Ethics Flashcards
(26 cards)
Under RESPA referrer can only receive compensation only if
When provider is an associate as defined by RESPA
What is an associate
Defined as a parent , spouse, or child in position to refer business.
Redlining
Failing to lend to certain geographic areas or segments of population
Reverse Redlining
Refers to someone targeting an under served group (taking advantage of them
2 types of Fraud
- Fraud for profit - think insider
- Fraud for housing - think consumer
Ethic
Refers to actions we take and decisions we make that reflect that system of beliefs
Morality
System of beliefs or values which help us decide right and wrong
Steering
Pushing a client into a transaction that makes more sense for your wallet then client long term interest
Packing
Placing unrelated and unwanted insurance in the loan and causing the borrower to pay for it from proceeds
Fraud
Intentional use of deceit that deprives someone of money ,property or legal right
Where to report Fraud
-HUD Inspector General on Govt Loans
-FBI for all others
SARS
Suspicious Activity Report a compiled report on mortgage fraud
What action should an MLO take if during a refinance involving a mother and son the MLO gets the feeling the mother is hesitant about the refinance?
a.) Ignore the situation as it may be a family matter
b.) Pull the mother aside to discuss
c.) Refer the transaction to the AML (Anti Money Laundering) department
d.) Pull the son aside to discuss
A.
**Because they have the right to rescind
A young couple is applying for a loan for a new home purchase. A portion of their down payment is a loan from a Grandparent for $25,000. The money was already given to them and placed in their account three months prior to the loan application. The loan payments won’t start for one year, how should the $25,000 be reported on the mortgage application?
A. Asset
B. A Liability
C. Gift of funds
D. Not reported at all
B.
An MLO takes an application and becomes suspicious of the applicants Soc Sec. #; what should the MLO do?
(A) contact the police
(B) deny loan
(C) call soc sec admin and verify Soc Sec #
(D) wait to see if there is any more suspicious activity
D.
MLO went on a vacation and had her LOA (Loan Originator assistant) meet with her client. When the MLO came back it was found that the LOA was signing documents as the MLO, turns out this practice was happening often and with MLO’s permission. What should be done immediately?
a.) Terminate the MLO
b.) Terminate LOA
c.) Report to authorities
d.) Terminate both
D.
when you terminate anyone you have to report to NMLS/State why terminated within 30 days as required under the SAFE Act
Should an MLO notify their UW (Underwriter) if their client tells the MLO they are getting a
small pay cut?
Yes
Max Penalty for committing fraud?
30 years and / or 1m fine
Straw Buyer
Person who is used as a cover to hide true identity of the buyer
Loan Flipping
Involves an appraiser and a group of people who buy and resell to each other at inflated prices and ultimately to another poor person
Chunking
When 3rd party convinces a borrower to invest in a property with no money down and with 3rd party acting as agent and retains the loan proceeds, leaving the borrower with multiple loans that cant be repaid
Air loan
A loan on a fake home that does not exist on the land
Shot gunning
Doing multiple loans on the property with multiple lenders all at the same time.
Usury
Charging a borrower a rate above the legally set rate
