An MLO's company requires all borrowers to use a specific attorney for closings, and the MLO later learns this attorney provides the company with monthly marketing payments. The MLO was unaware of this arrangement when hired. What should the MLO do?
Correct Answer
C) Report the arrangement as a potential RESPA violation to appropriate authorities
Monthly marketing payments from a settlement service provider to a lender in exchange for referrals violate RESPA Section 8. Even though the MLO didn't create the arrangement, they have a duty to report suspected violations of federal law.
Why This Is the Correct Answer
Monthly marketing payments from a settlement service provider to a lender in exchange for referrals violate RESPA Section 8. Even though the MLO didn't create the arrangement, they have a duty to report suspected violations of federal law.
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Previous Question
An MLO consistently offers higher interest rates to borrowers with Spanish surnames, even when they have identical credit profiles to other borrowers who receive better rates. The MLO claims this is based on 'market conditions in certain neighborhoods.' This practice constitutes:
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An applicant claims self-employment income of $8,000 monthly but their business checking account shows consistent deposits of exactly $8,000 on the same day each month for the past six months. What does this pattern most likely indicate?