A company structures a transaction to avoid classification as a covered residential mortgage loan. What is the best conclusion 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: Assume the North Carolina requirement does not apply to this state-law refresher.
Assume the North Carolina requirement does not apply to this state-law refresher. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option B: Treat examination, supervision, and enforcement as satisfied by borrower consent alone.
Treat examination, supervision, and enforcement as satisfied by borrower consent alone. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: Delay the North Carolina requirement until after the loan closes or the renewal period ends.
Delay the North Carolina requirement until after the loan closes or the renewal period ends. 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
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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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?
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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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