During a disciplinary-risk review, a training manager identifies an issue involving third-party settlement-service controls. Which response is most compliant?
Correct Answer
A) Use the written provider-list rule for shoppable services
Why this is correct: RESPA prohibits kickbacks and unearned fees for referrals of settlement services. For services where the borrower can shop ("shoppable services"), TRID requires the creditor to provide a written list of providers. The original explanation correctly states that third-party services must avoid referral fees and follow provider-list rules. "Use the written provider-list rule for shoppable services" directly implements this requirement, promoting borrower choice and avoiding illegal referral arrangements. Why the other choices are wrong: "Delay the RESPA Kickbacks and Referrals step until a later consumer complaint review instead of acting now" is wrong because RESPA compliance is proactive; waiting for a complaint does not correct an ongoing violation. "Change the provider list after the borrower chooses a service to avoid tolerance review" is wrong because manipulating the list to avoid tolerance rules is deceptive and violates the requirement to provide the list in good faith. "Collect a fee from the provider for sending the borrower to that service" is wrong because this is a classic prohibited referral fee under RESPA RESPA's anti-kickback rule. Exam tip: For third-party service questions, two rules are key: RESPA's anti-kickback and TRID's written list for shoppable services. Any fee for a referral is a red flag.
Why This Is the Correct Answer
The correct response is "Use the written provider-list rule for shoppable services" because Third-party settlement services must avoid referral fees and follow provider-list/tolerance rules.
Why the Other Options Are Wrong
Option B: Delay the RESPA Kickbacks and Referrals step until a later consumer complaint 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: Change the provider list after the borrower chooses a service to avoid tolerance review.
This choice is not the best answer because it applies the wrong file step for third-party settlement-service controls; the governing rule is tested by the correct option.
Option D: Collect a fee from the provider for sending the borrower to that service.
This choice is not the best answer because it applies the wrong file step for third-party settlement-service controls; the governing rule is tested by the correct option.
Memory Technique
third-party settlement-service controls: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For third-party settlement-service controls questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
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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