A Washington file review asks when broker or loan-originator compensation is permitted. Which statement is best?
Correct Answer
A) Broker compensation generally depends on the borrower obtaining the agreed loan, and originator compensation from borrowers is restricted.
Washington generally prohibits a mortgage broker from receiving compensation unless the borrower actually obtains a loan on agreed terms, and a loan originator may not accept a fee, commission, or compensation from borrowers in connection with loan preparation, negotiation, or brokering.
Why This Is the Correct Answer
The correct response is "Broker compensation generally depends on the borrower obtaining the agreed loan, and originator compensation from borrowers is restricted." because Washington generally prohibits a mortgage broker from receiving compensation unless the borrower actually obtains a loan on agreed terms, and a loan originator may not accept a fee, commission, or compensation from borrowers in connection with loan preparation, negotiation, or brokering.
Why the Other Options Are Wrong
Option B: A broker may keep compensation even when the borrower never obtains the agreed loan.
A broker may keep compensation even when the borrower never obtains the agreed loan. is not correct because it does not match the state-specific rule tested by the question.
Option C: A loan originator may collect borrower compensation whenever the lender also pays.
A loan originator may collect borrower compensation whenever the lender also pays. is not correct because it does not match the state-specific rule tested by the question.
Option D: Compensation restrictions apply only to advertisements, not to closed loan files.
Compensation restrictions apply only to advertisements, not to closed loan files. 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
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