Which statement is most accurate about subterfuge or device under North Carolina MLO law or NCCOB guidance?
Correct Answer
D) NC prohibits doing by device, subterfuge, or pretense what would be unlawful directly under the article, including structuring a loan to avoid residential mortgage classification.
NC prohibits doing by device, subterfuge, or pretense what would be unlawful directly under the article, including structuring a loan to avoid residential mortgage classification. North Carolina prohibits doing anything by subterfuge or device that would not be lawful directly under the article.
Why This Is the Correct Answer
NC prohibits doing by device, subterfuge, or pretense what would be unlawful directly under the article, including structuring a loan to avoid residential mortgage classification. North Carolina prohibits doing anything by subterfuge or device that would not be lawful directly under the article.
Why the Other Options Are Wrong
Option A: Use another jurisdiction's approval as a substitute for the North Carolina requirement.
Use another jurisdiction's approval as a substitute for the North Carolina requirement. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option B: Treat the requirement as waived because the borrower or employer agrees.
Treat the requirement as waived because the borrower or employer agrees. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: Assume another state's approval automatically satisfies the North Carolina requirement.
Assume another state's approval automatically satisfies the North Carolina requirement. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
NC -> nc-examination-confidentiality-and-enforcement
Exam Tip
NC looks through devices or pretense used to avoid the article.
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
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