In a mortgage origination file, the person preparing the valuation would be paid more if the value is higher. Which action should be taken?
Correct Answer
D) Remove the value-based compensation conflict
Lines 215-219; 12 CFR 1026.42(d). Valuation compensation cannot depend on the value assigned, and conflicts must be addressed before reliance. Therefore, the correct response is "Remove the value-based compensation conflict".
Why This Is the Correct Answer
Lines 215-219; 12 CFR 1026.42(d). Valuation compensation cannot depend on the value assigned, and conflicts must be addressed before reliance. Therefore, the correct response is "Remove the value-based compensation conflict".
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In a training scenario, the borrower pays the broker directly and the creditor also offers compensation. What action best follows the rule?
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