When providing a list of settlement service providers to a borrower, the MLO must:
Correct Answer
C) Clearly state the borrower is not required to use any listed provider
Under RESPA, when providing a written list of providers, the lender must clearly state that the borrower is not required to use any provider on the list and may choose their own provider.
Why This Is the Correct Answer
Under RESPA, when providing a written list of providers, the lender must clearly state that the borrower is not required to use any provider on the list and may choose their own provider.
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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For third-party services where the borrower is permitted to shop, what is the tolerance level if the borrower selects a provider from the lender's written list?
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