Federal Mortgage Law · 24% of the SAFE exammedium
Correct answer: The lender must provide an AfBA disclosure, the borrower must not be required to use the affiliated company, and the only payment between entities must be a return on ownership
Under RESPA, an Affiliated Business Arrangement is permissible only if three conditions are met: (1) the referring party provides an AfBA Disclosure Statement to the consumer at or before the time of the referral; (2) the consumer is not required to use the affiliated provider; and (3) the only thing of value received from the arrangement, other than the permitted payments, is a return on ownership. A 15% interest (triggering the AfBA rules at 1% ownership or more) does not automatically make the arrangement illegal (C). Written consent (A) is not the standard — disclosure is. The disclosure threshold is 1% ownership, not 25% (D).
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