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Ethics & Fraudhard18% of exam

In a mortgage origination file, an ad shows an interest rate but omits the APR presentation. Which action should be taken?

Correct Answer

B) State the rate as an annual percentage rate

Lines 261-265 and 273-277; 12 CFR 1026.24(c). Closed-end credit advertising rules require the finance charge rate to be stated as an annual percentage rate. Therefore, the correct response is "State the rate as an annual percentage rate".

Answer Options
A
Treat the compliance requirement as optional because closing is near.
B
State the rate as an annual percentage rate
C
Continue processing without correcting the disclosure, licensing, compensation, or consumer-protection issue.
D
Ignore the issue if the borrower orally agrees to continue.

Why This Is the Correct Answer

Lines 261-265 and 273-277; 12 CFR 1026.24(c). Closed-end credit advertising rules require the finance charge rate to be stated as an annual percentage rate. Therefore, the correct response is "State the rate as an annual percentage rate".

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