A mortgage lender owns a 15% stake in a title company and refers borrowers to this company. The lender provides the required AfBA disclosure but fails to clearly state that the borrower is not required to use the affiliated provider. What is the primary RESPA violation?
Correct Answer
B) Failure to include the mandatory statement about borrower choice
Under RESPA Section 8(c), the AfBA disclosure must include a clear statement that the borrower is not required to use the affiliated provider and may choose any provider. Omitting this mandatory language violates the disclosure requirements even if the ownership relationship is properly disclosed.
Why This Is the Correct Answer
Under RESPA Section 8(c), the AfBA disclosure must include a clear statement that the borrower is not required to use the affiliated provider and may choose any provider. Omitting this mandatory language violates the disclosure requirements even if the ownership relationship is properly disclosed.
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A mortgage borrower's employer verification reveals that the company was incorporated just two weeks before the loan application, and the borrower claims to have worked there for two years. This discrepancy most directly impacts which BSA/AML component?
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A lender refuses to make loans on properties in a specific census tract, claiming that property values there are 'too volatile for our portfolio.' Investigation reveals this tract is 85% Hispanic. The lender's defense that the decision was based on property values rather than race: