Your FREE MLO Flashcards 2026 – 250+ Cards

The federal law (Regulation Z) requiring lenders to disclose the cost of credit — the finance charge and the APR — so consumers can compare loans.

The Federal Reserve/CFPB regulation that implements the Truth in Lending Act (TILA).

The total yearly cost of a mortgage expressed as a rate — interest plus points and most finance-charge fees. It lets borrowers compare loans on equal terms.

Under TILA, the total dollar cost of credit to the borrower — interest plus most loan fees (origination, points, mortgage insurance, etc.).

Under TILA, the borrower's right to cancel certain transactions secured by their principal dwelling (e.g., a refinance or home-equity loan) within three business days, with no penalty.

Three business days, counting Saturdays but not Sundays or federal holidays. It does not apply to a purchase-money loan on the home.

The federal law (Regulation X) governing settlement services — it bans kickbacks and unearned fees and requires certain mortgage disclosures.

The CFPB regulation that implements RESPA, covering settlement disclosures, servicing, and the kickback prohibition (Section 8).

Prohibits kickbacks, referral fees, and unearned fees for the referral of settlement-service business in a federally related mortgage loan.

The federal fair-lending law (Regulation B) prohibiting credit discrimination based on a protected class.

Race, color, religion, national origin, sex, marital status, age, receipt of public assistance income, and exercising rights under consumer-credit laws.

The CFPB regulation implementing ECOA — it bars discrimination and requires an adverse-action notice when credit is denied.

Under ECOA/Reg B, the notice a creditor must give when it denies, terminates, or changes credit terms — stating the reasons or how to get them.

The federal law (Regulation C) requiring lenders to collect and report data on mortgage applications and loans to help detect discriminatory lending.

The CFPB regulation implementing HMDA, governing the loan/application register (LAR) data lenders report.

Applicant/borrower demographics (race, ethnicity, sex), income, loan amount, property location, and the action taken on the application.

The federal law (Regulation V) governing consumer-report accuracy, privacy, and use — including credit reports used in underwriting.

Consumers are entitled to one free credit report every 12 months from each of the three nationwide bureaus (Equifax, Experian, TransUnion).

The federal law requiring financial institutions to explain their information-sharing practices and safeguard customers' nonpublic personal information.

The disclosure GLBA requires institutions to give customers describing how their nonpublic personal information is collected, shared, and protected.

An amendment to TILA targeting high-cost mortgages — it triggers extra disclosures and bans certain predatory terms when APR or points-and-fees exceed thresholds.

A loan whose APR or points-and-fees exceed HOEPA thresholds; it requires special disclosures and prohibits balloon payments, prepayment penalties, and other abusive terms.

The 2010 reform law that created the CFPB and added the Ability-to-Repay rule, loan-originator compensation limits, and anti-predatory-lending protections.

The federal agency created by Dodd-Frank that writes and enforces most federal mortgage rules (TILA, RESPA, ECOA, HMDA, etc.).

A Reg Z rule requiring lenders to make a reasonable, good-faith determination that a borrower can repay a mortgage before extending it.

Income/assets, employment, the monthly mortgage payment, payments on other loans on the property, taxes/insurance/assessments, other debts, the DTI ratio, and credit history.

A loan that meets Ability-to-Repay standards and product-feature limits, giving the lender liability protection; QM caps points and fees at 3% of the loan amount.

Generally 3% of the loan amount (for loans of $100,000 or more); lower-balance loans use a tiered, higher percentage.

The rule that merged TILA and RESPA disclosures into the Loan Estimate and Closing Disclosure (the 'Know Before You Owe' forms).

The TRID disclosure given within three business days of application, showing estimated interest rate, monthly payment, closing costs, and key loan terms.

The TRID disclosure of final loan terms and costs that the borrower must receive at least three business days before consummation (closing).

The CFPB initiative behind TRID — designed to make mortgage costs clearer and easier to compare via the Loan Estimate and Closing Disclosure.

