A staff member asks whether a Massachusetts procedure for advertising and consumer-protection controls is compliant. Which answer is correct?
Correct Answer
D) Massachusetts mortgage advertising must meet the state advertising and consumer-protection rule.
Massachusetts prohibits a contract or solicitation under which the MLO or covered person may earn a fee or commission through best efforts to obtain a loan even though no loan is actually obtained for the borrower.
Why This Is the Correct Answer
Massachusetts mortgage advertising must meet the state advertising and consumer-protection rule. This is correct because Massachusetts prohibits a contract or solicitation under which the MLO or covered person may earn a fee or commission through best efforts to obtain a loan even though no loan is actually obtained for the borrower.
Why the Other Options Are Wrong
Option A: Postpone the Massachusetts advertising and consumer-protection controls issue until the next annual review.
Postpone the Massachusetts advertising and consumer-protection controls issue until the next annual review. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option B: Use only the federal baseline and ignore the separate Massachusetts state requirement.
Use only the federal baseline and ignore the separate Massachusetts state requirement. is not correct because the governing rule requires the compliant answer shown in the explanation.
Option C: Apply the rule only after the Massachusetts regulator has already opened an examination.
Apply the rule only after the Massachusetts regulator has already opened an examination. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
MA -> ma-prohibited-practices-and-consumer-protection
Exam Tip
Massachusetts prohibited-practice questions often test fraud or misleading conduct, unfair or deceptive practices, best-efforts fees, unlicensed activity, false filings, appraiser influence, prohibited fees, excessive insurance, and accounting for funds.
Common Mistakes to Avoid
- -Using a national baseline answer when Massachusetts has a state-specific rule
- -Confusing NMLS workflow, Massachusetts Division of Banks requirements, Chapter 255F rules, and state regulator guidance
- -Treating temporary authority, inactive status, or exemptions as blanket permission
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