A lender has an affiliated business arrangement with a third-party service provider. Under what circumstances can the lender require a borrower to use particular services in a loan transaction?
a. If there are no kickbacks or referral fees
b. Only if the lender has an ownership interest of more than 1%
c. If there are no kickbacks or referral fees and the service provider is an attorney, credit reporting agency, or appraiser
d. Under no circumstances; this is strictly prohibited by RESPA
Ans: c. If there are no kickbacks or referral fees and the service provider is an attorney, credit reporting agency, or appraiser
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In recent years, the Dow Jones Industrial Average has replaced manufacturing companies listed in the index with pharmaceutical and technology companies. Why?
A) to open the Dow to foreign companies B) to reflect change in the U.S. economy C) to add more companies selling preferred stock D) to enhance computation of the index E) to penalize manufacturing companies