36 Questions
What is a code of ethics?
A document outlining the mission and values of a business or organization
Which values are fundamental to the mortgage brokering industry?
Honesty, integrity, and justice
What must the mortgage professional be actively committed to?
Full disclosure
Why are honesty, integrity, and justice important in the industry?
To nourish trust with clients
What should the professional disclose to all appropriate parties to a mortgage transaction?
Any real or perceived conflicts of interest
What should ensuring you understand what is happening around you and the consequences of your actions result in?
Full disclosure and ethical behavior
What are the potential consequences of charging borrowing fees in an unethical manner?
The borrower may face criminal charges
What is required of mortgage brokerages in Ontario regarding fee disclosure?
To disclose any remuneration payable to the brokerage and its brokers and agents
What must a brokerage disclose in writing to a borrower in Ontario?
Any advance payment or deposit for services to be rendered
What is a potential consequence of a borrower missing a mortgage payment?
The lender will charge the borrower a late fee
What is typically required for most private lenders before approving a mortgage?
An appraisal of the property completed within the past 12 months
In what scenario might an appraisal cost more than $1,000?
If the value of the home is higher than $1M
What is the consequence of charging borrowers incorrect or unreasonable amounts for late fees?
The borrower may face financial hardship
What must mortgage brokerages disclose in connection with the mortgage?
The nature of non-monetary benefits received from referrals
What is a potential consequence if a brokerage fails to disclose any fees payable to them for their services?
The borrower may face criminal charges
What must mortgage brokerages provide disclosure of in connection with the mortgage?
Referral fees and remuneration paid to others by the brokerage
What must be disclosed in writing to a borrower in relation to referral fees for simple referrals?
Fees for services rendered by non-licensed businesses
When can a brokerage require a borrower to make an advance payment or deposit for services to be rendered?
When the principal amount of the mortgage is $400,000 or less
What is one of the requirements for regulated persons and entities in providing products and services?
Exercising care, due diligence, and sound judgment
What is a key element of the requirement for honesty for regulated persons and entities?
Conducting activities truthfully and transparently
What is a requirement for regulated persons in terms of their skills and knowledge?
Having and maintaining the necessary skills, knowledge, and aptitudes
What must regulated persons do in relation to the suitability of products/services for their clients?
Take reasonable steps to present suitable products/services for their clients
What is a requirement related to disclosure for regulated persons and entities?
Fully disclose material information to appropriate parties in a transaction
What should regulated persons and entities do in relation to the management of conflict of interest?
Identify and disclose actual, potential, and/or perceived conflicts of interest
What is a requirement related to security and confidentiality for regulated persons and entities?
Protect clients' information and use/disclose it only with consent or as compelled by law
What is expected of regulated persons and entities in terms of ethical conduct?
Act ethically, with integrity, and respect; foster a culture of compliance
What is the expectation from regulated persons and entities in terms of cooperation with regulators?
Cooperate with mortgage brokering regulators; report possible violations of laws, regulations, or code
What is the importance of applying ethical practices in completing disclosures during a mortgage application?
To ensure smooth, legal, and transparent processes; build strong relationships with lenders/investors
What are some potential consequences if a client commits mortgage fraud?
The lender could cancel the loan; reputational risks for associated agents/brokers/brokerage
What is a requirement related to disclosure regarding private mortgages?
Providing written disclosures about fees, role, conflicts of interest, remuneration, referrals, total cost of borrowing, material risks
What is the purpose of full disclosure in the mortgage industry?
To create an atmosphere for fair and objective dealings with the client
Which of the following best describes the Utilitarian Approach to ethical decisions?
It instructs to weigh the potential level of various good and bad consequences of actions
What does an ethical dilemma occur when?
Core values conflict with one another
What is the purpose of testing for right vs. right paradigms in ethical decision making?
To determine if core values are conflicting with each other
What does a Code of Ethics govern?
Decision-making
According to the text, what does an ethical dilemma occur when our core values do?
Present in two or more possible choices and contradict each other
Test your knowledge of professional standards in regulated industries with this quiz. Explore concepts such as accountability, honesty, and competence as they apply to regulated persons and entities.
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