Which of the following actions should a mortgage loan originator (MLO) take if a real estate broker offers the MLO $500 to obtain a purchase-money mortgage for the real estate broker's client?
A.
Decline the money
B.
Apply the $500 towards the downpayment
C.
Receive the $500 fee and include it on the Closinq Disclosure
D.
Accept the money after obtaining the requested loan for the client
The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks, referral fees, and unearned fees in any transaction involving a federally related mortgage loan. If a real estate broker offers the MLO $500 to obtain a purchase-money mortgage for the broker's client, the MLO must decline the money. Accepting payment for a referral is illegal under Section 8 of RESPA.
Options such as applying the money toward the down payment (B) or including it on the Closing Disclosure (C)** do not make the payment legal, as it would still violate RESPA.
[References:, RESPA Section 8 – Prohibition on kickbacks and referral fees, CFPB Guidelines on RESPA compliance, , ]
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