Sec5-P27

A mortgage broker structures their compensation so that they earn more when borrowers accept higher interest rates on their loans.

How does this arrangement align with loan originator compensation rules?

A loan originator receives additional compensation for steering a borrower to purchase required title insurance from an affiliate of the brokerage.

How is this practice treated under the Rule?

A lender reduces a loan originator’s compensation to cover the cost of a pricing concession made after the borrower requests a change in loan terms.

Is this compensation adjustment permitted?

Unexpected increases occur in estimated settlement costs after the Loan Estimate is issued. The loan originator voluntarily reduces their compensation to help defray these increased costs.

How does the Rule treat this action?

A creditor charges a borrower a fee paid directly to the creditor that increases after the Loan Estimate is issued, without a valid changed circumstance.

How is this fee categorized under tolerance rules?

A borrower is permitted to shop for a third-party settlement service, selects a provider from the creditor’s written list, and the fee increases modestly at closing.

Which tolerance category applies to this fee?

Which of the following fees is specifically identified as subject to zero tolerance under the Rule?

A lender bases a loan originator’s compensation on the overall profitability of a pool of mortgage transactions.

How does the Rule address this compensation structure?