During a New York state-law refresher, a sponsorship reviewer must resolve a question about advertising and consumer-protection controls. Which statement should control?
Correct Answer
C) New York high-cost home loan rules prohibit prepayment penalties and certain abusive practices such as loan flipping, financing certain fees, and other restricted loan terms.
New York high-cost home loan rules prohibit prepayment penalties and certain abusive practices such as loan flipping, financing certain fees, and other restricted loan terms.
Why This Is the Correct Answer
New York high-cost home loan rules prohibit prepayment penalties and certain abusive practices such as loan flipping, financing certain fees, and other restricted loan terms.
Why the Other Options Are Wrong
Option A: 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 B: Assume another state's approval automatically satisfies the New York requirement.
Assume another state's approval automatically satisfies the New York requirement. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option D: Apply the New York rule only to company licenses and never to individual MLO activity.
Apply the New York rule only to company licenses and never to individual MLO activity. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
NY -> ny-high-cost-subprime-reverse-mortgage-consumer-protections
Exam Tip
New York consumer-protection items often test Banking Law 6-l high-cost loans, 6-m subprime loans, reverse mortgage authority, 60+ reverse mortgage eligibility, 12-month occupancy issues, authorized designee notices, and co-op versus condo collateral.
Common Mistakes to Avoid
- -Using generic federal mortgage facts when New York DFS or Banking Law rules are being tested
- -Confusing Article 12-D company authority with Article 12-E individual MLO authority
- -Treating New York high-cost, subprime, reverse mortgage, MCR, unique identifier, or surety bond rules as optional
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