A practice question asks about servicer baseline duties. Which answer best matches the official North Carolina rule?
Correct Answer
B) NC servicers must safeguard borrower funds, follow reasonable borrower instructions, act with reasonable skill, care, and diligence, file required reports, and comply with applicable federal servicing duties.
NC servicers must safeguard borrower funds, follow reasonable borrower instructions, act with reasonable skill, care, and diligence, file required reports, and comply with applicable federal servicing duties. North Carolina mortgage loan servicers must safeguard and account for borrower funds, follow reasonable borrower instructions, act with reasonable skill/care/diligence, file required reports, and comply with applicable federal laws.
Why This Is the Correct Answer
NC servicers must safeguard borrower funds, follow reasonable borrower instructions, act with reasonable skill, care, and diligence, file required reports, and comply with applicable federal servicing duties. North Carolina mortgage loan servicers must safeguard and account for borrower funds, follow reasonable borrower instructions, act with reasonable skill/care/diligence, file required reports, and comply with applicable federal laws.
Why the Other Options Are Wrong
Option A: Handle advertising and consumer-protection controls with an informal note rather than the required license, disclosure, filing, or record.
Handle advertising and consumer-protection controls with an informal note rather than the required license, disclosure, filing, or record. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: 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 D: 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.
Memory Technique
NC -> nc-servicing-prohibited-acts-advertising-and-high-cost
Exam Tip
Servicing duties are affirmative duties, not just prohibited acts.
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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