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Question 1 of 5

1. Question
An MLO interviews a borrower about long-term financial goals before recommending a loan product. What would be considered suitable unsolicited advice in this situation?
- A) Steering every borrower into the highest-rate loan available
- B) Explaining the lender’s loan product that best meets the borrower’s needs after discussing the borrower’s goals
- C) Refusing to discuss loan options with the borrower
- D) Selecting a loan program without asking questions about the borrower’s plans
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Question 2 of 5

2. Question
A borrower expects to move within a few years and asks whether a fixed-rate or ARM loan may be more appropriate. What type of guidance would generally be considered suitable advice?
- A) Recommending only fixed-rate loans regardless of circumstances
- B) Refusing to explain the differences between loan products
- C) Discussing whether a fixed-rate loan or ARM may better suit the borrower’s expected time in the home
- D) Advising the borrower to ignore future housing plans
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Question 3 of 5

3. Question
During the loan application process, a consumer asks for clarification regarding disclosures and processing steps. What would generally be considered an appropriate practice by the lender?
- A) Avoid explaining disclosures to reduce liability
- B) Provide clear information about the loan process and review required disclosures with the borrower
- C) Delay communication until closing day
- D) Require the borrower to research all disclosures independently
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Question 4 of 5

4. Question
An MLO gives loan advice to a consumer based on the consumer’s financial circumstances and housing plans. Under the guidance discussed on this page, what characteristic should the advice have?
- A) The advice should maximize lender profits only
- B) The advice should avoid discussing the borrower’s circumstances
- C) The advice should be suitable and take account of the consumer’s circumstances
- D) The advice should always favor adjustable-rate mortgages
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Question 5 of 5

5. Question
A non-affiliated third party requests nonpublic personal information about a borrower from a financial institution. Under the Gramm-Leach-Bliley Act, what must generally occur before the information is disclosed?
- A) The borrower must automatically approve the disclosure in writing after closing
- B) The financial institution may disclose the information immediately without notice
- C) The consumer must be given the opportunity to direct that the information not be disclosed before the disclosure occurs
- D) The information may only be disclosed if the borrower has perfect credit
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