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Question 1 of 9

1. Question
A lender advertises a mortgage product and states that credit disability insurance is included at no cost when, in fact, an additional charge applies. What advertising issue is present?
- A) Misrepresentation of the existence, cost, or terms of an additional product or feature
- B) Misrepresentation of a prepayment penalty
- C) Misrepresentation of required payments
- D) Misrepresentation of the potential for default
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Question 2 of 9

2. Question
A mortgage advertisement states that property taxes and homeowners insurance are included in the monthly payment, but the borrower must actually pay them separately. What has been misrepresented?
- A) The type of mortgage product
- B) The terms or payment requirements relating to taxes or insurance
- C) The amount of cash available
- D) The existence of a prepayment penalty
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Question 3 of 9

3. Question
A lender advertises a mortgage as having no prepayment penalty even though a penalty applies during the first three years of the loan. What has been misrepresented?
- A) The type of mortgage product
- B) The variability of the interest rate
- C) The existence or terms of a prepayment penalty
- D) The amount of available cash
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Question 4 of 9

4. Question
An advertisement describes a mortgage as a fixed-rate loan, but the interest rate adjusts after five years. What has been misrepresented?
- A) The amount of available credit
- B) The payment of taxes and insurance
- C) The existence of a prepayment penalty
- D) The variability of interest, payments, or other loan terms
Correct

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Question 5 of 9

5. Question
A mortgage advertisement compares a low introductory payment that lasts only one year to a payment that appears to apply for the entire loan term. What advertising concern exists?
- A) A misleading comparison between a temporary rate or payment and another actual or hypothetical rate or payment
- B) A failure to identify the loan originator's employer
- C) A failure to retain the advertisement for 24 months
- D) A misrepresentation about the borrower's credit score
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Question 6 of 9

6. Question
A lender advertises a mortgage as fully amortizing even though the product includes features that may prevent the loan from fully amortizing as advertised. What has been misrepresented?
- A) The timing of the advertising record retention period
- B) The type of mortgage credit product
- C) The identity of the federal regulator
- D) The source of the consumer's down payment
Correct

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Question 7 of 9

7. Question
A mortgage advertisement promises that consumers will receive a specific amount of cash at closing, even though the amount depends on loan terms and borrower qualifications. What has been misrepresented?
- A) The cost of credit disability insurance
- B) The payment of property taxes
- C) The amount of the obligation or the cash or credit available to the consumer
- D) The use of the word fixed
Correct

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Question 8 of 9

8. Question
A reverse mortgage advertisement states that no payments are ever required, without explaining that certain obligations may still have to be met. What has been misrepresented?
- A) The identity of the mortgage servicer
- B) The APR disclosure requirement
- C) The length of time advertising records must be retained
- D) The existence, number, amount, or timing of minimum or required payments
Correct

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Question 9 of 9

9. Question
A lender advertises that a borrower can never default under a reverse mortgage, even if taxes, insurance, maintenance, or other loan obligations are not met. What has been misrepresented?
- A) The potential for default under the mortgage credit product
- B) The availability of credit disability insurance
- C) The timing of the company's internal Do-Not-Call list
- D) The requirement to advertise the APR
Correct

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