During a borrower intake review, an operations lead encounters a SAFE Act Anti Steering issue. Which response should match the file facts to the correct rule?
Correct Answer
C) Present loan options without steering for compensation
Why this is correct: The SAFE Act's Anti-Steering Rule (under Regulation Z) prohibits a loan originator from steering a consumer to a loan that provides greater compensation to the originator but does not benefit the consumer. The correct practice is to present loan options that the consumer qualifies for without steering the choice based on the originator's compensation. This means explaining the options and letting the consumer choose based on their interest. The original explanation directly states this restriction. Why the other choices are wrong: "Use compensation to decide which qualified loan option to recommend" is the definition of illegal steering and is explicitly prohibited. "Give a token list of options without a meaningful lower-rate or lower-cost alternative" is wrong because the rule requires presenting a real choice that includes options for which the consumer likely qualifies, including potentially lower-cost loans. "Omit the no-risky-feature option because it is less profitable" is wrong as this is steering by omission, failing to present a potentially beneficial option to the consumer to increase originator compensation. Exam tip: Anti-steering is about presenting options neutrally. Your recommendation must be in the consumer's interest, not based on your pay.
Why This Is the Correct Answer
The correct response is "Present loan options without steering for compensation" because Anti-steering rules restrict steering consumers to loans that increase compensation without being in the consumer interest.
Why the Other Options Are Wrong
Option A: Use compensation to decide which qualified loan option to recommend.
This choice is not the best answer because it applies the wrong file step for anti-steering safeguards; the governing rule is tested by the correct option.
Option B: Give a token list of options without a meaningful lower-rate or lower-cost alternative.
This choice is a tempting shortcut, but it conflicts with anti-steering safeguards because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Omit the no-risky-features option because it is less profitable.
This choice is a tempting shortcut, but it conflicts with anti-steering safeguards because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
anti-steering rules: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For anti-steering safeguards 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
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