When comparing loan products for a borrower, an MLO must provide information about all of the following EXCEPT:
Correct Answer
C) The lender's profit margin on the loan
While MLOs must provide comprehensive loan comparison information including APR, payment amounts, and penalty terms, they are not required to disclose the lender's internal profit margins, which are proprietary business information.
Why This Is the Correct Answer
While MLOs must provide comprehensive loan comparison information including APR, payment amounts, and penalty terms, they are not required to disclose the lender's internal profit margins, which are proprietary business information.
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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An MLO is working with a borrower who has a power of attorney document allowing their adult child to act on their behalf. When providing required disclosures, to whom should the MLO deliver the documents?
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During a loan application meeting, a borrower who speaks limited English brings their adult child as an interpreter. The MLO notices the child is modifying some of the borrower's responses to make them sound more favorable. What should the MLO do?