Requires flood insurance for a mortgage secured by improved property in a FEMA Special Flood Hazard Area within a participating community.

A FEMA-designated high-risk flood zone; federally related loans on property there require flood insurance.

A rule prohibiting deceptive claims in mortgage advertising (e.g., misrepresenting rates, fees, or government affiliation).

A creditor generally may not require a spouse's signature if the applicant qualifies individually under the creditor's standards.

Under RESPA, the servicer must notify the borrower in advance when servicing of the loan is sold or transferred to another company.

An account the servicer holds to pay the borrower's property taxes and insurance; RESPA limits how much cushion a servicer may collect.

Amended TILA to require early disclosures and waiting periods before closing — now carried out through the TRID timing rules.

A Reg Z rule barring an originator's pay from being based on a loan's terms (like the interest rate) and barring 'dual compensation.'

When a settlement provider refers business to an affiliate it has an interest in; allowed only with written disclosure, no required use, and no illegal fee.

The dollar amount by which a disclosed APR or finance charge may differ from the actual figure before the disclosure is considered inaccurate.

The privacy rule (under GLBA) governing how financial institutions share consumers' nonpublic personal information and provide opt-out rights.

A loan whose APR exceeds the average prime offer rate by a set margin; it triggers an escrow requirement and an appraisal rule under Reg Z.

Dodd-Frank restricts negative-amortization features and requires consumer disclosure and, for first-time buyers, homeownership counseling.

TILA/Reg Z rules prohibiting coercion of appraisers and requiring valuations be free from improper influence.

A loan is a HOEPA high-cost mortgage if its APR, points and fees, or prepayment penalty exceed set thresholds; it then requires extra disclosures and bans certain terms.

The LO compensation rule bars steering a borrower to a loan that pays the originator more; the LO must present competitive options the borrower qualifies for.

TILA/Reg Z's mortgage rules apply to consumer credit secured by a dwelling, including the right of rescission and APR/finance-charge disclosure.

Under ECOA/Reg B, a creditor must send an adverse-action notice generally within 30 days of receiving a completed application or taking adverse action.

RESPA requires a servicing-transfer notice when a loan's servicing is sold or transferred, telling the borrower where to send payments.

The Home Mortgage Disclosure Act requires lenders to collect and report application data so regulators can detect discriminatory or predatory lending patterns.

An FCRA/FACTA rule requiring financial institutions to have a written program to detect, prevent, and mitigate identity theft 'red flags.'

The federal law giving electronic signatures and records the same legal effect as paper, provided the consumer consents to electronic delivery.

RESPA limits a servicer's escrow cushion to no more than two months of escrow payments (about one-sixth of annual disbursements).

The finance charge is the total dollar cost of credit: interest plus most loan fees such as origination, points, and required mortgage insurance.

An HPML exceeds an APR threshold over the average prime offer rate (escrow + appraisal rules); a high-cost (HOEPA) loan crosses stricter limits with more protections.

The Consumer Financial Protection Bureau writes and enforces most federal mortgage rules (TILA, RESPA, ECOA, HMDA, TRID) and supervises lenders.

The federal law governing PMI on most loans: automatic termination at 78% LTV of original value, and borrower-requested cancellation at 80%.

The Bank Secrecy Act requires covered lenders to maintain an AML program and file Suspicious Activity Reports for suspected fraud or laundering.

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 — the federal law creating a nationwide system for licensing and registering mortgage loan originators.

To increase accountability and consumer protection by setting minimum standards for licensing/registering MLOs and creating a national database (NMLS).

The Nationwide Multistate Licensing System and Registry — the system of record for licensing and registering mortgage loan originators, operated by CSBS.

The organization that, with state regulators, operates the NMLS.

The permanent ID number assigned to each MLO; it must appear on loan documents and lets consumers look the originator up.

The free public website where a borrower can verify an MLO's or company's license status and history using the NMLS unique identifier.

