An MLO presents three conventional loan options with different rate/point combinations, but fails to present any government loan options despite the borrower qualifying for FHA financing. The MLO's defense that 'the borrower seemed sophisticated and preferred conventional loans' would be:
Correct Answer
B) Insufficient to justify the steering violation
There is no 'sophisticated borrower exception' to anti-steering rules. Regardless of the borrower's apparent sophistication or preferences, MLOs must present loan options from each category for which the borrower qualifies. Borrower waivers cannot override regulatory requirements.
Why This Is the Correct Answer
There is no 'sophisticated borrower exception' to anti-steering rules. Regardless of the borrower's apparent sophistication or preferences, MLOs must present loan options from each category for which the borrower qualifies. Borrower waivers cannot override regulatory requirements.
More Origination Questions
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A borrower asks their MLO to structure a loan to avoid triggering certain disclosure requirements by keeping the loan amount just below regulatory thresholds. How should the MLO respond consistent with good faith obligations?
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A borrower wants to refinance from a 15-year mortgage with 8 years remaining to a new 30-year mortgage to reduce monthly payments. The interest rate will increase by 0.5%. What is the PRIMARY concern for tangible net benefit?