A real estate agent offers an MLO $500 for each borrower the agent refers who successfully closes a loan. How should the MLO respond?
Correct Answer
B) Decline the offer as it violates RESPA's prohibition on referral fees
Section 8 of RESPA prohibits giving or receiving anything of value for referrals of settlement service business. This includes payments between real estate agents and MLOs for loan referrals, regardless of disclosure or amount.
Why This Is the Correct Answer
Section 8 of RESPA prohibits giving or receiving anything of value for referrals of settlement service business. This includes payments between real estate agents and MLOs for loan referrals, regardless of disclosure or amount.
More Ethics & Fraud Questions
A lender's mobile app prominently displays a 'pre-qualification' feature that asks for minimal information but generates loan amount estimates that are consistently 20-30% higher than what borrowers actually qualify for when they complete full applications. The app includes a disclaimer that estimates are 'subject to full underwriting.' This practice is most likely:
An MLO discovers that multiple loan applications from different borrowers contain identical handwriting in the signature sections, despite different purported signers. The applications were submitted by different real estate agents. What is the most appropriate immediate action?
A mortgage loan originator receives a lead from a real estate agent about a potential borrower. Before calling this consumer, the MLO must:
An MLO tells Asian applicants that they need larger down payments 'because that's what investors prefer for your type of loan,' while telling similarly qualified white applicants that standard down payments are acceptable. This practice represents:
A mortgage company advertises 'Guaranteed approval for all credit types!' but internally has minimum credit score requirements of 580. This advertisement is problematic because it:
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Uniform State Test Content
12% of exam
Previous Question
Under the TSR, what constitutes 'express written consent' that would allow calling a number on the Do-Not-Call Registry?
Next Question
A borrower submits a rental agreement showing $2,500 monthly income from a property they claim to own. Which of the following would be the MOST significant red flag indicating potential rental income fraud?