Ethics, Fraud & Consumer Protection

In a file escalation meeting, the supervisor sees facts tied to RESPA Kickbacks and Referrals. What should the file reflect?

In a closing-readiness check, a disclosure specialist sees facts tied to Appraisal Fraud Detection. What should the file reflect?

At closing, an MLO adds a single-premium credit-life policy to the loan amount even though the borrower declined it and the policy is not required for approval. Which practice is the clearest concern?

A refinance eliminates a borrower's fixed-rate loan, adds substantial fees, provides no cash or lower payment, and restarts a 30-year term. What should the MLO do before recommending it?

An applicant has verified monthly income of $5,000 and monthly obligations of $4,700 after the proposed mortgage payment. The applicant expects an undocumented raise next year. What should the MLO do?

A lender bases approval entirely on the home's high appraised value and does not verify the borrower's income or existing debts. What is the central compliance concern?

A borrower agrees to a mortgage but declines an optional home-warranty plan. The final loan documents nevertheless finance a $2,400 warranty premium. What should the MLO do?

An MLO recommends a loan with a low initial payment that will increase sharply in two years. The borrower says retirement income will be fixed and asks whether the payment can change. What is the appropriate response?

To obtain approval, an MLO changes a self-employed applicant's verified monthly income from $6,000 to $9,000 without supporting documentation. How should this conduct be characterized?

A homeowner is encouraged to refinance for the third time in 18 months. Each loan generates new points and fees, while the borrower's payment and rate do not improve. Which practice is most strongly indicated?

A borrower discovers that the loan amount includes fees for three optional credit products that were never discussed. Which fact most strongly indicates loan packing?

During a borrower intake review, a policy analyst encounters an ECOA Disparate Impact issue. Which response should resolve the issue before the file moves forward?

An MLO tells a borrower that an optional identity-theft product is required by federal law and finances its fee into the loan. In fact, no such requirement exists. What should the compliance review conclude?

A borrower qualifies for both a stable fixed-rate loan and a payment-option loan with negative-amortization risk. The MLO recommends the latter solely because it pays more compensation. What is the primary concern?

A closing coordinator compares the file facts with Fair Lending Disparate Impact during a licensing team review. Which conclusion is accurate?

Which action best prevents loan packing when a borrower is offered optional credit insurance?

When evaluating ability to repay for a covered mortgage, which information should be considered and verified as applicable?

An elderly homeowner with substantial equity is offered a cash-out refinance whose fees consume most of the proceeds and whose payment is plainly unaffordable. Which concern is most directly presented?

For a covered mortgage, a creditor verifies income and debts but qualifies the borrower using only a temporary introductory payment instead of the payment required by the ATR rule. What is the problem?

An applicant's overtime income varied substantially over the last two years. Before relying on it to qualify the borrower, what should the originator ensure?

An MLO alters a bank statement to make the applicant's account balance appear higher and submits it to underwriting. Which response is appropriate?

A branch manager asks about a loan file because marketing proposes a rate the company is not prepared to offer. What should happen?

A lender offers an optional debt-cancellation product. Before adding its premium to the mortgage balance, what should occur?

A borrower wants cash for necessary home repairs. A proposed refinance provides $15,000 cash but adds $12,000 in costs and extends repayment by 15 years. What is the best next step for the MLO?

A transaction meets the applicable high-cost mortgage coverage tests. Which statement is accurate?

Before closing, the team discovers that an ad shows an interest rate but omits the APR presentation. What is the safest compliant answer?

A processor compares the file facts with Fraud Detection and Prevention during an underwriting condition review. Which conclusion is accurate?

Before the team acts on a production meeting, the MLO must address professional conduct standard to Borrowers. Which response is most defensible?

The loan team is resolving Privacy and Confidentiality during a quality-control sample. Which action best fits the rule?

A disclosure specialist compares the file facts with Fraud Detection and Reporting during a new-hire scenario. Which conclusion is accurate?

In a training scenario, a title company offers a gift card for each borrower referral. What action best follows the rule?

A quality-control reviewer flags a case because a settlement provider asks to be paid for a task it did not actually perform. What correction is appropriate?

During intake, a title company offers a gift card for each borrower referral. What is the best compliant response?

A compliance review finds that an MLO refers a borrower to an affiliated title agency. What should the MLO do next?

Before closing, the team discovers that a borrower asks whether the company will file a suspicious activity report. What is the safest compliant answer?

A processor asks how to handle a file where a settlement provider asks to be paid for a task it did not actually perform. Which response is most accurate?

A compliance review finds that a loan officer wants different terms because of a protected applicant characteristic. What should the MLO do next?

A branch manager asks about a loan file because a settlement provider asks to be paid for a task it did not actually perform. What should happen?

Before closing, the team discovers that a loan officer wants different terms because of a protected applicant characteristic. What is the safest compliant answer?

A borrower-facing employee is unsure what to do when marketing proposes a rate the company is not prepared to offer. What is the correct response?

A compliance review finds that a title company offers a gift card for each borrower referral. What should the MLO do next?

A borrower-facing employee is unsure what to do when a loan officer wants different terms because of a protected applicant characteristic. What is the correct response?

An MLO is reviewing procedures for a case where a settlement provider asks to be paid for a task it did not actually perform. What is the proper handling?

In a mortgage origination file, an ad shows an interest rate but omits the APR presentation. Which action should be taken?

Before closing, the team discovers that a settlement provider asks to be paid for a task it did not actually perform. What is the safest compliant answer?

In a training scenario, a settlement provider asks to be paid for a task it did not actually perform. What action best follows the rule?

A quality-control reviewer flags a case because a borrower asks whether the company will file a suspicious activity report. What correction is appropriate?

An MLO is reviewing procedures for a case where a title company offers a gift card for each borrower referral. What is the proper handling?

In a mortgage origination file, a title company offers a gift card for each borrower referral. Which action should be taken?

A processor asks how to handle a file where a loan officer wants different terms because of a protected applicant characteristic. Which response is most accurate?