During a post-application update, the supervisor encounters a TILA Anti Steering Rules issue. Which response should choose the compliant next step?
Correct Answer
A) Present loan options without steering for compensation
Why this is correct: The TILA Anti-Steering Rule prohibits loan recommendations based on the MLO's compensation when a lower-rate or lower-cost loan is available. The correct response, "Present loan options without steering for compensation," applies this by ensuring the MLO's recommendation is based on the borrower's qualified needs, not on which loan pays the MLO more. 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 all options for which the consumer qualifies, including any that are lower-cost. "Apply the licensing timing rule even though the file is testing TILA Anti Steering Rules" is wrong because it applies an irrelevant rule (licensing timing) to a substantive consumer protection issue (steering). Exam tip: Anti-steering means the borrower's interest comes first. If you see "compensation" as a reason for a recommendation, it's almost always wrong.
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 B: 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 C: 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: Apply the licensing timing rule even though the file is testing TILA Anti Steering Rules.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
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
More Origination Questions
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