Chapter 38 — Self-Check Quiz

Twenty-six questions. Multiple choice and short answer, written in the style of the SAFE MLO test where the material is exam-relevant. Answer all of them before opening the key.

Multiple choice

1. According to this chapter, what is a loan officer actually selling?

(a) The lowest available rate for the borrower's profile (b) A conforming loan product that meets agency guidelines (c) Certainty that the file will close, on time, at the number quoted (d) A relationship with a licensed professional

2. Which of the following is the STRONGEST evidence of a loan officer's reliability from a referral partner's point of view?

(a) A statement on the loan officer's website that they close on time (b) The loan officer's years of experience in the industry (c) Four prior files the partner watched the loan officer work (d) The loan officer's employer's national brand

3. A value proposition statement is most useful when it:

(a) Applies to the widest possible range of borrowers (b) Could be shown to be false (c) Emphasizes competitive pricing (d) Avoids naming any limitations

4. A lender pays a real estate brokerage \$1,000 per month under a written marketing services agreement. Which fact is MOST important in determining whether this violates Section 8 of RESPA?

(a) Whether the agreement is in writing and signed (b) Whether marketing services were actually performed and \$1,000 reflects their reasonable market value (c) Whether the brokerage referred any loans during the month (d) Whether the arrangement was disclosed to borrowers at application

5. An originator pays 50% of the cost of a co-branded advertisement in which the originator's branding occupies 25% of the space. The additional 25% of cost is BEST characterized as:

(a) A permissible marketing expense (b) A thing of value conveyed to a referral source (c) An affiliated business arrangement (d) A violation only if referrals actually followed

6. Which is LEAST likely to be treated as a "thing of value" under RESPA Section 8?

(a) Below-market rent for desk space in a real estate office (b) Free customer-relationship-management software seats provided to an agent (c) A general educational seminar open to all agents in a market, with modest refreshments (d) Payment of an agent's listing photography invoices

7. Which of the following BEST establishes fair market value for advertising space in a co-marketing arrangement?

(a) The amount the parties agree is fair (b) The publisher's published rate card for the same space, dated (c) An amount proportionate to the referrals expected (d) Half the total cost, as a customary industry split

8. A loan originator posts about current mortgage rates from a personal social media account with no company branding. Which statement is MOST accurate?

(a) Personal accounts are exempt from advertising requirements (b) The post is exempt because it was not paid or boosted (c) If the communication solicits mortgage business, advertising and identifier requirements generally apply regardless of the account's character (d) Requirements apply only if the post includes a call to action

9. The NMLS unique identifier requirement applies to:

(a) Print advertising only (b) Any material that solicits mortgage business, regardless of medium (c) Only advertising placed by the employer (d) Only material that quotes a specific interest rate

10. An originator wants to narrow the audience for a mortgage advertisement to specific ZIP codes and to a "lookalike audience" built from past customers. The PRIMARY concern is:

(a) Cost per impression (b) Fair lending and discriminatory ad delivery (c) Record retention (d) Whether the platform permits it

11. Under the Loan Originator Compensation rule, an originator's compensation may NOT be based on:

(a) The number of loans closed (b) A term of the transaction or a proxy for a term (c) Whether the consumer is a new or existing customer (d) An hourly rate for time actually worked

12. According to §38.9, the principal way a specialist earns more than a generalist is:

(a) Charging a higher rate on difficult files (b) Receiving a higher commission percentage from the employer for complex files (c) Lower time-per-file, lower fallout, and less rate shopping (d) Collecting an additional fee from the borrower for the specialized analysis

13. The chapter identifies which post-close moment as the point of maximum goodwill?

(a) Thirty days after closing, once the borrower has settled in (b) The closing table itself (c) The first payment date (d) The one-year anniversary

14. A referral ask is most likely to succeed when it:

(a) Is made on every contact so the borrower does not forget (b) Names a specific person, a specific reason, and a specific small task (c) Offers the borrower something of value for a successful referral (d) Is delayed until the borrower has been in the home a full year

15. Which of the following would be MOST likely to create a RESPA question, even though the recipient is a consumer rather than an industry participant?

(a) A handwritten thank-you note after closing (b) A closing gift of modest value (c) A \$100 gift card paid to a past borrower for each referral who closes (d) An annual mortgage review conducted by phone

16. In the Linden Street file, the 30-day lock was taken on day 12 and expired on day 42 against a contract naming a day-45 closing. The correct characterization is:

(a) A reasonable risk, since most files close early (b) An error at the moment of purchase — the lock could never have covered the contracted date (c) Acceptable, because the extension was ultimately lender-paid (d) Irrelevant to the closing date, since locks may always be extended free of charge

17. The chapter argues that a file that closed late should:

(a) Be excluded from the post-close sequence to avoid reminding the borrower (b) Receive the same sequence, on the same dates, plus an agent debrief (c) Receive the sequence only after a three-month cooling-off period (d) Receive a review request only if the delay was the borrower's fault and they say so first

