Finance
Under Rhode Island law, what is 'mortgage fraud'?
ACharging a higher interest rate than originally quoted
BIntentional misrepresentation or omission on a mortgage application or in a real estate transaction to obtain financing or property under false pretenses✓ Correct
CA lender's failure to disclose fees
DA broker overcharging their commission
Explanation
Mortgage fraud involves intentional misrepresentation, omission, or misuse of information in the mortgage lending process—such as false income statements, inflated appraisals, or straw buyer schemes. It is a federal and state crime.
People Also Study
Related Rhode Island Questions
- The process of 'closing' a real estate transaction in Rhode Island involves:Escrow & Title
- Federal law requires sellers of pre-1978 homes to disclose known information about lead-based paint. In Rhode Island, this federal requirement is:Environmental
- What is the purpose of 'private mortgage insurance' (PMI) in Rhode Island residential lending?Finance
- What is the 'loan-to-value ratio' (LTV) and why does it matter in Rhode Island mortgage lending?Finance
- What is the purpose of the Truth in Lending Act (TILA) as it applies to a Rhode Island mortgage borrower?Finance
- What is 'negative amortization' in Rhode Island mortgage lending?Finance
- In Rhode Island, which of the following property types is exempt from both state and federal fair housing laws?Fair Housing
- A Rhode Island broker who knowingly participates in a scheme to flip properties at inflated values using fraudulent appraisals may be charged with:Rhode Island License Law
Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
Study This Topic
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →