A licensed Delaware attorney negotiates residential mortgage loan terms for a client as an ancillary matter to legal representation. When would Delaware remove that attorney from the listed exemption?
Correct Answer
C) When the attorney is compensated by a lender, mortgage broker, MLO, or their agent
Delaware’s attorney exemption does not apply if the attorney is compensated by a lender, mortgage broker, other MLO, or their agent.
Why This Is the Correct Answer
Delaware’s attorney exemption does not apply if the attorney is compensated by a lender, mortgage broker, other MLO, or their agent.
Why the Other Options Are Wrong
Option A: Whenever the attorney charges any legal fee to the client
Charging a legal fee to the client is not the Delaware condition that removes the exemption.
Option B: Whenever the loan is secured by Delaware residential real estate
The exemption can apply to residential mortgage terms as ancillary legal representation unless the compensation condition removes it.
Option D: Whenever the client is an immediate family member
Immediate-family scenarios are a separate Delaware exemption, not the attorney-compensation limitation.
Memory Technique
DE-C005 -> Delaware-definitions-and-exemptions
Exam Tip
The attorney exemption turns on ancillary legal representation and the compensation source.
Common Mistakes to Avoid
- -Importing another state requirement into Delaware
- -Confusing NMLS baseline requirements with Delaware-specific rules
- -Treating operational assumptions as legal authority
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