Before you read
Test yourself first: 5 questions
Question 1 of 5
Which federal law requires lenders to disclose the true cost of credit, including the annual percentage rate (APR) and finance charges, to consumers?
Answer: A. The Truth in Lending Act, implemented by Regulation Z, requires lenders to disclose the cost of credit, including the APR and total finance charges, so borrowers can compare loans.
Question 2 of 5
A borrower is refinancing the mortgage on her primary residence. Under the Truth in Lending Act, what right does she have after signing the loan documents?
Answer: A. TILA grants a 3-business-day right of rescission on refinances and home equity loans secured by the borrower's principal residence (this does not apply to a purchase loan).
Question 3 of 5
The Consumer Financial Protection Bureau (CFPB) combined the disclosures formerly required separately under TILA and RESPA into which integrated forms?
Answer: B. The TRID rule (TILA-RESPA Integrated Disclosure) replaced the older Good Faith Estimate and HUD-1/Truth-in-Lending forms with the Loan Estimate and the Closing Disclosure.
Question 4 of 5
A lender refusing to make loans in certain neighborhoods regardless of the applicant's qualifications is:
Answer: A. Redlining is the illegal practice of denying lending or insurance in specific areas, often correlating with protected classes.
Question 5 of 5
A lender systematically refuses to make mortgage loans in certain neighborhoods regardless of an individual applicant's qualifications. This discriminatory lending practice is called:
Answer: C. Redlining is the illegal practice of denying or restricting loans in specific geographic areas, often correlated with the racial composition of those neighborhoods.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
Predatory patterns the exam flags: equity stripping (lending against equity the borrower can't repay), loan flipping (repeated refinances for fees), packing (hiding unwanted insurance in payments), and steering qualified borrowers into subprime products. Mortgage fraud includes silent seconds, straw buyers, and inflated appraisals — federal crimes. The SAFE Act requires mortgage loan originators to be licensed/registered with the NMLS. Real estate licensees who 'help' massage numbers on a loan application are committing fraud, not customer service.
Usury, Predatory Lending & Loan Fraud: FAQs
Is Usury, Predatory Lending & Loan Fraud on the real estate exam?
Yes. Financing & Lending is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
