Before the loan advances, a training manager must resolve a RESPA servicing and affiliated-business rules issue during a RESPA servicing and affiliated-business rules review. What should happen?
Correct Answer
B) Pay only for actual settlement services performed
Why this is correct: The Real Estate Settlement Procedures Act (RESPA) and Regulation X prohibit kickbacks and unearned fees. A key affiliated business arrangement (AfBA) rule requires that payments for settlement services be for services actually performed and not exceed their reasonable value. The correct action is to "Pay only for actual settlement services performed." Why the other choices are wrong: Using an internal exception to bypass federal disclosure or timing rules violates RESPA. Waiting for a regulator to ask is non-compliant, as RESPA rules are mandatory and apply at the time of the transaction. Relying on an oral agreement is invalid, as RESPA requires specific written disclosures for AfBAs and documented compliance. Exam tip: RESPA's core purpose is to eliminate kickbacks and ensure consumers receive necessary disclosures. Any answer suggesting payment for no service or an unearned fee is a RESPA RESPA's anti-kickback rule violation.
Why This Is the Correct Answer
The correct response is "Pay only for actual settlement services performed" because RESPA/Regulation X limits referral value and sets servicing disclosure and response duties.
Why the Other Options Are Wrong
Option A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option C: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
Option D: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
RESPA servicing and affiliated-business rules: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to RESPA servicing and affiliated-business rules; do not choose an exception or shortcut that skips the required rule.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
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