Podcast
Questions and Answers
What is the primary goal of borrower education?
What is the primary goal of borrower education?
Which of the following is NOT typically included in homeownership counseling topics?
Which of the following is NOT typically included in homeownership counseling topics?
Why should MLOs encourage borrower education?
Why should MLOs encourage borrower education?
What is required from lenders after a borrower applies for a loan?
What is required from lenders after a borrower applies for a loan?
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What critical ethical consideration should MLOs keep in mind?
What critical ethical consideration should MLOs keep in mind?
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What should you do if you discover false information provided by a borrower?
What should you do if you discover false information provided by a borrower?
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Which of the following is NOT a responsibility in mortgage lending?
Which of the following is NOT a responsibility in mortgage lending?
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In giving full disclosure about mortgage loan terms, what should you NOT include?
In giving full disclosure about mortgage loan terms, what should you NOT include?
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What is an essential practice to demonstrate professionalism in mortgage lending?
What is an essential practice to demonstrate professionalism in mortgage lending?
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What is your fiduciary duty while serving clients in mortgage lending?
What is your fiduciary duty while serving clients in mortgage lending?
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Study Notes
Borrower Education Requirements
- Borrower education (Homeownership Counseling) is mandatory for Reverse Mortgages and HOEPA-defined high-cost mortgages.
- It's optional for most other mortgages, but lenders must provide a list of counseling organizations within three days of an application.
- Counseling helps borrowers understand the homebuying process, costs, and management.
- Mortgage Loan Originators (MLOs) should not discourage or suggest borrower education isn't necessary.
Topics Covered in Homeownership Counseling
- Pros and cons of homeownership
- Mortgage application and lender selection
- Debt ratios
- Upfront costs
- Home features
- Professionals involved in the process
- Maintenance aspects
- Fair housing regulations
Ethical Conduct for Mortgage Loan Originators
- Serve the public: Act with integrity representing your employer.
- Honesty: Never aid borrowers in providing inaccurate application information
- Correct false information: Immediately correct known false data from applicants or other parties.
- Fraud: Follow company procedures if fraud is suspected.
- Privacy: Protect clients' personal data from identity theft attempts or unauthorized disclosure.
- Equal treatment: Treat all individuals fairly.
- Full disclosure: Clearly state all loan terms.
- Limited product information: Give accurate details only regarding offered loan products.
- Loan requirements: Provide accurate information about property insurance only.
- Avoid unsolicited advice: Do not give advice on taxes, law, finances, or competitors.
- Fiduciary responsibility: Act in the best interest of clients.
- Product steering: Avoid directing clients to specific products.
- Documentation: Maintain thorough records to support professionalism and defend against accusations.
- Professional ethics: Adhere to ethical codes from organizations like the Mortgage Bankers Association or National Association of Mortgage Brokers.
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Description
This quiz covers the essential requirements and topics related to borrower education, particularly in the context of reverse mortgages and high-cost mortgages. It also discusses the responsibilities of Mortgage Loan Originators (MLOs) and the ethical conduct expected in the industry.