State-licensed MLOs (at non-depository lenders) must pass the test and meet state requirements; registered MLOs (at federally insured depositories) register in NMLS but are exempt from the test/state license.

An individual who, for compensation or gain, takes a residential mortgage loan application or offers/negotiates terms of a residential mortgage loan.

The federal minimum SAFE pre-licensing course: 3 hrs federal law, 3 hrs ethics, 2 hrs nontraditional mortgage lending, and 12 hrs of electives.

The 3-hour ethics portion of the SAFE course must cover fraud, consumer protection, and fair-lending issues.

To be licensed, an MLO must pass the SAFE MLO National Test with a score of at least 75%.

Eight hours each year: 3 hrs federal law, 2 hrs ethics (fraud/consumer protection/fair lending), 2 hrs nontraditional mortgage lending, and 1 hr elective.

Licenses are renewed through NMLS each year during the November 1 – December 31 renewal period; an unrenewed license expires.

After failing, a candidate must wait 30 days before each of the first three retakes; after three consecutive failures, the wait is 180 days.

A passing score on the SAFE MLO National Test is 75% or higher (a candidate must answer at least 75% of scored questions correctly).

An MLO must update the NMLS record (e.g., a new conviction, address, or employment change) — significant changes generally within 30 days.

SAFE licensing requires fingerprints for an FBI criminal background check and a credit report review of financial responsibility.

An applicant is barred if convicted of a felony in the prior 7 years, or ever for a felony involving fraud, dishonesty, breach of trust, or money laundering.

States require licensed MLOs/companies to maintain a surety bond or contribute to a recovery fund to cover consumer harm.

A report filed quarterly through NMLS detailing a company's residential mortgage loan activity and financial condition.

Licensing requires the applicant demonstrate financial responsibility, character, and general fitness to command consumer confidence.

The state-content component now embedded in the national test — it covers state licensing rules, MLO duties, and prohibited conduct uniformly across states.

The CFPB regulation establishing minimum standards for state licensing of MLOs under the SAFE Act.

The federal rule requiring registration (in NMLS) of MLOs employed by federally regulated depository institutions.

A license is inactive until a licensed company 'sponsors' the MLO in NMLS, authorizing them to originate on the company's behalf.

Acts like fraud, misrepresentation, steering, and failing to disburse funds — grounds for state disciplinary action against a license.

States may investigate, examine, suspend, revoke, or fine licensees and enforce the SAFE Act's minimum standards.

A 2019 provision letting certain MLOs originate temporarily while a new state-license application is pending, if eligibility conditions are met.

A clerical processor or underwriter who does not take applications or negotiate terms for compensation is generally not an MLO requiring a license.

SAFE pre-licensing education older than the set expiration period (generally about three years) must be retaken before licensing.

A licensed-state MLO moving to a new state, or a registered MLO becoming licensed, may originate under temporary authority for up to 120 days while the application is pending.

A licensed MLO cannot originate until an employing company that holds the proper state license formally sponsors them in NMLS.

An MLO generally cannot take the same CE course in two successive years (the 'successive-years' rule).

The SAFE Act bars licensure for anyone with a felony in the past 7 years, or ever for a felony involving fraud, dishonesty, breach of trust, or money laundering.

State regulators may examine, investigate, and audit licensees, and may issue cease-and-desist orders, fines, suspensions, or revocations.

Every MLO must display their NMLS unique identifier on advertisements and key loan documents so consumers can verify them.

A quarterly report licensees file through NMLS detailing loan-origination volume and financial condition.

An individual who, for compensation or gain, takes a residential mortgage application or offers or negotiates terms of a residential mortgage loan.

Loan processors and underwriters who do not take applications or negotiate terms generally are not 'MLOs' and need not be licensed, if supervised by a licensee.

States require licensees to keep loan and advertising records for a set period (often 3+ years) and make them available to examiners.

