A regulator-facing procedure for Virginia operations addresses advertising and consumer-protection controls. Which answer reflects the requirement?
Correct Answer
D) Virginia mortgage advertising must meet the state advertising and consumer-protection rule.
Virginia Chapter 16 prohibitions include blank instruments, collateral beyond the real estate or residential property securing the mortgage loan, exclusive dealing agreements, delaying closing to increase borrower costs, improper acceleration clauses, recommending default before refinance, and flipping within 12 months unless in the borrower best interest.
Why This Is the Correct Answer
Virginia mortgage advertising must meet the state advertising and consumer-protection rule. This is correct because Virginia Chapter 16 prohibitions include blank instruments, collateral beyond the real estate or residential property securing the mortgage loan, exclusive dealing agreements, delaying closing to increase borrower costs, improper acceleration clauses, recommending default before refinance, and flipping within 12 months unless in the borrower best interest.
Why the Other Options Are Wrong
Option A: Postpone the Virginia advertising and consumer-protection controls issue until the next annual review.
Postpone the Virginia 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 Virginia state requirement.
Use only the federal baseline and ignore the separate Virginia 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 Virginia regulator has already opened an examination.
Apply the rule only after the Virginia regulator has already opened an examination. is not correct because the governing rule requires the compliant answer shown in the explanation.
Memory Technique
VA -> va-enforcement-discipline-penalties-consumer-protection
Exam Tip
Virginia enforcement questions test advertising disclosure retention, false government or noteholder impressions, flipping and default prohibitions, settlement statement and Regulation Z disclosure, broker compensation and duty, escrow rules, MLO discipline, 15-day reports, 21-day notice, 14-day hearing requests, $2500 penalties, Class 6 felony exposure, Attorney General referral, restitution, and private remedies.
Common Mistakes to Avoid
- -Using generic federal mortgage facts when Virginia Code, Virginia Administrative Code, SCC/BFI, or NMLS state-specific rules are being tested
- -Confusing Virginia individual MLO licensing or sponsorship with mortgage lender, broker, branch, remote-location, or company requirements
- -Treating Virginia bond, record, advertising, disclosure, lock-in, escrow, reporting, or enforcement requirements as optional
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