A compliance review finds that a title company offers a gift card for each borrower referral. What should the MLO do next?
Correct Answer
B) Refuse the referral fee because no service is performed
Lines 244-249; 12 CFR 1024.14(b). A thing of value for a referral is prohibited even if the borrower charge does not increase. Therefore, the correct response is "Refuse the referral fee because no service is performed".
Why This Is the Correct Answer
The correct response is "Refuse the referral fee because no service is performed". A thing of value for a referral is prohibited even if the borrower charge does not increase.
Why the Other Options Are Wrong
Option A: Ignore the TRID timing and fee disclosure issue unless the borrower complains.
Ignore the TRID timing and fee disclosure issue unless the borrower complains. is not correct because it bypasses the rule supported by the explanation.
Option C: Use borrower consent as a substitute for the governing mortgage rule.
Use borrower consent as a substitute for the governing mortgage rule. is not correct because it bypasses the rule supported by the explanation.
Option D: Wait until after the license-status check to decide whether the disclosure, filing, or license issue matters.
Wait until after the license-status check to decide whether the disclosure, filing, or license issue matters. is not correct because it bypasses the rule supported by the explanation.
Memory Technique
Gift, split, bonus, or credit tied to referrals should trigger RESPA Section 8.
Exam Tip
Gift, split, bonus, or credit tied to referrals should trigger RESPA Section 8.
Common Mistakes to Avoid
- -No borrower overcharge is not a defense to a referral-fee arrangement.
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