The four parts of a typical monthly mortgage payment: Principal, Interest, Taxes, and Insurance.

Loan-to-Value — the loan amount divided by the lesser of the property's appraised value or sales price, expressed as a percentage. Higher LTV means higher lender risk.

Debt-to-Income — a borrower's monthly debt payments divided by gross monthly income; a key capacity measure in underwriting.

Fees paid at closing to lower the interest rate; one point equals 1% of the loan amount.

The document in which the borrower legally promises to repay the loan according to its terms; it creates the debt obligation.

Both secure a loan with real property; a mortgage involves two parties, while a deed of trust adds a neutral third-party trustee that holds title until the loan is repaid.

A mortgage not insured or guaranteed by a government agency; it may be conforming or non-conforming.

A conventional loan that meets Fannie Mae/Freddie Mac standards, including the conforming loan limit, making it eligible for purchase by the GSEs.

A loan that exceeds the conforming loan limit and therefore cannot be purchased by Fannie Mae or Freddie Mac.

A mortgage insured by the Federal Housing Administration, allowing lower down payments and more flexible credit, with required mortgage insurance premiums (MIP).

A mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible veterans and service members — often no down payment and no monthly mortgage insurance.

A mortgage guaranteed by the U.S. Department of Agriculture for eligible rural and suburban buyers, often with no down payment.

A loan whose interest rate and principal-and-interest payment stay the same for the entire term.

A loan whose interest rate can change periodically based on an index plus a margin, after an initial fixed period.

The index is the benchmark rate the ARM follows; the margin is the fixed amount the lender adds to the index to set the new rate.

The interval (e.g., every 6 or 12 months) at which an ARM's interest rate can change after the initial fixed period.

Limits on how much an ARM rate can rise — per adjustment, per period, and over the life of the loan.

A large lump-sum payment of the remaining balance due at the end of a loan whose regular payments did not fully amortize it.

When the monthly payment is less than the interest due, so the unpaid interest is added to the balance and the loan grows.

The gradual repayment of a loan through scheduled payments of principal and interest until the balance reaches zero.

Insurance a conventional borrower pays when the down payment is less than 20% (LTV over 80%), protecting the lender against default.

Under the Homeowners Protection Act, PMI automatically terminates at 78% LTV (of original value) and may be requested at 80%.

A fee charged for paying off a loan early; restricted on many loan types and barred on high-cost and certain QM loans.

The process of evaluating a borrower's and property's risk to decide whether — and on what terms — to approve a loan.

Capacity (ability to repay), Capital (assets/reserves), Collateral (the property's value), and Credit (repayment history).

Monthly housing expense (PITI) divided by gross monthly income — measures how much income goes to the housing payment.

Total monthly debt payments (housing plus other debts) divided by gross monthly income.

A loan that does not meet Fannie Mae/Freddie Mac standards (e.g., a jumbo loan or one with non-standard features).

The Federal National Mortgage Association, a government-sponsored enterprise (GSE) that buys conforming loans on the secondary market.

The Federal Home Loan Mortgage Corporation, a GSE that, like Fannie Mae, purchases conforming loans on the secondary market.

Where originated loans are bought, sold, and securitized (by GSEs and investors), giving lenders capital to make new loans.

The order in which liens are paid from a foreclosure sale; a first mortgage generally has priority over later (junior) liens.

Insurance protecting the lender (and optionally the owner) against losses from defects in the property's title.

An independent, professional opinion of a property's market value, used to support the loan amount and LTV.

LTV uses the first mortgage; combined LTV (CLTV) adds all loans secured by the property divided by its value.

The difference between a property's value and the amount owed on loans secured by it.

When the amount owed on the mortgage is greater than the property's current market value (negative equity).

An agreement fixing the interest rate for a set period while the loan is processed, protecting the borrower from rate increases.

A fee charged by the lender for processing and originating the loan, typically a percentage of the loan amount.

Paying points or funds up front to temporarily or permanently reduce the loan's interest rate.

