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Question 1 of 10

1. Question
A mortgage advertisement promotes a loan with a 3.50% rate when the actual APR is substantially higher and the advertisement fails to explain the difference. What has been misrepresented?
- A) The annual percentage rate or other rate associated with the mortgage
- B) The existence of a prepayment penalty
- C) The amount of available cash
- D) The existence of required payments
Correct

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Question 2 of 10

2. Question
A lender advertises No Fees even though borrowers must pay origination and processing charges at closing. What has been misrepresented?
- A) The type of mortgage product
- B) The existence, nature, or amount of fees or costs associated with the mortgage
- C) The amount of cash available
- D) The potential for default
Correct

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Question 3 of 10

3. Question
A mortgage company advertises free credit disability insurance with every loan even though the insurance requires an additional premium. What has been misrepresented?
- A) The variability of interest rates
- B) The amount of available credit
- C) The existence, cost, or terms of an additional product or feature
- D) The type of mortgage product
Correct

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Question 4 of 10

4. 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 amount of available cash
- B) The prepayment penalty
- C) The type of mortgage product
- D) The terms or payment requirements relating to taxes or insurance
Correct

Incorrect
Question 5 of 10

5. Question
A lender advertises that a loan has no prepayment penalty even though a penalty applies during the first three years. What has been misrepresented?
- A) The existence or terms of a prepayment penalty
- B) The amount of available cash
- C) The annual percentage rate
- D) The timing of required payments
Correct

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Question 6 of 10

6. Question
An advertisement repeatedly describes a mortgage as fixed even though the interest rate adjusts after five years. What has been misrepresented?
- A) The amount of available credit
- B) The variability of interest, payments, or other loan terms
- C) The type of mortgage product
- D) The amount of required insurance
Correct

Incorrect
Question 7 of 10

7. Question
A mortgage advertisement compares a one-year introductory payment to a payment that appears to apply for the entire loan term. What advertising concern exists?
- A) A misleading comparison involving a temporary rate or payment
- B) A failure to disclose the lender's address
- C) A failure to maintain records
- D) A failure to disclose licensing information
Correct

Incorrect
Question 8 of 10

8. Question
A lender advertises a loan as fully amortizing even though the product contains features that may prevent full amortization. What has been misrepresented?
- A) The amount of available cash
- B) The prepayment penalty
- C) The type of mortgage credit product
- D) The existence of required payments
Correct

Incorrect
Question 9 of 10

9. Question
A mortgage advertisement guarantees that every borrower will receive $50,000 cash at closing regardless of qualifications. What has been misrepresented?
- A) The variability of interest rates
- B) The existence, nature, or amount of cash or credit available
- C) The timing of required payments
- D) The amount of insurance required
Correct

Incorrect
Question 10 of 10

10. Question
A reverse mortgage advertisement states that borrowers can never default and will never have any payment-related obligations. What has been misrepresented?
- A) The amount of available cash
- B) The type of mortgage product
- C) The existence, amount, timing of required payments and the potential for default
- D) The annual percentage rate
Correct

Incorrect

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