A borrower's credit profile qualifies them for loans in all three categories: conventional, government, and non-QM. The MLO only presents conventional loans because they believe government and non-QM loans are 'inferior products.' This practice:
Correct Answer
B) Violates anti-steering rules regardless of the MLO's subjective opinion
Anti-steering provisions under Regulation Z prohibit MLOs from steering borrowers away from loan categories based on subjective opinions about product quality or any factor other than the borrower's legitimate interests. MLOs must present options from each category for which the borrower qualifies.
Why This Is the Correct Answer
Anti-steering provisions under Regulation Z prohibit MLOs from steering borrowers away from loan categories based on subjective opinions about product quality or any factor other than the borrower's legitimate interests. MLOs must present options from each category for which the borrower qualifies.
More Origination Questions
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For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
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