A team member asks about Appraiser Independence Requirements in a consumer complaint triage while trying to separate the real requirement from a near-miss shortcut. Which response should the MLO use?
Correct Answer
C) Disclose third-party charges in the proper category
Why this is correct: The Appraiser Independence Requirements (AIR) and RESPA prohibit referral fees and coercion. A key related rule under TRID is that charges for third-party services (like appraisals) must be disclosed in the correct category on the Loan Estimate and Closing Disclosure. "Disclose third-party charges in the proper category" ensures fee transparency and compliance with tolerance rules. Why the other choices are wrong: "Change the provider list after the borrower chooses a service to avoid tolerance review" is wrong because manipulating the provider list to avoid fee tolerance scrutiny is deceptive and violates the requirement to provide an accurate list. "Collect a fee from the provider for sending the borrower to that service" is wrong because this is a prohibited referral fee (kickback) under RESPA RESPA's anti-kickback rule. "Tell the borrower shopping is allowed while making the affiliate provider mandatory" is wrong because it misrepresents the borrower's choice; if a provider is mandatory, it must be disclosed as such, and the borrower cannot be misled about shopping. Exam tip: For third-party service questions, the compliant action always involves proper disclosure, avoiding kickbacks, and not restricting the borrower's choice unless a valid affiliate relationship is properly disclosed.
Why This Is the Correct Answer
The correct response is "Disclose third-party charges in the proper category" because Third-party settlement services must avoid referral fees and follow provider-list/tolerance rules.
Why the Other Options Are Wrong
Option A: 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 B: 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.
Option D: Tell the borrower shopping is allowed while making the affiliate provider mandatory.
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
More Origination Questions
In a training scenario, the consumer locks the interest rate after the initial disclosure package. What action best follows the rule?
A mortgage file is paused during a risk-control review because of AIR Appraiser Independence. Which answer should explain the required action to the team?
A team member asks about Good Faith Dealing in a compliance desk review while trying to avoid a shortcut that would misapply the rule. Which response should the supervisor use?
A disclosure specialist is resolving Income Calculation Methods during an internal audit sample. Which action best fits the rule?
In a closing-readiness check, a quality-control reviewer sees facts tied to Self Employed Income Calculation. What should the file reflect?
During a disclosure desk review, a policy analyst encounters an Income Calculation Self Employed issue. Which response should decide how the file should be documented?
During a training quiz scenario, the loan team encounters an Income Calculation issue. Which response should resolve the issue before the file moves forward?
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
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