A mortgage company owns 25% of a settlement service provider and refers borrowers to this company. The mortgage company receives quarterly distributions based on the provider's profits. This arrangement is:
Correct Answer
B) Permitted if AfBA disclosure is provided
This arrangement is permitted under RESPA's AfBA provisions as long as proper disclosure is made, the borrower is not required to use the service, and the payments are returns on ownership interest rather than referral fees.
Why This Is the Correct Answer
This arrangement is permitted under RESPA's AfBA provisions as long as proper disclosure is made, the borrower is not required to use the service, and the payments are returns on ownership interest rather than referral fees.
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A mortgage broker charges a borrower $3,000 in origination fees and receives $2,500 in yield spread premium from the lender on the same transaction. For HOEPA points and fees calculation purposes, what amount must be included?