Replacing an existing mortgage with a new loan, usually to lower the rate, change the term, or take cash out.

A refinance for more than the balance owed, where the borrower receives the difference in cash, using home equity.

A loan for older homeowners (e.g., FHA's HECM) that converts equity into payments, repaid when the home is sold or the borrower leaves.

The maximum loan amount the GSEs will buy, set annually by FHFA; loans above it are jumbo.

The Fed influences mortgage rates indirectly through monetary policy and the federal funds rate; it does not set mortgage rates directly.

On an ARM, the index value plus the margin — the rate the loan would carry without caps or introductory discounts.

Short-term financing that funds building a home in draws, often converting to permanent financing at completion.

Short-term financing that lets a borrower buy a new home before selling the current one.

A home equity line of credit — a revolving credit line secured by the borrower's home equity.

A loan provision letting the lender demand the full balance immediately if the borrower defaults.

A provision letting the lender require full repayment if the property is sold or transferred.

FHA loans carry both an upfront and an annual mortgage insurance premium (MIP) that protects the lender; on many FHA loans it lasts the life of the loan.

A one-time fee on most VA loans (in place of monthly mortgage insurance) that helps sustain the program; some veterans are exempt.

A government-guaranteed loan for low-to-moderate-income buyers in eligible rural areas, often with no down payment and an income cap.

An ARM's rate equals a market index (e.g., SOFR) plus a fixed margin set by the lender; the margin does not change over the loan's life.

ARM rate caps limit the first adjustment, each later adjustment, and the total increase over the life of the loan.

An FHA-insured loan letting borrowers 62+ convert home equity to cash with no monthly payment; the balance is due when they leave the home.

Selling closed loans to investors (or GSEs) returns capital to lenders so they can fund new loans; conforming standards make loans saleable.

A government corporation that guarantees mortgage-backed securities made up of government-insured loans (FHA, VA, USDA).

The Federal Housing Finance Agency (FHFA) sets the annual conforming loan limit that separates conforming from jumbo loans.

Paying points to lower the rate: a permanent buydown lowers it for the term; a temporary buydown (e.g., 2-1) lowers it only for the first years.

Dodd-Frank sharply restricts prepayment penalties; Qualified Mortgages may only include limited penalties on certain fixed-rate, prime loans.

Generally, the lien recorded first has priority; a purchase-money first mortgage typically holds first position over later liens.

One discount point equals 1% of the loan amount, paid at closing to lower the interest rate.

The Uniform Residential Loan Application — the standard form collecting the borrower's income, assets, debts, and property information.

Name, income, Social Security number, property address, estimated property value, and loan amount sought — once received, TRID timing clocks start.

The lender must provide the Loan Estimate within three business days of receiving a complete application.

The borrower must receive the Closing Disclosure at least three business days before consummation (closing).

Pre-qualification is an informal estimate based on stated information; pre-approval is a documented, underwritten commitment subject to conditions.

Confirming a borrower's income with pay stubs, W-2s, tax returns, or other documentation during processing.

Confirming the borrower's funds for down payment, closing, and reserves via bank statements and similar records.

An underwriting approval contingent on the borrower satisfying specified conditions before closing.

The status indicating all underwriting conditions are met and the loan is ready to fund and close.

A borrower's total monthly income before taxes and deductions — the denominator for DTI ratios.

Divide total monthly debt payments by gross monthly income, then multiply by 100 to get a percentage.

Divide the loan amount by the lesser of the appraised value or sales price, then multiply by 100.

Gathering and verifying documentation, ordering the appraisal and title work, and preparing a complete file for underwriting.

The final step where documents are signed, funds are disbursed, and the loan is consummated and recorded.

The point at which the borrower becomes contractually obligated on the loan — it triggers the rescission period on applicable loans.

The Loan Estimate's purpose: to give the borrower a good-faith estimate of rates and closing costs early so they can shop and compare.

