A closing coordinator compares the file facts with RESPA Anti Kickback Provisions during a borrower follow-up call. Which conclusion is accurate?
Correct Answer
A) Use the written provider-list rule for shoppable services
Why this is correct: RESPA's rules, including provisions against kickbacks and the requirement for a written list of service providers, are designed to protect borrower choice and prevent inflated fees. For "shoppable" settlement services (those the borrower can shop for), the lender must provide a written list of available providers. This allows the borrower to compare costs. Why the other choices are wrong: "Leave provider charges undisclosed until the final Closing Disclosure" violates the timing rules; charges must be disclosed on the Loan Estimate. "Require a preferred provider and still treat the borrower as having shopped" is wrong; requiring a specific provider restricts the borrower's right to shop. "Hide an affiliate relationship because the service fee is reasonable" is illegal; affiliate relationships must be disclosed regardless of the fee's reasonableness. Exam tip: The provider list rule is specific to shoppable services. Providing the list is mandatory, and the borrower's choice from it impacts fee tolerance calculations.
Why This Is the Correct Answer
The correct response is "Use the written provider-list rule for shoppable services" because Third-party settlement services must avoid referral fees and follow provider-list/tolerance rules.
Why the Other Options Are Wrong
Option B: Leave provider charges undisclosed until the final Closing Disclosure.
This choice is not the best answer because it applies the wrong file step for third-party settlement-service controls; the governing rule is tested by the correct option.
Option C: Require a preferred provider and still treat the borrower as having shopped.
This choice is not the best answer because it applies the wrong file step for third-party settlement-service controls; the governing rule is tested by the correct option.
Option D: Hide an affiliate relationship because the service fee is reasonable.
This choice is a tempting shortcut, but it conflicts with third-party settlement-service controls because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
third-party settlement-service controls: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For third-party settlement-service controls questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
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
More Origination Questions
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
A construction loan agreement allows advances only after documented completion of specified work. A builder requests the next draw, but no completion evidence has been provided. What should occur?
Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
A construction-to-permanent loan will convert to a substantially higher fully amortizing payment. Which payment is especially important when assessing the borrower's long-term repayment capacity?
A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
During a disciplinary-risk review, a state compliance officer identifies an issue involving refinance benefit and repayment-ability review. Which response is most compliant?
Next Question
In FICO’s commonly published general-population description of its score factors, which category has an approximately 35% weighting?