Question

After failing his Florida licensing exam, Doug decided to change his career path and began working as an administrator for the FHA. With FHA approval, Doug gave lists of foreclosed properties to broker Paige, under the provision that Paige would pay him a percentage of commissions earned by her company on properties from that list. Which of the following is TRUE?

a) Doug's actions are legal, as he is not directly involved in real estate transactions.
b) Doug's actions violate FHA regulations and can result in penalties.
c) Paige is solely responsible for any legal consequences in this situation.
d) FHA has no jurisdiction over Doug's activities as an administrator.

Answer 1

Doug's actions of receiving commissions for providing lists of foreclosed properties to a broker are a violation of FHA regulations and can result in penalties, making option b) the correct answer.

Step-by-step explanation:

Doug's actions, as described, do involve him violating FHA regulations by providing lists of foreclosed properties to a broker and receiving a percentage of commissions. It is a breach of ethical standards and regulations for an FHA administrator to engage in such an arrangement. Therefore, the correct answer to the student's question is b) Doug's actions violate FHA regulations and can result in penalties. Such behavior can lead to a conflict of interest and goes against FHA's intent of ensuring fair and lawful housing practices. Doug is responsible for adhering to the rules and ethical standards set forth by the FHA, and Paige may also be implicated for participating in this unethical arrangement.

Doug's actions violate FHA regulations and can result in penalties. The FHA, or Federal Housing Administration, oversees the regulation of real estate transactions and enforces guidelines to ensure fair practices. In this situation, Doug, as an administrator for the FHA, provided lists of foreclosed properties to broker Paige under the provision that she would pay him a percentage of commissions. This arrangement violates FHA regulations as it involves compensation for the referral of business, which is prohibited by the FHA. Therefore, Doug's actions can have legal consequences.