A Georgia review asks whether a high-cost refinance is unfair loan flipping. Which fact pattern is risky?
Correct Answer
D) Refinancing a recent high-cost home loan without reasonable tangible net benefit can be unfair flipping.
Georgia Fair Lending Act flipping is the unfair practice of consummating a high-cost home loan that refinances an existing home loan consummated within the prior 5 years when the new loan does not provide a reasonable tangible net benefit to the borrower.
Why This Is the Correct Answer
The correct response is "Refinancing a recent high-cost home loan without reasonable tangible net benefit can be unfair flipping." because Georgia Fair Lending Act flipping is the unfair practice of consummating a high-cost home loan that refinances an existing home loan consummated within the prior 5 years when the new loan does not provide a reasonable tangible net benefit to the borrower.
Why the Other Options Are Wrong
Option A: Every refinance within five years is prohibited even when it benefits the borrower.
Every refinance within five years is prohibited even when it benefits the borrower. is not correct because it does not match the state-specific rule tested by the question.
Option B: Flipping rules apply only when the borrower receives cash at closing.
Flipping rules apply only when the borrower receives cash at closing. is not correct because it does not match the state-specific rule tested by the question.
Option C: A high-cost refinance is allowed whenever the new payment is initially lower.
A high-cost refinance is allowed whenever the new payment is initially lower. is not correct because it does not match the state-specific rule tested by the question.
Memory Technique
State rule questions: identify the state, isolate the condition, then eliminate answers that overgeneralize the rule.
Exam Tip
On state-law items, look for the answer that applies the state-specific condition instead of a broad licensing shortcut.
Common Mistakes to Avoid
- -Choosing an answer that sounds generally compliant but omits the state-specific condition
- -Treating experience, company licensing, or borrower consent as a substitute for the state rule
- -Missing limiting words such as only, generally, eligible, or statutory
More UST Questions
A Washington broker provides the federal settlement service estimates and booklet in 2026 and no separate state itemization. Can disclosures compliant with RESPA and Regulation X satisfy the state third-party itemization subsection?
Priya is comparing pre-license education providers before applying for a Florida mortgage loan originator license. How many hours of approved pre-license education must she complete in total?
An applicant is budgeting for a Florida MLO license and asks what the state application fee comes to at filing. Which figure is correct?
A newly sponsored Florida MLO is told she must buy an individual surety bond in her own name before she can originate. Is that correct?
A Washington consumer loan act licensee also brokers loans in 2026 outside the authority of that act. Does the consumer-loan-act exemption extend to mortgage brokerage outside that act’s authority?
A $200,000 Texas home equity loan has $3,700 in fees subject to the constitutional cap and a separate $600 fee for an appraisal performed by a third-party appraiser. Do the capped fees exceed the limit?
An owner applies for a Texas home equity loan on 4 May 2026 and the lender delivers the required notice on 8 May. Which date starts the constitutional 12-day waiting period for closing?
An owner closed a Texas home equity loan on 3 February 2026 and wants a second one on the same homestead in November 2026. Assuming no declared-emergency exception applies and the earlier home equity lien will be paid off, may the new loan close in November?
A Texas home equity loan forecloses and the sale leaves the lender $62,000 short of the balance owed. Absent actual fraud in obtaining the credit, may the lender recover the shortfall personally from the owner or spouse?
A Washington real estate broker helps a 2026 buyer arrange financing and takes only the usual sales commission. Does financing assistance incidental to a bona fide sale for only the customary real-estate commission fall within the exemption?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Mortgage Loan Origination Activities
27% of exam
Ethics, Fraud & Consumer Protection
18% of exam