MLO - Ethics Exam Questions with Verified Answers Latest Update 2025 Already Passed
Which federal law was passed to address redlining?
-CRA
-ECOA
-HERA
-MIDA - Answers CRA
***The Community Reinvestment Act helps eliminate redlining by requiring lenders to make loans in the
neighborhoods in which they are located.***
Under RESPA, who is subject to fines and penalties if a kickback is paid?
-the person who paid the kickback.
-the person who received the kickback.
-the person who initiated the kickback.
-anyone who initiated, paid, or received a kickback. - Answers -anyone who initiated, paid, or received a
kickback.
How could someone fall victim to identity theft?
-A prospective borrower uses a fictitious or ---- stolen identity on a loan application.
-A professional license number could be used with a forged signature to falsify reports.
-A person neglects to shred documents containing personal information.
-All of the above - Answers -All of the above
-All of the above - Answers How could someone fall victim to identity theft?
,-A prospective borrower uses a fictitious or ---- stolen identity on a loan application.
-A professional license number could be used with a forged signature to falsify reports.
-A person neglects to shred documents containing personal information.
-All of the above
An appraiser accepts an assignment that stipulates the $400.00 fee will be paid if the value comes in
above $300,000.
-This is a normal part of the appraisal business.
-Provided the appraiser discloses the fee, he or she may accept the assignment.
-If the property actually does appraise above the preconditioned amount, the appraiser may take the
assignment.
-An appraiser must not accept an assignment that includes the reporting of predetermined opinions. -
Answers -An appraiser must not accept an assignment that includes the reporting of predetermined
opinions.
A questionable fee that is incorporated into the closing costs associated with the loan is a __________
fee.
-warehouse
-junk
-document processing
-yield-spread - Answers Junk fee
**A junk fee is a questionable fee charged in closing costs that may not bear any significant relationship
to the actual loan transaction**
,Paying or receiving kickbacks in exchange for referrals of settlement service business involving a
federally related mortgage loan is a violation of the:
-Real Estate Settlement Procedures Act (RESPA).
-Fair Debt Collection Practices Act (FDCPA).
-Consumer Product Safety Act (CPSA).
-Economic Growth and Tax Relief Reconciliation Act (EGTRRA) - Answers Real Estate Settlement
Procedures Act (RESPA)
***In many deceptive advertisement cases, lenders make claims that cannot or have not been
substantiated by concrete evidence or proof, but they use these claims to charge borrowers higher rates
and fees. In other instances, service providers pay kickbacks in exchange for referrals of settlement
service business involving a federally related mortgage loan, which is in violation of the Real Estate
Settlement Procedures Act (RESPA).***
Which statement is correct regarding kickbacks?
Kickbacks violate only federal laws
Kickbacks violate only state laws
Kickbacks violate federal and state laws
Kickbacks are not necessarily illegal - Answers -Kickbacks are not necessarily illegal
***Although many types of kickbacks are prohibited under federal and state law, kickbacks are not
illegal per se. If a kickback does not specifically violate federal or state laws and such kickbacks are made
to clients throughout the industry, the kickback may be normal, legal, and even tax deductible***
What is the act of falsifying W-2s, bank statements, and other records to meet the tougher income and
asset guidelines by lenders?
Money laundering
, Income and/or asset fraud
Fraud for profit
Racketeering - Answers -Income and/or asset fraud
***Income and/or asset fraud is an intentional misrepresentation of income and/or assets on a
mortgage loan application in order to qualify for a mortgage. Others lie about the assets that they have
available for the down payment. Unscrupulous borrowers are undaunted by the more stringent
requirements and try to circumvent the process by falsifying W-2s, bank statements, and other records
to meet the tougher income and asset guidelines lenders have adopted.***
____________________fraud is - Answers an intentional misrepresentation of income and/or assets on
a mortgage loan application in order to qualify for a mortgage. Others lie about the assets that they
have available for the down payment. Unscrupulous borrowers are undaunted by the more stringent
requirements and try to circumvent the process by falsifying W-2s, bank statements, and other records
to meet the tougher income and asset guidelines lenders have adopted.***
The most common fraudulent act committed by appraisers is to:
-falsify appraiser credentials.
-misuse MLS data.
-overvalue properties.
-undervalue properties. - Answers -overvalue properties.
***Inflating the value of a property is the most common fraudulent action made by appraisers.***
The practice of pushing a borrower into a loan agreement that is more beneficial to the lender than it is
to the borrowers is known as:
steering.
redlining.
adjudication.
stipulation. - Answers steering.
