Which of the following is NOT a prohibited practice under mortgage regulations?

Notification of loan satisfaction is considered a legitimate and necessary practice in the mortgage industry. This refers to the process of informing borrowers that their loan has been paid off, which is an essential step in concluding the lender-borrower relationship and ensuring that the borrower receives a clear title to the property without the encumbrance of the mortgage.

In contrast, the other options involve unethical or illegal behaviors that can harm consumers and undermine the integrity of the mortgage lending process. Misrepresentation of facts and false advertising can mislead borrowers about the terms and costs of a mortgage, while failure to practice due diligence can lead to irresponsible lending and potential financial harm to borrowers. Each of these actions violates various regulations established to protect consumers in the mortgage industry.