An MLO is reviewing procedures for a case where a settlement provider asks to be paid for a task it did not actually perform. What is the proper handling?
Correct Answer
C) Pay only for actual, necessary, distinct services performed
Lines 267-269; 12 CFR 1024.14(g). The ethical and legal distinction is payment for real services, not a label or customary amount. Therefore, the correct response is "Pay only for actual, necessary, distinct services performed".
Why This Is the Correct Answer
The correct response is "Pay only for actual, necessary, distinct services performed". The ethical and legal distinction is payment for real services, not a label or customary amount.
Why the Other Options Are Wrong
Option A: Treat professional conduct as satisfied by an oral manager approval.
Treat professional conduct as satisfied by an oral manager approval. is not correct because it bypasses the rule supported by the explanation.
Option B: Treat prior mortgage experience as a substitute for the required compliance condition.
Treat prior mortgage experience as a substitute for the required compliance condition. is not correct because it bypasses the rule supported by the explanation.
Option D: Use a generic national checklist instead of the requirement in this file documentation check.
Use a generic national checklist instead of the requirement in this file documentation check. is not correct because it bypasses the rule supported by the explanation.
Memory Technique
For RESPA fee questions, ask what service was actually performed.
Exam Tip
For RESPA fee questions, ask what service was actually performed.
Common Mistakes to Avoid
- -Renaming an unearned fee does not make it earned.
More Ethics & Fraud Questions
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