A branch manager asks about a loan file because marketing proposes a rate the company is not prepared to offer. What should happen?
Correct Answer
A) Advertise only credit terms actually available
Lines 261-265 and 273-277; 12 CFR 1026.24(a). Specific advertised terms must be terms the creditor actually is or will be prepared to offer. Therefore, the correct response is "Advertise only credit terms actually available".
Why This Is the Correct Answer
The correct response is "Advertise only credit terms actually available". Specific advertised terms must be terms the creditor actually is or will be prepared to offer.
Why the Other Options Are Wrong
Option B: Treat prior mortgage experience as a substitute for the required compliance condition.
Treat prior mortgage experience as a substitute for the required compliance condition. is not correct because it bypasses the rule supported by the explanation.
Option C: Use a generic national checklist instead of the requirement in this staff training note.
Use a generic national checklist instead of the requirement in this staff training note. is not correct because it bypasses the rule supported by the explanation.
Option D: Document that advertising and consumer protection was reviewed, but take no required corrective action.
Document that advertising and consumer protection was reviewed, but take no required corrective action. is not correct because it bypasses the rule supported by the explanation.
Memory Technique
For advertising, ask whether the exact term is real and available.
Exam Tip
For advertising, ask whether the exact term is real and available.
Common Mistakes to Avoid
- -A disclaimer does not cure a term that is not actually available.
More Ethics & Fraud Questions
The loan team is resolving Privacy and Confidentiality during a quality-control sample. Which action best fits the rule?
Before the team acts on a branch training session, the loan team must address UDAAP Unfair Deceptive Practices. Which response is most defensible?
Before the loan advances, a sponsorship reviewer must resolve an predatory-lending controls issue in an NMLS filing review. What should happen?
A disclosure specialist compares the file facts with Fraud Detection and Reporting during a new-hire scenario. Which conclusion is accurate?
Before the team acts on a production meeting, the MLO must address professional conduct standard to Borrowers. Which response is most defensible?
A processor compares the file facts with Fraud Detection and Prevention during an underwriting condition review. Which conclusion is accurate?
A risk reviewer is resolving Fair Lending Ethics during a quality-control sample. Which action best fits the rule?
During intake, a title company offers a gift card for each borrower referral. What is the best compliant response?
A compliance review finds that a title company offers a gift card for each borrower referral. What should the MLO do next?
A processor asks how to handle a file where a title company offers a gift card for each borrower referral. Which response is most accurate?
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