A Delaware MLO advertises a specific interest rate that is not actually available when the advertisement is made. Under Regulation 2401, how is this treated?
Correct Answer
B) It is prohibited
Delaware Regulation 2401 prohibits soliciting, advertising, or contracting for specific rates, points, or financing terms unless the terms are actually available at the time.
Why This Is the Correct Answer
Delaware Regulation 2401 prohibits soliciting, advertising, or contracting for specific rates, points, or financing terms unless the terms are actually available at the time.
Why the Other Options Are Wrong
Option A: It is allowed if the MLO later finds a similar loan
Later finding a similar loan does not satisfy the requirement that the terms be actually available at the time of advertising.
Option C: It is allowed if the borrower does not complain
The prohibition does not depend on whether a borrower complains.
Option D: It is outside Delaware MLO rules because rates are only federal matters
Delaware Regulation 2401 directly addresses this advertising conduct.
Memory Technique
DE-C017 -> Delaware-prohibited-acts-and-enforcement
Exam Tip
Specific advertised terms must be actually available when advertised.
Common Mistakes to Avoid
- -Importing another state requirement into Delaware
- -Confusing NMLS baseline requirements with Delaware-specific rules
- -Treating operational assumptions as legal authority
More UST Questions
In a pricing desk question, an audit analyst sees facts tied to Prohibited Misrepresentation. What should the file reflect?
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An MLO's license status in NMLS changes to suspended, with no stay or reinstatement shown. What is the immediate operational effect?
Which fact most directly supports disciplinary action against an MLO rather than merely a request for additional application information?
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