An MLO's advertisement includes the statement 'Payments as low as $500 per month.' What additional disclosures are required under TILA?
Correct Answer
B) The payment amount, loan term, and whether the payment will increase
Under TILA Regulation Z, when a payment amount is advertised (triggering term), the ad must also disclose the amount or percentage of down payment, terms of repayment, and the APR. For variable rate loans, it must state that payments may increase.
Why This Is the Correct Answer
Under TILA Regulation Z, when a payment amount is advertised (triggering term), the ad must also disclose the amount or percentage of down payment, terms of repayment, and the APR. For variable rate loans, it must state that payments may increase.
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?
A mortgage loan originator receives a lead from a real estate agent about a potential borrower. Before calling this consumer, the MLO must:
An MLO tells Asian applicants that they need larger down payments 'because that's what investors prefer for your type of loan,' while telling similarly qualified white applicants that standard down payments are acceptable. This practice represents:
A mortgage company advertises 'Guaranteed approval for all credit types!' but internally has minimum credit score requirements of 580. This advertisement is problematic because it:
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Previous Question
During a fair lending examination, regulators discover that a bank's loan officers receive higher commissions for loans with interest rates above 6%, and statistical analysis shows borrowers in predominantly minority neighborhoods receive these higher-rate loans more frequently. This compensation structure would MOST likely be viewed as:
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An MLO discovers that a borrower has overstated their income on the loan application after the loan has been approved but before closing. The MLO's ethical obligation is to: