Module 8 - Ethics
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Questions and Answers

What is a code of ethics?

  • A set of regulations for the mortgage brokering sector
  • A document outlining the mission and values of a business or organization (correct)
  • A guide for managing conflicts of interest
  • A system for tracking mortgage transactions
  • Which values are fundamental to the mortgage brokering industry?

  • Loyalty, obedience, and discipline
  • Honesty, integrity, and justice (correct)
  • Secrecy, deception, and manipulation
  • Profit, efficiency, and competition
  • What must the mortgage professional be actively committed to?

  • Concealing conflicts of interest
  • Promoting personal interests
  • Full disclosure (correct)
  • Withholding material information
  • Why are honesty, integrity, and justice important in the industry?

    <p>To nourish trust with clients</p> Signup and view all the answers

    What should the professional disclose to all appropriate parties to a mortgage transaction?

    <p>Any real or perceived conflicts of interest</p> Signup and view all the answers

    What should ensuring you understand what is happening around you and the consequences of your actions result in?

    <p>Full disclosure and ethical behavior</p> Signup and view all the answers

    What are the potential consequences of charging borrowing fees in an unethical manner?

    <p>The borrower may face criminal charges</p> Signup and view all the answers

    What is required of mortgage brokerages in Ontario regarding fee disclosure?

    <p>To disclose any remuneration payable to the brokerage and its brokers and agents</p> Signup and view all the answers

    What must a brokerage disclose in writing to a borrower in Ontario?

    <p>Any advance payment or deposit for services to be rendered</p> Signup and view all the answers

    What is a potential consequence of a borrower missing a mortgage payment?

    <p>The lender will charge the borrower a late fee</p> Signup and view all the answers

    What is typically required for most private lenders before approving a mortgage?

    <p>An appraisal of the property completed within the past 12 months</p> Signup and view all the answers

    In what scenario might an appraisal cost more than $1,000?

    <p>If the value of the home is higher than $1M</p> Signup and view all the answers

    What is the consequence of charging borrowers incorrect or unreasonable amounts for late fees?

    <p>The borrower may face financial hardship</p> Signup and view all the answers

    What must mortgage brokerages disclose in connection with the mortgage?

    <p>The nature of non-monetary benefits received from referrals</p> Signup and view all the answers

    What is a potential consequence if a brokerage fails to disclose any fees payable to them for their services?

    <p>The borrower may face criminal charges</p> Signup and view all the answers

    What must mortgage brokerages provide disclosure of in connection with the mortgage?

    <p>Referral fees and remuneration paid to others by the brokerage</p> Signup and view all the answers

    What must be disclosed in writing to a borrower in relation to referral fees for simple referrals?

    <p>Fees for services rendered by non-licensed businesses</p> Signup and view all the answers

    When can a brokerage require a borrower to make an advance payment or deposit for services to be rendered?

    <p>When the principal amount of the mortgage is $400,000 or less</p> Signup and view all the answers

    What is one of the requirements for regulated persons and entities in providing products and services?

    <p>Exercising care, due diligence, and sound judgment</p> Signup and view all the answers

    What is a key element of the requirement for honesty for regulated persons and entities?

    <p>Conducting activities truthfully and transparently</p> Signup and view all the answers

    What is a requirement for regulated persons in terms of their skills and knowledge?

    <p>Having and maintaining the necessary skills, knowledge, and aptitudes</p> Signup and view all the answers

    What must regulated persons do in relation to the suitability of products/services for their clients?

    <p>Take reasonable steps to present suitable products/services for their clients</p> Signup and view all the answers

    What is a requirement related to disclosure for regulated persons and entities?

    <p>Fully disclose material information to appropriate parties in a transaction</p> Signup and view all the answers

    What should regulated persons and entities do in relation to the management of conflict of interest?

    <p>Identify and disclose actual, potential, and/or perceived conflicts of interest</p> Signup and view all the answers

    What is a requirement related to security and confidentiality for regulated persons and entities?

    <p>Protect clients' information and use/disclose it only with consent or as compelled by law</p> Signup and view all the answers

    What is expected of regulated persons and entities in terms of ethical conduct?

    <p>Act ethically, with integrity, and respect; foster a culture of compliance</p> Signup and view all the answers

    What is the expectation from regulated persons and entities in terms of cooperation with regulators?

    <p>Cooperate with mortgage brokering regulators; report possible violations of laws, regulations, or code</p> Signup and view all the answers

    What is the importance of applying ethical practices in completing disclosures during a mortgage application?

    <p>To ensure smooth, legal, and transparent processes; build strong relationships with lenders/investors</p> Signup and view all the answers

    What are some potential consequences if a client commits mortgage fraud?

    <p>The lender could cancel the loan; reputational risks for associated agents/brokers/brokerage</p> Signup and view all the answers

    What is a requirement related to disclosure regarding private mortgages?

    <p>Providing written disclosures about fees, role, conflicts of interest, remuneration, referrals, total cost of borrowing, material risks</p> Signup and view all the answers

    What is the purpose of full disclosure in the mortgage industry?

    <p>To create an atmosphere for fair and objective dealings with the client</p> Signup and view all the answers

    Which of the following best describes the Utilitarian Approach to ethical decisions?

    <p>It instructs to weigh the potential level of various good and bad consequences of actions</p> Signup and view all the answers

    What does an ethical dilemma occur when?

    <p>Core values conflict with one another</p> Signup and view all the answers

    What is the purpose of testing for right vs. right paradigms in ethical decision making?

    <p>To determine if core values are conflicting with each other</p> Signup and view all the answers

    What does a Code of Ethics govern?

    <p>Decision-making</p> Signup and view all the answers

    According to the text, what does an ethical dilemma occur when our core values do?

    <p>Present in two or more possible choices and contradict each other</p> Signup and view all the answers

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