During a disclosure desk review, a closing coordinator encounters a TILA Anti Steering Provisions issue. Which response should match the file facts to the correct rule?
Correct Answer
C) Document options offered to the consumer
Why this is correct: TILA's anti-steering provisions (under the Dodd-Frank Act) prohibit loan originators from steering a consumer to a loan that provides greater compensation to the originator unless that loan is in the consumer's interest. A key compliance practice is to document the loan options presented to the consumer. This documentation demonstrates that the originator presented a range of options, including lower-rate/lower-cost alternatives, allowing the consumer to make an informed choice without improper influence. The correct answer, "Document options offered to the consumer," aligns with this defensive record-keeping requirement. Why the other choices are wrong: "Use compensation to decide which qualified loan option to recommend" is wrong because it describes the prohibited act of steering; compensation cannot be the basis for the recommendation. "Give a token list of options without a meaningful lower-rate or lower-cost alternative" is wrong because the rule requires presenting a real alternative that is lower in rate or costs for which the consumer likely qualifies. "Omit the no-risky-features option because it is less profitable" is wrong as this is explicit steering by withholding a potentially suitable, less risky loan due to its impact on originator pay. Exam tip: Anti-steering is about preventing recommendations based on the originator's pay. Proper documentation of presented options is a critical audit trail.
Why This Is the Correct Answer
The correct response is "Document options offered to the consumer" because Anti-steering rules restrict steering consumers to loans that increase compensation without being in the consumer interest.
Why the Other Options Are Wrong
Option A: Use compensation to decide which qualified loan option to recommend.
This choice is not the best answer because it applies the wrong file step for anti-steering safeguards; the governing rule is tested by the correct option.
Option B: Give a token list of options without a meaningful lower-rate or lower-cost alternative.
This choice is a tempting shortcut, but it conflicts with anti-steering safeguards because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option D: Omit the no-risky-features option because it is less profitable.
This choice is a tempting shortcut, but it conflicts with anti-steering safeguards because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Memory Technique
anti-steering rules: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For anti-steering safeguards 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
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