SAFE MLO Exam Prep 2026 | Practice Test Questions And Answers

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A lender refers applicants to a title company that is partly owned by the lender. What is generally required for the affiliated business arrangement to qualify for the RESPA exemption?

The consumer must receive the required affiliated-business disclosure and generally may not be required to use the affiliate. The title company must charge less than every competing provider in the market. The lender must give the consumer half of any ownership distribution it receives. The referral may be made only after the Closing Disclosure is signed.

Correct Answer:

The consumer must receive the required affiliated-business disclosure and generally may not be required to use the affiliate.

Explanation:

A RESPA affiliated-business arrangement can qualify for an exemption when the required relationship and estimated-charge disclosure is provided, the consumer generally is not required to use the referred provider, and the only thing of value from the arrangement is a bona fide return on ownership interest.

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