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Originationhard27% of exam

A mortgage file is paused during a lock-desk handoff because of Dodd Frank MLO Compensation. Which answer should match the file facts to the correct rule?

Correct Answer

A) Document compensation under Regulation Z rules

Loan originator compensation cannot be based on transaction terms or proxies and dual compensation is restricted. The best answer is "Document compensation under Regulation Z rules".

Answer Options
A
Document compensation under Regulation Z rules
B
Pay the originator based on a loan-term proxy after closing.
C
Let the borrower and creditor both pay the MLO on the same transaction.
D
Use profitability of the selected product to decide the originator bonus.

Why This Is the Correct Answer

Loan originator compensation cannot be based on transaction terms or proxies and dual compensation is restricted. The best answer is "Document compensation under Regulation Z rules".

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