A mortgage broker charges borrowers a $500 'processing fee' but actually performs no processing services, instead paying a third-party processor $300 and keeping $200. Under RESPA Section 8:
Correct Answer
C) This violates the prohibition against unearned fees
Under RESPA Section 8, this arrangement violates the prohibition against unearned fees. When a settlement service provider charges for services but doesn't perform them, keeping a portion of the fee without providing corresponding services constitutes an unearned fee violation.
Why This Is the Correct Answer
Under RESPA Section 8, this arrangement violates the prohibition against unearned fees. When a settlement service provider charges for services but doesn't perform them, keeping a portion of the fee without providing corresponding services constitutes an unearned fee violation.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
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Which of the following documents must be provided to trigger the start of the 3-day rescission period?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which information is NOT required to be included in an AfBA disclosure?
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A borrower receives TILA disclosures for a mortgage loan on Thursday and the lender's office is closed Friday for a holiday. Assuming no changes to the loan terms, what is the earliest day the loan can be consummated?
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