A customer-service escalation raises an RESPA Kickbacks and Referrals question for the MLO. What answer should guide the file?
Correct Answer
D) Use the written provider-list rule for shoppable services
Why this is correct: RESPA's anti-kickback rule prohibits kickbacks and referral fees for business related to a settlement service. A key compliant practice is providing a written list of providers for "shoppable" settlement services (like title insurance) when required. "Use the written provider-list rule for shoppable services" is a correct application of RESPA's requirements to avoid the appearance of a referral arrangement. Why the other choices are wrong: "Treat a referral arrangement as acceptable because no borrower complained" is wrong because RESPA violations are based on the act itself, not on whether a complaint was filed. "Change the provider list after the borrower chooses a service to avoid tolerance review" is wrong because it manipulates the process and likely violates good faith estimate/tolerance rules. "Collect a fee from the provider for sending the borrower to that service" is a classic, illegal kickback under RESPA's anti-kickback rule. Exam tip: RESPA's core prohibition is on giving or taking *anything of value* for a referral. The provider list rule is a common, compliant practice to remember.
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 A: Treat a referral arrangement as acceptable because no borrower complained.
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: 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 C: 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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