A lender is preparing a Washington compliance audit focused on advertising and consumer-protection controls. Which statement should be treated as accurate?
Correct Answer
A) Washington prohibits charging discount points that do not actually reduce the interest rate and prohibits misrepresenting a principal-and-interest-only payment as including taxes and insurance.
Washington prohibits charging discount points that do not actually reduce the interest rate and prohibits misrepresenting a principal-and-interest-only payment as including taxes and insurance.
Why This Is the Correct Answer
Washington prohibits charging discount points that do not actually reduce the interest rate and prohibits misrepresenting a principal-and-interest-only payment as including taxes and insurance.
Why the Other Options Are Wrong
Option B: Skip documentation because the loan-originator transfer appears routine.
Skip documentation because the loan-originator transfer appears routine. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: Rely on prior mortgage experience instead of the stated licensing or compliance requirement.
Rely on prior mortgage experience instead of the stated licensing or compliance requirement. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option D: Continue the activity and document the issue only if a complaint is later filed.
Continue the activity and document the issue only if a complaint is later filed. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
WA -> wa-prohibited-practices-disclosures-and-compensation
Exam Tip
Washington prohibited-practice questions often test timing, borrower compensation, document blanks, appraiser pressure, or misleading advertising.
Common Mistakes to Avoid
- -Using a national baseline answer when Washington has a state-specific rule
- -Confusing DFI guidance, RCW requirements, and WAC implementation details
- -Treating temporary authority, remote work, or exemptions as blanket permission
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