Sec5-P27

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Question 1 of 8

1. Question
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) It is prohibited because compensation cannot be based on interest rate
- B) It is permitted if disclosed on the Loan Estimate
- C) It is allowed if the borrower consents in writing
- D) It is permitted only for brokered loans
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Question 2 of 8

2. Question
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) It is allowed if the affiliate relationship is disclosed
- B) It is prohibited steering-based compensation
- C) It is permitted when the fee is reasonable
- D) It is allowed if paid after closing
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Question 3 of 8

3. Question
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?
- A) Yes, if the borrower requested the change
- B) Yes, if the reduction is disclosed on the Closing Disclosure
- C) Yes, compensation may always be reduced
- D) No, the Rule prohibits reducing MLO compensation to offset pricing concessions
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Question 4 of 8

4. Question
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) It is allowed for certain unexpected increases in settlement costs
- B) It is prohibited unless the borrower agrees
- C) It is allowed only if the creditor absorbs the cost
- D) It is prohibited because compensation cannot change
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Question 5 of 8

5. Question
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) Allowed to increase without restriction
- B) Subject to zero tolerance
- C) Subject to a cumulative 10 percent tolerance
- D) Subject to post-closing cure only
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Question 6 of 8

6. Question
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?
- A) No tolerance restrictions apply
- B) Subject to zero tolerance
- C) Subject to a cumulative 10 percent tolerance
- D) Prohibited from increasing
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Question 7 of 8

7. Question
Which of the following fees is specifically identified as subject to zero tolerance under the Rule?
- A) Recording fees
- B) Transfer taxes
- C) Fees paid for optional services
- D) Fees paid to an unaffiliated third party chosen by the borrower
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Question 8 of 8

8. Question
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?
- A) It is permitted if averaged across loans
- B) It is permitted for supervisory employees
- C) It is allowed if not tied to a single loan
- D) It is prohibited compensation based on transaction profitability
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