An MLO's borrower wants to use a title company that is owned by the borrower's real estate agent. What disclosure requirement applies to this situation?
Correct Answer
B) The real estate agent must provide an Affiliated Business Arrangement disclosure
Under RESPA Section 8, when a settlement service provider has an ownership or other beneficial interest in a provider being referred, an Affiliated Business Arrangement (AfBA) disclosure must be provided to inform the borrower of the relationship and their right to shop for services.
Why This Is the Correct Answer
Under RESPA Section 8, when a settlement service provider has an ownership or other beneficial interest in a provider being referred, an Affiliated Business Arrangement (AfBA) disclosure must be provided to inform the borrower of the relationship and their right to shop for services.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
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A lender discovers that local municipality fees have increased by $200 since the Loan Estimate was provided due to a city council vote. The lender wants to pass this cost to the borrower. This scenario: