EthicsQuestion 306 of 400
Under the Loan Originator Compensation Rule, a loan originator's compensation on a closed-end mortgage may NOT be based on:
a.The interest rate or other terms of the loan
b.The total dollar volume of loans originated
c.A fixed hourly wage
d.The number of loans that actually close
Explanation
The LO Comp Rule prohibits basing an originator's compensation on a transaction's terms or conditions, such as the interest rate. Compensation may be based on overall loan volume, an hourly wage, or the number of loans that close, none of which ties pay to the specific terms of an individual loan.
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Related questions on this topic
- Under the prohibition on unfair, deceptive, or abusive acts or practices (UDAAP), a practice is 'deceptive' when it:
- Which agency has primary federal authority to enforce the prohibition on unfair, deceptive, or abusive acts or practices in consumer mortgage lending?
- A lender structures a product so consumers cannot reasonably protect their own interests and takes unreasonable advantage of their lack of understanding. This best fits which UDAAP category?
- A loan officer directs a well-qualified borrower into a higher-rate loan solely because it pays the officer a larger commission. This prohibited practice is known as:
- On a single transaction, a loan originator generally may receive compensation from:
- The Mortgage Acts and Practices Advertising Rule (Regulation N) primarily prohibits:
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