1 (UPDATED:NMLS - ProSchools - National Mortgage Exam Prep - Ethics and Consumer Protection Topics (V1.2): 2026 - 2027 VERIFIED STUDY GUIDE).
!!!!!!!!!!!!!!
NMLS - ProSchools - National Mortgage Exam Prep - Ethics and Consume
Protection Topics (V1.2)
Study online at https://quizlet.com/_3vtrqk
1. Laws and regulations define the min-
imum type and
define the minimum type and level of conduct practi- level of conduct
tioners may use without penalty from society. practitioners may
define the maximum type and level of conduct to use without penal-
which practitioners are held. ty from society.
are generally subject to dispute.
do not overlap with ethics.
2. The principal-agent problem is related to the relative lack of
consequences of
discrimination in hiring minorities for positions in the the loan transac-
mortgage industry. tion for a lender's
the relative lack of consequences of the loan trans- agent.
action for a lender's agent.
conflicts between real estate professionals and mort-
gage professionals.
lack of sufficient prelicensing education for mortgage
licensees.
3. Moral and ethical principles are often not as
extend up to the legal standards to provide guidance clear-cut as legal
for one's actions. rules.
go into the realm of what must be done.
are often not as clear-cut as legal rules.
create lesser demands than required by the law.
4. A loan originator is discussing the features of a home not permissible, as
equity consolidation loan with an applicant. In doing the loan originator
so, he relates to the applicant that the interest on the is not qualified to
loan is tax deductible. This is provide tax advice.
permissible, as the interest on any loan secured by
real estate is tax deductible.
not permissible, as the loan originator is not qualified
to provide tax advice.
not permissible, as the advice is wrong.
permissible, as the interest on any home equity loan
is tax deductible.
2026/04/06 4/6/2026, 6:29:41 PM 4/6/2026, 6:29:38 PM
, 2 (UPDATED:NMLS - ProSchools - National Mortgage Exam Prep - Ethics and Consumer Protection Topics (V1.2): 2026 - 2027 VERIFIED STUDY GUIDE).
!!!!!!!!!!!!!!
NMLS - ProSchools - National Mortgage Exam Prep - Ethics and Consume
Protection Topics (V1.2)
Study online at https://quizlet.com/_3vtrqk
5. Unlike other parties to a mortgage transaction, in the mortgage bro-
general, ________ have no long-term interest in the ker and mortgage
performance of the loan. loan originator
the borrower and lender
the lender and mortgage broker
the mortgage broker and mortgage loan originator
the borrower and mortgage loan originator
6. Establishing requirements for credit reporting is covered by fed-
is covered by federal law, including the Fair Credit eral law, including
Reporting Act. the Fair Credit Re-
is not required by law, and must be carried out by porting Act.
individual lenders for ethical practice.
is not an issue in regard to mortgage lending.
is covered by state law only.
7. Is a mortgage broker considered to be an agent of the Only in some
borrower? states; in others
Yes, always this is not the case
No, never
Only if a written agency agreement has been signed
Only in some states; in others this is not the case
8. Packing is a predatory lending practice which con- including in the
sists of loan principal
amount such costs
targeting a person with limited access to mainstream as points and
sources of credit and using deceptive practices to get mortgage bro-
them to accept a predatory loan. ker fees without
including in the loan principal amount such costs as the borrower's in-
points and mortgage broker fees without the borrow- formed consent.
er's informed consent.
making a loan based on the borrower's home equity
and the foreclosure value of the collateral.
repeated refinancing of a loan within a short period
of time, without any real benefit to the borrower.
2026/04/06 4/6/2026, 6:29:41 PM 4/6/2026, 6:29:38 PM
!!!!!!!!!!!!!!
NMLS - ProSchools - National Mortgage Exam Prep - Ethics and Consume
Protection Topics (V1.2)
Study online at https://quizlet.com/_3vtrqk
1. Laws and regulations define the min-
imum type and
define the minimum type and level of conduct practi- level of conduct
tioners may use without penalty from society. practitioners may
define the maximum type and level of conduct to use without penal-
which practitioners are held. ty from society.
are generally subject to dispute.
do not overlap with ethics.
2. The principal-agent problem is related to the relative lack of
consequences of
discrimination in hiring minorities for positions in the the loan transac-
mortgage industry. tion for a lender's
the relative lack of consequences of the loan trans- agent.
action for a lender's agent.
conflicts between real estate professionals and mort-
gage professionals.
lack of sufficient prelicensing education for mortgage
licensees.
3. Moral and ethical principles are often not as
extend up to the legal standards to provide guidance clear-cut as legal
for one's actions. rules.
go into the realm of what must be done.
are often not as clear-cut as legal rules.
create lesser demands than required by the law.
4. A loan originator is discussing the features of a home not permissible, as
equity consolidation loan with an applicant. In doing the loan originator
so, he relates to the applicant that the interest on the is not qualified to
loan is tax deductible. This is provide tax advice.
permissible, as the interest on any loan secured by
real estate is tax deductible.
not permissible, as the loan originator is not qualified
to provide tax advice.
not permissible, as the advice is wrong.
permissible, as the interest on any home equity loan
is tax deductible.
2026/04/06 4/6/2026, 6:29:41 PM 4/6/2026, 6:29:38 PM
, 2 (UPDATED:NMLS - ProSchools - National Mortgage Exam Prep - Ethics and Consumer Protection Topics (V1.2): 2026 - 2027 VERIFIED STUDY GUIDE).
!!!!!!!!!!!!!!
NMLS - ProSchools - National Mortgage Exam Prep - Ethics and Consume
Protection Topics (V1.2)
Study online at https://quizlet.com/_3vtrqk
5. Unlike other parties to a mortgage transaction, in the mortgage bro-
general, ________ have no long-term interest in the ker and mortgage
performance of the loan. loan originator
the borrower and lender
the lender and mortgage broker
the mortgage broker and mortgage loan originator
the borrower and mortgage loan originator
6. Establishing requirements for credit reporting is covered by fed-
is covered by federal law, including the Fair Credit eral law, including
Reporting Act. the Fair Credit Re-
is not required by law, and must be carried out by porting Act.
individual lenders for ethical practice.
is not an issue in regard to mortgage lending.
is covered by state law only.
7. Is a mortgage broker considered to be an agent of the Only in some
borrower? states; in others
Yes, always this is not the case
No, never
Only if a written agency agreement has been signed
Only in some states; in others this is not the case
8. Packing is a predatory lending practice which con- including in the
sists of loan principal
amount such costs
targeting a person with limited access to mainstream as points and
sources of credit and using deceptive practices to get mortgage bro-
them to accept a predatory loan. ker fees without
including in the loan principal amount such costs as the borrower's in-
points and mortgage broker fees without the borrow- formed consent.
er's informed consent.
making a loan based on the borrower's home equity
and the foreclosure value of the collateral.
repeated refinancing of a loan within a short period
of time, without any real benefit to the borrower.
2026/04/06 4/6/2026, 6:29:41 PM 4/6/2026, 6:29:38 PM
