An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
Correct Answer
B) When the product genuinely meets the borrower's needs and the MLO discloses the compensation difference
Good faith and fair dealing allows MLOs to recommend products with higher compensation, provided the product genuinely serves the borrower's best interests and the MLO makes appropriate disclosures. The key is that the recommendation must be based on the borrower's needs, not just the compensation level.
Why This Is the Correct Answer
Good faith and fair dealing allows MLOs to recommend products with higher compensation, provided the product genuinely serves the borrower's best interests and the MLO makes appropriate disclosures. The key is that the recommendation must be based on the borrower's needs, not just the compensation level.
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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?
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