Which federal law was passed to address redlining?
-CRA
-ECOA
-HERA
-MIDA - Answers CRA
***The Community Reinvestment Act helps eliminate redlining by requiring lenders to make loans in the
neighborhoods in which they are located.***
Under RESPA, who is subject to fines and penalties if a kickback is paid?
-the person who paid the kickback.
-the person who received the kickback.
-the person who initiated the kickback.
-anyone who initiated, paid, or received a kickback. - Answers -anyone who initiated, paid, or received a
kickback.
How could someone fall victim to identity theft?
-A prospective borrower uses a fictitious or ---- stolen identity on a loan application.
-A professional license number could be used with a forged signature to falsify reports.
-A person neglects to shred documents containing personal information.
-All of the above - Answers -All of the above
-All of the above - Answers How could someone fall victim to identity theft?
,-A prospective borrower uses a fictitious or ---- stolen identity on a loan application.
-A professional license number could be used with a forged signature to falsify reports.
-A person neglects to shred documents containing personal information.
-All of the above
An appraiser accepts an assignment that stipulates the $400.00 fee will be paid if the value comes in
above $300,000.
-This is a normal part of the appraisal business.
-Provided the appraiser discloses the fee, he or she may accept the assignment.
-If the property actually does appraise above the preconditioned amount, the appraiser may take the
assignment.
-An appraiser must not accept an assignment that includes the reporting of predetermined opinions. -
Answers -An appraiser must not accept an assignment that includes the reporting of predetermined
opinions.
A questionable fee that is incorporated into the closing costs associated with the loan is a __________
fee.
-warehouse
-junk
-document processing
-yield-spread - Answers Junk fee
**A junk fee is a questionable fee charged in closing costs that may not bear any significant relationship
to the actual loan transaction**
,Paying or receiving kickbacks in exchange for referrals of settlement service business involving a
federally related mortgage loan is a violation of the:
-Real Estate Settlement Procedures Act (RESPA).
-Fair Debt Collection Practices Act (FDCPA).
-Consumer Product Safety Act (CPSA).
-Economic Growth and Tax Relief Reconciliation Act (EGTRRA) - Answers Real Estate Settlement
Procedures Act (RESPA)
***In many deceptive advertisement cases, lenders make claims that cannot or have not been
substantiated by concrete evidence or proof, but they use these claims to charge borrowers higher rates
and fees. In other instances, service providers pay kickbacks in exchange for referrals of settlement
service business involving a federally related mortgage loan, which is in violation of the Real Estate
Settlement Procedures Act (RESPA).***
Which statement is correct regarding kickbacks?
Kickbacks violate only federal laws
Kickbacks violate only state laws
Kickbacks violate federal and state laws
Kickbacks are not necessarily illegal - Answers -Kickbacks are not necessarily illegal
***Although many types of kickbacks are prohibited under federal and state law, kickbacks are not
illegal per se. If a kickback does not specifically violate federal or state laws and such kickbacks are made
to clients throughout the industry, the kickback may be normal, legal, and even tax deductible***
What is the act of falsifying W-2s, bank statements, and other records to meet the tougher income and
asset guidelines by lenders?
Money laundering
, Income and/or asset fraud
Fraud for profit
Racketeering - Answers -Income and/or asset fraud
***Income and/or asset fraud is an intentional misrepresentation of income and/or assets on a
mortgage loan application in order to qualify for a mortgage. Others lie about the assets that they have
available for the down payment. Unscrupulous borrowers are undaunted by the more stringent
requirements and try to circumvent the process by falsifying W-2s, bank statements, and other records
to meet the tougher income and asset guidelines lenders have adopted.***
____________________fraud is - Answers an intentional misrepresentation of income and/or assets on
a mortgage loan application in order to qualify for a mortgage. Others lie about the assets that they
have available for the down payment. Unscrupulous borrowers are undaunted by the more stringent
requirements and try to circumvent the process by falsifying W-2s, bank statements, and other records
to meet the tougher income and asset guidelines lenders have adopted.***
The most common fraudulent act committed by appraisers is to:
-falsify appraiser credentials.
-misuse MLS data.
-overvalue properties.
-undervalue properties. - Answers -overvalue properties.
***Inflating the value of a property is the most common fraudulent action made by appraisers.***
The practice of pushing a borrower into a loan agreement that is more beneficial to the lender than it is
to the borrowers is known as:
steering.
redlining.
adjudication.
stipulation. - Answers steering.
