EthicsQuestion 307 of 400
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:
a.Table funding
b.Steering (for compensation)
c.Yield spread rebate to the borrower
d.Rate locking
Explanation
Guiding a borrower into a loan that is not in their interest to increase the originator's pay is prohibited steering under the LO Comp Rule. Table funding is a funding mechanism, a rebate to the borrower reduces their costs rather than harming them, and rate locking simply fixes a rate for a period.
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