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A borrower-facing employee is unsure what to do when the borrower pays the broker directly and the creditor also offers compensation. What is the correct response?

Correct Answer

C) Decline creditor compensation for that transaction

Lines 100 and 268-269; 12 CFR 1026.36(d)(2)(i). Direct consumer-paid compensation triggers the dual-compensation restriction for that transaction. Therefore, the correct response is "Decline creditor compensation for that transaction".

Answer Options
A
Increase compensation because the borrower selected a higher-rate product.
B
Pay the originator based on a loan-term proxy after closing.
C
Decline creditor compensation for that transaction
D
Let the borrower and creditor both pay the MLO on the same transaction.

Why This Is the Correct Answer

Lines 100 and 268-269; 12 CFR 1026.36(d)(2)(i). Direct consumer-paid compensation triggers the dual-compensation restriction for that transaction. Therefore, the correct response is "Decline creditor compensation for that transaction".

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