A mortgage file is paused during a secondary-market screen because of RESPA AfBA Provisions. Which answer should select the answer that fits the governing requirement?
Correct Answer
B) Give the AFBA disclosure and avoid required use
Why this is correct: The Real Estate Settlement Procedures Act (RESPA) and its implementing Regulation X contain specific provisions regarding Affiliated Business Arrangements (AfBAs). A key requirement is that if a referral is made to an affiliated service provider, a written disclosure must be given to the consumer, and the consumer cannot be required to use that affiliated provider. The correct answer, "Give the AFBA disclosure and avoid required use," precisely captures these two mandatory steps: provide the disclosure and ensure the use is not mandatory. Why the other choices are wrong: "Delay the RESPA AfBA Provisions step until a later credit underwriting review instead of acting now" is wrong because RESPA disclosures have specific timing requirements and cannot be arbitrarily delayed. "Wait until a regulator asks for the file before applying the federal requirement" is wrong because RESPA compliance is mandatory at the time of the referral, not contingent on a regulator's request. "Rely on oral agreement when the rule requires documented compliance" is wrong because the AfBA disclosure must be in writing. Exam tip: For RESPA AfBA questions, think: "Disclose in writing, and no required use." Any action that delays, omits the written disclosure, or makes use mandatory violates the rule.
Why This Is the Correct Answer
The correct response is "Give the AFBA disclosure and avoid required use" because RESPA/Regulation X limits referral value and sets servicing disclosure and response duties.
Why the Other Options Are Wrong
Option A: Delay the RESPA AfBA Provisions step until a later credit underwriting review instead of acting now.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option C: 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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