A mortgage file is paused during a lock-desk handoff because of Privacy Protection Breach Response. Which answer should choose the compliant next step?
Correct Answer
A) Limit sharing of nonpublic personal information
Why this is correct: The governing concept is the duty to protect nonpublic personal information (NPI) under privacy laws like the Gramm-Leach-Bliley Act (GLBA). When a privacy protection breach is suspected or identified during a process like a lock-desk handoff, the immediate, compliant step is to limit further sharing of NPI to prevent additional unauthorized disclosure. Why the other choices are wrong: "Continue the activity because the borrower appears willing to proceed" is wrong because a borrower's willingness does not override the legal duty to safeguard their information. "Ignore the consumer-protection issue unless the borrower complains" is wrong because the obligation to protect data is proactive and not dependent on a consumer complaint. "Document the issue later instead of correcting the compliance problem first" is wrong because the primary response to a breach is containment and correction; documentation is secondary. Exam tip: In any privacy breach scenario, the first action is always to stop the unauthorized flow of information. Containment comes before documentation or investigation.
Why This Is the Correct Answer
The correct response is "Limit sharing of nonpublic personal information" because Borrower information must be protected and shared only with authority.
Why the Other Options Are Wrong
Option B: Continue the activity because the borrower appears willing to proceed.
Continue the activity because the borrower appears willing to proceed. is not correct because it does not apply the rule tested by this file scenario.
Option C: Ignore the consumer-protection issue unless the borrower complains.
Ignore the consumer-protection issue unless the borrower complains. is not correct because it does not apply the rule tested by this file scenario.
Option D: Document the issue later instead of correcting the compliance problem first.
Document the issue later instead of correcting the compliance problem first. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
borrower privacy and confidentiality: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to borrower privacy and confidentiality; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
More Ethics & Fraud Questions
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The loan team is resolving Privacy and Confidentiality during a quality-control sample. Which action best fits the rule?
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