A Tennessee loss-mitigation specialist wants to refer a borrower to an MLO for refinancing. Which statement is supported?
Correct Answer
D) The referral may avoid MLO licensing only if no compensation or gain is received and applicable law is followed.
Tennessee loss mitigation specialists may refer a mortgagor to an MLO for refinancing without an MLO license if the specialist receives no compensation or gain for the referral and the referral follows applicable law.
Why This Is the Correct Answer
The correct response is "The referral may avoid MLO licensing only if no compensation or gain is received and applicable law is followed." because Tennessee loss mitigation specialists may refer a mortgagor to an MLO for refinancing without an MLO license if the specialist receives no compensation or gain for the referral and the referral follows applicable law.
Why the Other Options Are Wrong
Option A: The specialist may receive a referral fee if the borrower later refinances.
The specialist may receive a referral fee if the borrower later refinances. is not correct because it does not match the state-specific rule tested by the question.
Option B: Any loss-mitigation employee may negotiate refinance terms without an MLO license.
Any loss-mitigation employee may negotiate refinance terms without an MLO license. is not correct because it does not match the state-specific rule tested by the question.
Option C: The referral is exempt only when the borrower is already delinquent for 120 days.
The referral is exempt only when the borrower is already delinquent for 120 days. is not correct because it does not match the state-specific rule tested by the question.
Memory Technique
State rule questions: identify the state, isolate the condition, then eliminate answers that overgeneralize the rule.
Exam Tip
On state-law items, look for the answer that applies the state-specific condition instead of a broad licensing shortcut.
Common Mistakes to Avoid
- -Choosing an answer that sounds generally compliant but omits the state-specific condition
- -Treating experience, company licensing, or borrower consent as a substitute for the state rule
- -Missing limiting words such as only, generally, eligible, or statutory
More UST Questions
In a pricing desk question, an audit analyst sees facts tied to Prohibited Misrepresentation. What should the file reflect?
An applicant previously had an MLO license revoked by a state regulator. Under the SAFE Act minimum standards for a new state-licensed MLO license, which statement is correct?
Which statement correctly distinguishes a license suspension from a license revocation?
A state regulator has issued an order suspending an MLO's authority effective immediately. The MLO has filed an appeal, but no stay has been granted. What should the MLO do?
An MLO license application asks whether the applicant has been the subject of a regulatory order. The applicant has a recent consent order that falls within the question. What is the proper response?
Why does NMLS maintain licensing and enforcement information that participating regulators can access?
A regulator issues a final license suspension without giving the MLO notice of the alleged violation or any opportunity to respond, even though applicable law requires both. What issue is presented?
A regulator finds that an MLO charged consumers prohibited fees. Which set of actions is consistent with the enforcement tools contemplated by Regulation H?
An MLO's license status in NMLS changes to suspended, with no stay or reinstatement shown. What is the immediate operational effect?
Which fact most directly supports disciplinary action against an MLO rather than merely a request for additional application information?
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