An assistant who expects compensation connected with mortgage origination tells a consumer: “For your $250,000 residential loan, I can offer a 30-year fixed rate of 6.5% and lock it for you.” For the activity definition in 12 CFR 1008.103(c)(2), does this constitute offering or negotiating loan terms?
Correct Answer
C) Yes, it presents particular loan terms for consideration
C. This is offering or negotiating activity under the cited definition. The assistant presents particular residential-loan terms for the consumer’s consideration. The compensation condition is stated explicitly. Neither a later application nor a funded loan is necessary to classify this communication as the activity described. Scope and exceptions: Whether a state license is required additionally depends on the full statutory scope and exemptions. This question deliberately does not decide that separate issue. Source: 1008.103(c)(2)(i)(A), (ii); compare (a), (b), (e) — https://www.consumerfinance.gov/rules-policy/regulations/1008/103/
Why This Is the Correct Answer
C. This is offering or negotiating activity under the cited definition. The assistant presents particular residential-loan terms for the consumer’s consideration. The compensation condition is stated explicitly. Neither a later application nor a funded loan is necessary to classify this communication as the activity described. Scope and exceptions: Whether a state license is required additionally depends on the full statutory scope and exemptions. This question deliberately does not decide that separate issue.
Why the Other Options Are Wrong
Option A: Only if the consumer later submits a completed application
The activity definition is not contingent on a later application.
Option B: No, because a quoted rate is always neutral information
The communication offers particular terms and a lock, rather than merely explaining general loan concepts.
Option D: No, because no loan has yet closed and funded
The definition includes prospective terms, not only completed loans.
Exam Tip
Classify the conduct first; then separately evaluate licensing coverage.
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