A team member asks about RESPA Kickbacks and Referrals in an investor-delivery review while trying to confirm the rule-based response. Which response should the loan team use?
Correct Answer
D) Handle the servicing request under Regulation X timing
Why this is correct: RESPA, implemented by Regulation X, includes specific rules for servicing mortgage loans. These rules establish required timelines for servicers to respond to borrower inquiries, handle loss mitigation applications, and provide certain notices. The correct action, "Handle the servicing request under Regulation X timing," means following these prescribed deadlines for servicing-related actions. 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 Regulation X requirements. "Treat the RESPA Kickbacks and Referrals review as complete because the file contains a related ability-to-repay note" is wrong because an unrelated note does not satisfy the distinct requirement to analyze potential kickbacks. "Rely on oral agreement when the rule requires documented compliance" is wrong because Regulation X servicing rules often require written communication and records. Exam tip: RESPA covers both anti-kickback prohibitions and servicing practices. For servicing questions, focus on Regulation X's specific timing and procedural rules.
Why This Is the Correct Answer
The correct response is "Handle the servicing request under Regulation X timing" because RESPA prohibits kickbacks and regulates escrow, servicing, and settlement-service practices.
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: Treat the RESPA Kickbacks and Referrals review as complete because the file contains a related ability-to-repay note.
This distractor shifts the issue to a different trigger, product, or timing rule instead of applying the rule tested in the stem.
Option C: 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 and Regulation X: 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 and Regulation X; 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
More Federal Laws Questions
Before the team acts on a production meeting, a training manager must address SCRA Interest Rate Cap. Which response is most defensible?
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?
A disciplinary-risk review raises a question about TILA APR and finance-charge rules. Which action should the renewal specialist recommend?
An MLO is reviewing procedures for a case where a compliance analyst asks why covered mortgage application data is collected. What is the proper handling?
A completed application arrives on 4 May. The lender declines it on 20 May and posts the notice on 8 June.
A lender mails the loan estimate on Monday 8 June rather than delivering it in person. Consummation is set for Friday 19 June.
A consumer complaint response raises a question about GLBA privacy requirements. Which action should the state compliance officer recommend?
Before the team acts on a branch training session, a policy analyst must address RESPA Servicing Transfer Notice. Which response is most defensible?
A training manager is resolving RESPA Referral Fees during an internal audit sample. Which action best fits the rule?
An operations lead is resolving ECOA Prohibited Discrimination Bases during a loan-team coaching session. Which action best fits the rule?
People Also Study
General Mortgage Knowledge
20% of exam
Mortgage Loan Origination Activities
27% of exam
Ethics, Fraud & Consumer Protection
18% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
A borrower says he would like to skip the 3-day wait because he leaves on holiday Friday and would rather sign everything now. The originator asks whether that is a basis for waiving rescission.
Next Question
During intake, a compliance analyst asks why covered mortgage application data is collected. What is the best compliant response?