During a disclosure desk review, the loan team encounters an RESPA Servicing Transfer issue. Which response should avoid a shortcut that would misapply the rule?
Correct Answer
C) Do not exchange value for settlement-service referrals
Why this is correct: RESPA's anti-kickback rule (Section 8) generally prohibits giving or accepting any fee, kickback, or thing of value in exchange for the referral of settlement service business. The correct answer, "Do not exchange value for settlement-service referrals," states the fundamental prohibition to avoid a core RESPA violation. Why the other choices are wrong: "Use an internal exception instead of the required federal disclosure or timing rule" is wrong because internal policies cannot override federal law, and RESPA's exceptions are limited and defined by statute. "Wait until a regulator asks for the file before applying the federal requirement" is wrong as it advocates for non-compliance. "Rely on oral agreement when the rule requires documented compliance" is wrong because RESPA compliance, especially regarding Affiliated Business Arrangement disclosures, requires written disclosures. Exam tip: RESPA's anti-kickback rule is a key prohibition. While there are specific exceptions, the general rule is no giving or receiving anything of value for a referral.
Why This Is the Correct Answer
The correct response is "Do not exchange value for settlement-service referrals" because RESPA/Regulation X limits referral value and sets servicing disclosure and response duties.
Why the Other Options Are Wrong
Option A: Use an internal exception instead of the required federal disclosure or timing rule.
Use an internal exception instead of the required federal disclosure or timing rule. is not correct because it does not apply the rule tested by this file scenario.
Option B: Wait until a regulator asks for the file before applying the federal requirement.
Wait until a regulator asks for the file before applying the federal requirement. is not correct because it does not apply the rule tested by this file scenario.
Option D: Rely on oral agreement when the rule requires documented compliance.
Rely on oral agreement when the rule requires documented compliance. is not correct because it does not apply the rule tested by this file scenario.
Memory Technique
RESPA servicing and affiliated-business rules: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
Match the file facts to RESPA servicing and affiliated-business rules; do not choose an exception or shortcut that skips the required rule.
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
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