The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks, referral fees, and unearned fees in any transaction involving a federally related mortgage loan. If a real estate broker offers the MLO $500 to obtain a purchase-money mortgage for the broker's client, the MLO must decline the money. Accepting payment for a referral is illegal under Section 8 of RESPA.
* Options such as applying the money toward the down payment (B) or including it on the Closing Disclosure (C)** do not make the payment legal, as it would still violate RESPA.
References:
* RESPA Section 8 - Prohibition on kickbacks and referral fees
* CFPB Guidelines on RESPA compliance

Under the Ability-to-Repay (ATR) rule (TILA § 1026.43), lenders must evaluate specific factors such as income, employment, current debt, alimony, child support, credit history, monthly payment for the loan, and monthly payments on simultaneous loans. However, projected proceeds from the sale of the property securing the loan are explicitly not required (and are generally prohibited from being considered).
"The creditor must not consider the value of, or proceeds from, the sale of the property securing the loan."
- 12 CFR § 1026.43(c)(4); CFPB ATR/QM Rule
References:
CFPB, Ability-to-Repay Rule
12 CFR § 1026.43(c)

The Bank Secrecy Act (BSA) requires mortgage lenders and other financial institutions to adopt anti-money laundering (AML) policies to detect and prevent money laundering and other financial crimes. Under BSA, lenders must:
* Implement a written AML compliance program.
* Report suspicious activities using Suspicious Activity Reports (SARs).
* Maintain records and report large cash transactions to prevent illegal financial activities such as money laundering and fraud.
Other laws mentioned:
* The National Bank Act and National Currency Act focus on the regulation of national banks.
* The Real Estate Settlement Procedures Act (RESPA) addresses settlement and disclosure requirements but does not cover AML rules.
References:
* Bank Secrecy Act (BSA)
* Financial Crimes Enforcement Network (FinCEN) guidelines

The Fair Credit Reporting Act (FCRA) restricts the permissible purposes for which a credit report can be obtained. A mortgage loan originator may only pull a credit report for a bona fide mortgage loan transaction.
Pulling a credit report for a non-mortgage transaction, even with the consumer's consent, is not a permissible purpose.
"A person may obtain a consumer report only if the report is to be used for a permissible purpose under the FCRA. Permissible purposes include credit transactions initiated by the consumer."
- 15 U.S.C. § 1681b; FCRA
References:
FTC, Using Consumer Reports: What Landlords Need to Know
SAFE MLO National Test Study Guide

One of the requirements for obtaining an MLO (Mortgage Loan Originator) license under the SAFE Act is that the MLO must be covered by a net worth requirement, surety bond, or must pay into a state fund. This requirement ensures that MLOs have adequate financial backing to protect consumers and the public in the event of legal or financial disputes.
* A (10 hours of pre-licensing education) is incorrect because the requirement is at least 20 hours of pre-licensing education.
* B (license revoked) and C (conviction) are not fully accurate as they do not align with the exact licensing rules under the SAFE Act.
References:
* SAFE Act, 12 USC §5101
* NMLS Licensing Guidelines