs when a lender treats applicants differently based on a protected characteristic such as race, national origin, or religion.
CMC continuing education requirements exist primarily to:
Answer: Ensure practitioners remain current with evolving regulations and best practices
Continuing education keeps CMCs current with regulatory changes, ethical standards, and industry best practices to better protect consumers.
A client with limited English proficiency (LEP) needs mortgage assistance. The CMC's ethical obligation is to:
Answer: Provide meaningful access to mortgage services, including translation resources if needed
Fair lending principles and CFPB guidance require that LEP borrowers receive meaningful access to services, including translated materials or interpreter assistance.
Which of the following actions by a CMC would most likely constitute a violation of the Gramm-Leach-Bliley Act (GLBA)?
Answer: Sharing nonpublic personal information with an unaffiliated third party without client consent
GLBA requires financial institutions to protect nonpublic personal information and prohibits sharing it with unaffiliated third parties without proper notice and opt-out opportunity.