A processor asks how to handle a file where a settlement provider asks to be paid for a task it did not actually perform. Which response is most accurate?
Correct Answer
A) 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 B: Use the supervisory exam response as a reason to postpone the required compliance step.
Use the supervisory exam response as a reason to postpone the required compliance step. is not correct because it bypasses the rule supported by the explanation.
Option C: Skip the rule because the supervisory exam response appears routine.
Skip the rule because the supervisory exam response appears routine. is not correct because it bypasses the rule supported by the explanation.
Option D: Assume professional conduct is outside compliance review because no fee has been charged yet.
Assume professional conduct is outside compliance review because no fee has been charged yet. 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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Before the team acts on a production meeting, the MLO must address professional conduct standard to Borrowers. Which response is most defensible?
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A compliance review finds that a title company offers a gift card for each borrower referral. What should the MLO do next?
A processor asks how to handle a file where a title company offers a gift card for each borrower referral. Which response is most accurate?
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