Mortgage Broker Licensing Practice Exam · Question
Which condition is a breach of the 'full disclosure' principle?
Undisclosed compensation that could influence a broker's recommendation constitutes a breach of the full disclosure principle. Clients have a right to know abou
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Question: Which condition is a breach of the 'full disclosure' principle?
Answer options:
- A broker explains an interest rate increase to a client immediately after it's announced. ✅ A broker fails to inform a client that they receive a higher commission from a particular lender for the recommended product.
- A broker provides a client with a detailed breakdown of all fees associated with a mortgage product.
- A broker informs a client that they are self-employed.
Correct answer: A broker fails to inform a client that they receive a higher commission from a particular lender for the recommended product.
Explanation: Undisclosed compensation that could influence a broker's recommendation constitutes a breach of the full disclosure principle. Clients have a right to know about any incentives that might affect the impartiality of advice.
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Related Questions
- What is the typical time frame for a mortgage agent to provide the required disclosure statement to a client?
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- Which entity is responsible for licensing and regulating mortgage brokers and agents in Ontario?
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Question explanations
- What is the typical time frame for a mortgage agent to provide the required disclosure statement to a client?
- Funds received from a client or investor that the brokerage holds on their behalf must be deposited into:
- Ontario mortgage agents must complete which of the following at each licence renewal?
- Which entity is responsible for licensing and regulating mortgage brokers and agents in Ontario?
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