What is the primary purpose of the anti-steering three-category loan presentation requirement?
Correct Answer
B) To prevent loan originators from steering borrowers to loans that benefit the originator rather than the borrower
The anti-steering provisions were designed to prevent loan originators from directing consumers toward loan products that provide greater compensation to the originator rather than loans that are in the consumer's best interest. The three-category presentation ensures consumers see a range of options.
Why This Is the Correct Answer
The anti-steering provisions were designed to prevent loan originators from directing consumers toward loan products that provide greater compensation to the originator rather than loans that are in the consumer's best interest. The three-category presentation ensures consumers see a range of options.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
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A lender's appraisal review process reveals that 15% of appraisals from a particular appraiser come in exactly at contract price, while industry average is 5%. The lender should:
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Bank statements show a borrower has $50,000 in a savings account that has been there for 6 months, but $30,000 was transferred to checking two days before closing. How should this transfer be treated?