Vandyk Mortgage's Equal Treatment And Fair Lending Exam
This is a quiz that asks different random questions that are designed to test your knowledge on how well you know tax computation and deduction terms. It might not be as easy as you think but just try it out to see how you will do.
Questions and Answers
- 1.
When the applicant mentioned the last lender did not like her neighborhood and suggested she try another source, they may have violated which of the following laws?
- A.
RESPA
- B.
FCRA
- C.
ECOA
- D.
HMDA
Correct Answer
C. ECOAExplanation
The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against applicants based on factors such as race, color, religion, national origin, sex, marital status, age, or the fact that the applicant receives public assistance. In this scenario, when the lender suggested the applicant try another source because they did not like her neighborhood, it implies that the lender may be discriminating against the applicant based on the neighborhood she lives in, which would be a violation of the ECOA.Rate this question:
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- 2.
The previous loan originator suggested the borrower apply with another lender because of her age. This is a clear violation of which Fair Lending Law?
- A.
Home Mortgage Disclosure Act
- B.
Truth in Lending Act
- C.
Equal Credit Opportunity Act
- D.
All of the above
Correct Answer
C. Equal Credit Opportunity ActExplanation
The correct answer is the Equal Credit Opportunity Act. This law prohibits lenders from discriminating against borrowers based on factors such as race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. In this case, the previous loan originator violated the law by suggesting the borrower apply with another lender solely because of her age.Rate this question:
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- 3.
Government monitoring questions are required to be asked under the Home Mortgage Disclosure Act. If the borrower chooses not to provide these answers and the application was taken face-to-face, what is the interviewer's responsibility?
- A.
Have the borrower sign a separate refusal form
- B.
Politely turn the loan down
- C.
Make a visual observation
- D.
Report the loan application as potential fraud
Correct Answer
C. Make a visual observationExplanation
Under the Home Mortgage Disclosure Act, government monitoring questions are mandatory to ask. If the borrower decides not to provide these answers during a face-to-face application, the interviewer's responsibility is to make a visual observation. This means that the interviewer should assess the borrower's race, ethnicity, and sex based on their appearance, and report this information accurately in the loan application.Rate this question:
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- 4.
A non-minority couple applies for a loan to purchase a home. The loan originator provides them with information on a number of loan programs to which they may be eligible. A minority couple also applies for a loan to purchase a home. The loan originator discusses only FHA financing. Is it discrimination?
- A.
Yes
- B.
No
Correct Answer
A. YesExplanation
The loan originator's behavior in discussing only FHA financing with the minority couple while providing information on multiple loan programs to the non-minority couple suggests discrimination. By limiting the options for the minority couple based on their race or ethnicity, the loan originator is treating them differently and denying them the same opportunities as the non-minority couple. This behavior is a form of discrimination and goes against fair lending practices.Rate this question:
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- 5.
“I think I look old for my age. I’m 21, but think I look 35.”
- A.
Yes
- B.
No
Correct Answer
B. NoExplanation
The person believes that they look older than their actual age. However, the answer "No" suggests that they do not look 35 years old at the age of 21.Rate this question:
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- 6.
“I am a member of the Church of Justin, a religious order founded on the premise that people named Justin have divine powers.”
- A.
Yes
- B.
No
Correct Answer
B. NoExplanation
The correct answer is "No" because the statement presents a belief in a religious order based solely on the premise that people named Justin have divine powers. This is not a logical or reasonable basis for a religious order, as it relies on a specific name rather than any spiritual or moral principles.Rate this question:
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- 7.
“I am married, but sometimes wish I was not.”
- A.
Yes
- B.
No
Correct Answer
B. NoExplanation
The statement "I am married, but sometimes wish I was not" indicates that the person has moments of dissatisfaction or regret about being married. The question asks whether this statement is true or not. By answering "No," it suggests that the person does not have these feelings of wishing they were not married.Rate this question:
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- 8.
“My Current income is all derived from social security payments.”
- A.
Yes
- B.
No
Correct Answer
B. NoExplanation
The statement implies that the person's current income is solely derived from social security payments. Since the answer is "No," it suggests that the person's current income is not solely derived from social security payments.Rate this question:
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- 9.
“I’m interested in a single payment loan, due in 13.5 Years.”
- A.
Yes
- B.
No
Correct Answer
A. YesExplanation
The answer is "Yes" because the person is expressing interest in a single payment loan that is due in 13.5 years. This indicates that they are open to the idea of taking out a loan with a single payment that needs to be repaid within a specific timeframe.Rate this question:
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- 10.
The following question applies to questions 5-10. Justin applies for a mortgage and he talks way too much. In his conversation with Loan Originator Tom, he shares several pieces of information. Determine whether or not Loan Originator Tom can consider the information or if he is prohibited from considering it."I have never had a checking account, credit card, or loan."
- A.
Yes
- B.
No
Correct Answer
A. YesExplanation
Loan Originator Tom can consider the information shared by Justin, which is "I have never had a checking account, credit card, or loan." This information is relevant to Justin's financial history and can be taken into consideration when evaluating his eligibility for a mortgage.Rate this question:
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- 11.
Applicant Patricia wants to buy a new ocean front, 5 bedroom, 11,000 square foot home. She meets with Loan Originator Jonathan to discuss applying for a mortgage. When Jonathan finds out what type of home she wants to buy he tells Patricia “You probably don’t make enough to afford that type of home. I wouldn’t even bother applying if I were you.”What should have Loan Originator Jonathan done instead?
- A.
Continued with the application process, but not bother processing the application.
- B.
Nothing, Jonathan did the right thing.
- C.
Continued with the application process as normal.
- D.
Suggest Patricia try for a less expense house, with a smaller loan sum.
Correct Answer
C. Continued with the application process as normal.Explanation
Loan Originator Jonathan should have continued with the application process as normal. It is not his place to determine whether or not Patricia can afford the home she wants to buy. His role is to assist her with the mortgage application and provide her with the necessary information and options. It is ultimately up to the lender to decide if Patricia qualifies for the loan based on her financial situation and creditworthiness. Jonathan's statement was unprofessional and inappropriate.Rate this question:
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- 12.
Jane applies with Loan Originator Jonathan for a $100,000 unsecured loan to buy a vacation home in Florida. After underwriting the loan it is determined that Jane’s income is not sufficient to meet the debt to income guidelines of the loan program. Loan Originator Jonathan tells Jane that her loan cannot be approved unless her husband co-signs for the loan.Does Loan Originator Jonathan have a problem?
- A.
Yes
- B.
No
Correct Answer
A. YesExplanation
Loan Originator Jonathan does have a problem. The problem is that Jane's income does not meet the debt to income guidelines of the loan program, which means she is not eligible for the loan. Jonathan suggests that Jane's husband co-signs for the loan, indicating that he is trying to find a solution to the problem. However, the fact that Jonathan needs a co-signer shows that there is an issue with Jane's loan application and her ability to meet the loan requirements on her own.Rate this question:
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- 13.
In the case of an applicant whose main source of income is Social Security Disability, it is perfectly acceptable for a lender to require more proof (than with other borrowers) that the income is going to continue, e.g. requiring a note from a Doctor stating that the disability is likely to continue for two years.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
In the case of an applicant whose main source of income is Social Security Disability, it is reasonable for a lender to require additional proof of the income's continuity. This is because Social Security Disability is subject to periodic reviews and may not be guaranteed to continue indefinitely. Requiring a note from a doctor stating that the disability is likely to continue for two years provides the lender with more assurance that the income will be sustained. Therefore, the statement is true.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 10, 2015Quiz Created by
Marisa
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