A CRMLA licensee quotes a 6.25% rate it cannot deliver, adds an undisclosed $1,400 charge at closing, and blames a processing error. Do the unavailable rate quote and undisclosed charge raise prohibited-conduct issues under the CRMLA?
Correct Answer
B) Both are prohibited conduct: misstatement and an undisclosed charge
The Act reaches dishonest, fraudulent, unfair and deceptive mortgage conduct, including misstatements and undisclosed charges, and calling it a processing error does not change what happened. Other choices: correction afterwards is not a defense; a quoted rate is a representation rather than a free estimate; and an undisclosed charge breaches state rules as well as federal ones. Source: Cal. Fin. Code § 50204
Why This Is the Correct Answer
The Act reaches dishonest, fraudulent, unfair and deceptive mortgage conduct, including misstatements and undisclosed charges, and calling it a processing error does not change what happened. Other choices: correction afterwards is not a defense; a quoted rate is a representation rather than a free estimate; and an undisclosed charge breaches state rules as well as federal ones. Source: Cal. Fin. Code § 50204
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