Zero-tolerance, 10%-tolerance, and no-tolerance (good-faith) buckets that limit how much certain fees may increase from the LE to the CD.

A valid reason (e.g., new information or a borrower-requested change) that allows a lender to issue a revised Loan Estimate.

Liquid assets a borrower retains after closing, often measured in months of payments, that strengthen an application.

Strengths (large reserves, low LTV, strong credit) that can offset a higher DTI or other weakness in underwriting.

Adjusting lien priority so a refinanced first mortgage stays senior to an existing junior lien (like a HELOC).

On a rescindable loan, the lender must give each owner two copies of the notice of the right to rescind and the required disclosures.

The package (Loan Estimate and other notices) delivered shortly after application explaining the loan's estimated terms and the borrower's rights.

Fees due at closing — origination, appraisal, title, recording, prepaid taxes/insurance, and similar charges.

Closing-cost contributions a seller makes on the buyer's behalf, limited by loan program and occupancy type.

Primary residence, second home, and investment property — they carry different LTV, rate, and reserve requirements.

Many loan programs target a back-end DTI at or below about 43% for a Qualified Mortgage, though program limits vary.

A purchase-contract condition allowing renegotiation or cancellation if the appraised value is below the contract price.

The LE gives early estimates within three business days of application; the CD gives final figures at least three business days before closing.

The borrower's expression of intent to continue after receiving the Loan Estimate; a lender may not charge most fees before receiving it.

If the property sits in a Special Flood Hazard Area, the originator must require flood insurance before closing the loan.

Disbursing loan proceeds to complete the transaction, after the rescission period on applicable refinances.

The file evidence — income, assets, credit, appraisal, title — underwriters rely on to support the lending decision.

If an application is denied, ECOA/Reg B requires a timely adverse-action notice stating the reasons or how to obtain them.

Compares the proposed housing payment (PITI) to gross monthly income to judge whether the payment is affordable.

Compares all monthly debt obligations, including the new housing payment, to gross monthly income.

The front-end and back-end DTI limits a loan program sets to determine whether a borrower qualifies.

Confirming a borrower's job, position, and income stability directly with the employer.

A tri-merge report showing the borrower's payment history and scores, used to assess the 'credit' C.

The lender's written promise to make the loan, often subject to conditions, after underwriting approval.

The neutral party (title/escrow company or attorney) that conducts the closing and disburses funds.

Entering the mortgage or deed of trust in the public land records to establish lien priority.

A legal authorization allowing someone to sign closing documents on a borrower's behalf, subject to lender and program rules.

The lender's policy protects the loan amount; the owner's policy protects the buyer's equity — usually optional for the buyer.

A new Loan Estimate may be issued only for a valid changed circumstance, generally within three business days of learning of it.

Up-front collection of property taxes, homeowners insurance, and per-diem interest to fund the escrow account and cover the period to first payment.

Fees fall into zero-tolerance (cannot increase), 10%-tolerance (cumulative), and no-tolerance (can change) categories; exceeding them requires a cure.

A new 3-business-day waiting period restarts if the APR exceeds tolerance, the loan product changes, or a prepayment penalty is added.

Rules barring anyone with an interest in the transaction from influencing an appraiser's opinion of value.

Lender's title insurance protects the lender's lien position; the optional owner's policy protects the buyer's equity against title defects.

Divide the monthly housing payment (PITI) by gross monthly income; it measures how much income the house payment alone consumes.

Divide total monthly debt (housing plus all other obligations) by gross monthly income; many QM programs target about 43% or below.

On a rescindable refinance, the lender disburses funds only after the 3-business-day rescission window has expired with no cancellation.

Any material misstatement, misrepresentation, or omission relied on by a lender to fund a loan — illegal and a focus of the ethics content area.

Fraud for housing is misrepresentation by a borrower to obtain a home to live in; fraud for profit is organized schemes to extract money from the process.

