An originator makes a false promise likely to induce a borrower to take a loan. What is the best conclusion under North Carolina MLO law or NCCOB guidance?
Correct Answer
D) NC prohibits misrepresentation, false promises, fraud, unfair or deceptive practices, and failing to account for money in residential mortgage transactions.
NC prohibits misrepresentation, false promises, fraud, unfair or deceptive practices, and failing to account for money in residential mortgage transactions. North Carolina prohibits misrepresentation, false promises, fraud, unfair or deceptive practices, failure to account for money, and several other acts in mortgage lending and servicing.
Why This Is the Correct Answer
NC prohibits misrepresentation, false promises, fraud, unfair or deceptive practices, and failing to account for money in residential mortgage transactions. North Carolina prohibits misrepresentation, false promises, fraud, unfair or deceptive practices, failure to account for money, and several other acts in mortgage lending and servicing.
Why the Other Options Are Wrong
Option A: Use a annual compliance meeting exception instead of satisfying the rule before activity continues.
Use a annual compliance meeting exception instead of satisfying the rule before activity continues. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option B: Close or renew first, then decide whether the annual compliance meeting needs a compliance correction.
Close or renew first, then decide whether the annual compliance meeting needs a compliance correction. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: Proceed before the required North Carolina license, sponsorship, disclosure, record, or approval is in place.
Proceed before the required North Carolina license, sponsorship, disclosure, record, or approval is in place. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
NC -> nc-servicing-prohibited-acts-advertising-and-high-cost
Exam Tip
Misrepresentation and failure to account for funds are classic NC prohibited-act traps.
Common Mistakes to Avoid
- -Using a national baseline answer when North Carolina has a state-specific rule
- -Confusing company licensing, MLO licensing, and sponsorship
- -Treating an exemption or temporary authority rule as a blanket waiver
More UST Questions
In a pricing desk question, an audit analyst sees facts tied to Prohibited Misrepresentation. What should the file reflect?
An applicant previously had an MLO license revoked by a state regulator. Under the SAFE Act minimum standards for a new state-licensed MLO license, which statement is correct?
Which statement correctly distinguishes a license suspension from a license revocation?
A state regulator has issued an order suspending an MLO's authority effective immediately. The MLO has filed an appeal, but no stay has been granted. What should the MLO do?
An MLO license application asks whether the applicant has been the subject of a regulatory order. The applicant has a recent consent order that falls within the question. What is the proper response?
Why does NMLS maintain licensing and enforcement information that participating regulators can access?
A regulator issues a final license suspension without giving the MLO notice of the alleged violation or any opportunity to respond, even though applicable law requires both. What issue is presented?
A regulator finds that an MLO charged consumers prohibited fees. Which set of actions is consistent with the enforcement tools contemplated by Regulation H?
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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