An MLO wants to advertise 'No closing costs!' for a refinance product where the lender pays all third-party fees but charges a higher interest rate to compensate. To comply with TRID advertising requirements, the MLO must:
Correct Answer
B) Clearly and conspicuously disclose that costs are included in the loan terms and provide the actual APR
Under TRID and Regulation Z, when advertising 'no closing costs,' the MLO must clearly disclose how costs are handled and provide accurate APR information. The advertisement cannot be misleading about the true cost structure of the loan.
Why This Is the Correct Answer
Under TRID and Regulation Z, when advertising 'no closing costs,' the MLO must clearly disclose how costs are handled and provide accurate APR information. The advertisement cannot be misleading about the true cost structure of the loan.
More Ethics & Fraud Questions
A lender's mobile app prominently displays a 'pre-qualification' feature that asks for minimal information but generates loan amount estimates that are consistently 20-30% higher than what borrowers actually qualify for when they complete full applications. The app includes a disclaimer that estimates are 'subject to full underwriting.' This practice is most likely:
An MLO discovers that multiple loan applications from different borrowers contain identical handwriting in the signature sections, despite different purported signers. The applications were submitted by different real estate agents. What is the most appropriate immediate action?
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Previous Question
A borrower provides a lease agreement showing $3,500 monthly rental income from a basement apartment. During the property inspection, the MLO discovers the basement has no separate entrance and shares utilities with the main residence. What red flag does this scenario present?
Next Question
An appraisal report shows the appraiser inspected the property on a date when public records indicate the property was under construction and uninhabitable. The appraisal describes a completed property. This suggests: