Ethics
What this domain tests
Ethics questions test integrity, fair lending, privacy, conflicts of interest, and fraud reporting. The correct answer is usually the consumer-protective choice, not the fastest or most profitable one.
Core rules
- Fair lending: Apply consistent standards and do not discriminate based on protected classes. Document any exception to guidelines and the business reason for it.
- Fraud: Never inflate income, assets, occupancy, or appraised value. Never alter documents. Report suspected fraud to the appropriate internal or regulatory channel.
- Referrals: RESPA Section 8 prohibits kickbacks and unearned fees. Marketing service agreements must pay for bona fide services at reasonable value, not for referrals.
- Privacy: GLBA requires safeguarding nonpublic personal information. Do not share borrower data without authorization or a lawful exception.
- Conflicts: Disclose affiliate relationships and avoid steering borrowers to an affiliate for an undisclosed benefit.
Worked example
A real estate agent offers $500 for every closed loan sent to you. Accepting would be a thing of value for a referral of settlement service business, which violates RESPA Section 8. The correct response is to decline, explain the prohibition, and continue serving the buyer without the payment arrangement.
Traps
Calling a kickback a marketing fee; using borrower information for unauthorized marketing; agreeing to withhold adverse information; making guideline exceptions without documentation; retaliating against someone who reports misconduct.