A mortgage company requires borrowers to use its affiliated title company but offers a $200 credit toward closing costs for doing so. Under RESPA Section 8 AfBA provisions:
Correct Answer
B) This violates RESPA because borrowers are required to use the affiliate
Under RESPA's AfBA safe harbor provisions, borrowers cannot be required to use affiliated entities' services. Offering credits or incentives while requiring use of the affiliate still violates RESPA's requirements that borrowers have free choice of settlement service providers.
Why This Is the Correct Answer
Under RESPA's AfBA safe harbor provisions, borrowers cannot be required to use affiliated entities' services. Offering credits or incentives while requiring use of the affiliate still violates RESPA's requirements that borrowers have free choice of settlement service providers.
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A lender originates a mortgage with a 43% debt-to-income ratio using appendix Q standards, but the loan has a 5-year interest-only period followed by a 25-year amortization schedule. What is the status of this loan under QM rules?
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A mortgage lender uses credit report information as one factor in setting the interest rate for an approved loan, resulting in a higher rate than the most favorable terms offered. This action requires: