A North Carolina builder offers $18,000 off a $400,000 home for using its affiliated lender. Does the $18,000 incentive comply with the state cap on affiliated-lender discounts?
Correct Answer
D) Over the cap: such a discount may not exceed 3% of the final sales price
A mortgage lender or broker shall not originate a loan where its use is a condition for the borrower to receive a discount or thing of value from an affiliated seller unless, among other conditions, the discount does not exceed three percent of the final sales price. Other choices: the rule caps the incentive; the figure is 3 percent, which is $12,000 here; and disclosure is a separate condition. Source: 04 NCAC 03M .0602(a)(3)
Why This Is the Correct Answer
A mortgage lender or broker shall not originate a loan where its use is a condition for the borrower to receive a discount or thing of value from an affiliated seller unless, among other conditions, the discount does not exceed three percent of the final sales price. Other choices: the rule caps the incentive; the figure is 3 percent, which is $12,000 here; and disclosure is a separate condition. Source: 04 NCAC 03M .0602(a)(3)
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