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enny has applied for a loan to purchase a home and learns that she is unable to qualify for any loan other than a high-cost mortgage. Her lender, MortgageMax, tells her that she must complete pre-loan
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32 votes
enny has applied for a loan to purchase a home and learns that she is unable to qualify for any loan other than a high-cost mortgage. Her lender, MortgageMax, tells her that she must complete pre-loan counseling to obtain the loan. MortgageMax also tells her that it will pay for the counseling if she uses a counselor from its affiliate company, MortgageMax Counseling, and obtains her certification from this company. Which statement is the most accurate assessment of this arrangement

User Paul Syfrett
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19 votes
19 votes

Answer: C. MortgageMax may pay the counseling fees, but is prohibited from steering Jenny towards a particular counselor or allowing her to complete counseling from one of its affiliates.

Step-by-step explanation:

MortgageMax is violating the law in recommending a particular counselor and recommending one of its affiliates. Lenders are not allowed to direct a loan candidate to a certain counselor in order to avoid any unfortunate situations that arise from the counselor being partial to the lender.

Lenders are also prohibited from offering the counselling via an affiliate for the same reason above. They are however, allowed to pay for the counselling.

User Fabian Bigler
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