Misrepresenting that an investment property will be a primary residence to obtain better terms — a form of mortgage fraud.

Falsifying or inflating a borrower's income (e.g., fake pay stubs) to qualify for a loan — prohibited.

Someone who applies for a loan on behalf of the true purchaser to hide the real borrower's identity or ineligibility — a fraudulent scheme.

Manipulating or coercing a property valuation (inflating or deflating value) to support a fraudulent transaction.

Extending credit fairly and consistently without discriminating against a protected class, as required by ECOA and the Fair Housing Act.

Improperly directing a borrower toward (or away from) a loan product for the originator's benefit rather than the borrower's interest — prohibited.

Illegally denying or pricing credit based on the racial or ethnic makeup of a neighborhood rather than the borrower's qualifications.

Treating an applicant differently because of a protected characteristic — a form of illegal lending discrimination.

A neutral policy that disproportionately harms a protected class without business justification — a fair-lending violation.

A situation where an MLO's personal interest could improperly influence professional duties; it must be avoided or disclosed.

An MLO should decline a gift offered for referring business and report it, since it can create a conflict and may violate RESPA Section 8.

If an MLO learns a borrower was given misleading loan information, they should promptly correct it and inform the borrower.

An MLO who suspects fraud by a colleague or applicant should report it to a supervisor, compliance, or the proper authority — not ignore it.

An MLO must protect borrowers' nonpublic personal information and use it only for legitimate, authorized purposes.

An MLO must refuse to alter, omit, or falsify application information, even at a borrower's request, and explain the need for accuracy.

Ethical origination means recommending suitable products and giving honest, accurate information rather than maximizing personal compensation.

Abusive practices — excessive fees, loan flipping, equity stripping, or unaffordable terms — that harm borrowers; prohibited and a fair-lending concern.

Repeatedly refinancing a borrower with little benefit to generate fees — a predatory, unethical practice.

Lending based on home equity rather than the borrower's ability to repay, aiming to seize the equity through default — predatory.

Advertising terms the lender does not intend to deliver, then substituting worse terms — a deceptive, prohibited practice.

A report a financial institution files when it detects activity suggesting mortgage fraud or money laundering.

Mortgage lenders must maintain AML programs and report suspicious activity that may involve laundering through real estate transactions.

Ethical conduct includes escalating known violations through proper channels and cooperating with audits and investigations honestly.

An MLO must never provide false or misleading information to an examiner or auditor and must cooperate with lawful inquiries.

An MLO must not accept hidden fees or kickbacks; compensation arrangements must comply with RESPA and the LO compensation rule.

Applying the same standards and offering the same opportunities to all applicants protects against discrimination claims.

Providing complete, truthful, and timely disclosures (LE, CD, ARM, and others) is both a legal and ethical obligation.

Using one's position for personal gain at the borrower's or employer's expense — an ethical violation that must be avoided.

Stating loan terms (rate, payment, fees) inaccurately to induce a borrower to proceed — prohibited and potentially fraudulent.

Inconsistencies in a borrower's identity documents that an MLO must investigate under the FCRA Red Flags Rule before proceeding.

An ethical MLO maintains current knowledge of laws and products through continuing education and applies it accurately.

If a borrower discloses intent to use a loan for an illegal purpose, the MLO should decline the application and report as required.

Accepting things of value from title, appraisal, or real-estate partners in exchange for referrals can violate RESPA — decline and report.

Disparate treatment is intentionally treating applicants differently on a prohibited basis; disparate impact is a neutral policy that harms a protected class.

Under GLBA, an MLO must safeguard a borrower's NPI and follow the company's privacy and data-security policies.

Advertising terms the lender does not intend to honor to lure applicants, then substituting worse terms — a prohibited, deceptive act.

Fair lending requires applying the same standards and pricing to every applicant, based on creditworthiness — not on a prohibited basis.

An MLO must provide truthful, complete, and timely disclosures and never alter or omit application information, even at a borrower's request.