18. The one circumstance in which the chapter says the post-close referral ask should wait is:

(a) When the file closed late for any reason (b) When the borrower is a first-time buyer (c) When the delay was the loan officer's own fault (d) When the loan was a government product

19. According to §38.3, the most valuable of the four agent currencies is:

(a) Buying lunch consistently (b) Offering the lowest rate available (c) Telling the truth early — before you have a solution (d) Sending a monthly market newsletter

20. A loan officer changes employers. Which of the following is the LEAST accurate statement about their database?

(a) The employer's customer-relationship-management records are generally the employer's property (b) Non-solicitation provisions may restrict contacting former customers, subject to state law (c) Borrower files contain nonpublic personal information subject to privacy obligations (d) Any contact the loan officer personally met belongs to the loan officer as a matter of law

Short answer

21. State the formula for a partner-level referral rate, and explain why the denominator is usually the hard part.

22. A co-branded print ad costs \$1,200 per month. The page is four equal quarter-page panels; you occupy one. The publisher's rate card prices a quarter page at \$300. You are asked to pay \$600. Compute your proportionate share, the monthly excess, and the annual excess. State what the excess is under Section 8.

23. Name the four documents that make up a defensible co-marketing folder, and say which one proves the arrangement was actually performed.

24. A borrower reaches 80% of the original property value at payment 125 and 78% at payment 137. State what the borrower may do at each point and name the governing statute.

25. §38.10 says to plan inputs, not outputs. Give one example of each from the chapter's standing week, and explain in one sentence why an output alone is not a plan.

26. Your single largest referral source produced 22 of your 41 closings last year. Compute the concentration percentage and state, in two sentences, why this is a problem to act on rather than a success to celebrate.

Answer key — open only after answering all twenty-six **1. (c)** Certainty that the file will close, on time, at the number quoted. Rates are not yours to set and the loan itself is a commodity written to published specifications (§38.1). **2. (c)** Four prior files the partner watched. Evidence the partner collected personally outranks every form of assertion. Website claims cost nothing to make; brand and tenure survive no transaction that goes wrong (§38.1). **3. (b)** Could be shown to be false. A promise that cannot be broken cannot be relied upon either (§38.2). **4. (b)** Whether services were actually performed and whether the payment reflects their reasonable market value. (a) is necessary but nowhere near sufficient; (c) is a trap — the absence of referrals does not cure a payment that was consideration for them, and their presence does not by itself condemn a properly priced arrangement; (d) disclosure does not cure a Section 8 problem. Chapter 24 owns the doctrine. **5. (b)** A thing of value conveyed to a referral source. Note that no promise, quota, or referred file has to be shown — the disproportion between value paid and value received is itself the problem (§38.5). **6. (c)** A general educational seminar open to all agents with modest refreshments is ordinary promotional activity. It changes character when it becomes specific to one referral source or is tied to volume. (a), (b), and (d) are all classic things of value. Verify your employer's policy, which is frequently stricter (§38.4, §38.5). **7. (b)** The publisher's published rate card, dated. Its strength is precisely that you did not set it. (a) is the weakest form of support and (c) is disqualifying — fair market value must be determined without reference to referrals (§38.5). **8. (c)** The operative question is whether the communication solicits mortgage business, not the character of the account. Chapter 3 owns the identifier requirement; Chapter 24 owns the advertising rules (§38.8). **9. (b)** Any material that solicits mortgage business, regardless of medium. A platform with no convenient place for the identifier creates a design problem, not an exception (Chapter 3; §38.8). **10. (b)** Fair lending and discriminatory ad delivery. Audience selection for housing and credit advertising is a documented enforcement area; a lookalike audience built from past customers reproduces whatever pattern those customers contain. Chapter 25 owns fair lending (§38.8). **11. (b)** A term of the transaction or a proxy for a term. (a), (c), and (d) are permitted bases. Chapter 26 owns the rule — and it is the reason a specialist cannot simply be paid more for a harder file (§38.9). **12. (c)** Lower time-per-file, lower fallout, and less rate shopping. (a), (b), and (d) all describe charging more, which the compensation rule generally forecloses (§38.9). **13. (b)** The closing table. Goodwill peaks there and decays from that moment, which is why the review is asked for in person and the link is sent within the hour (§38.7). **14. (b)** A specific person, a specific reason, and a specific small task. (a) converts the relationship into a sales channel; (c) creates a RESPA and platform problem; (d) spends the only window you had (§38.7). **15. (c)** The \$100 gift card. RESPA Section 8's prohibition reaches "any person," and consumers are persons — which is why many compliance departments prohibit consumer referral incentives outright. Do not launch one on your own judgment (§38.5). **16. (b)** The lock was three days short of the contracted closing date the moment it was purchased. It could never have covered the named date. Chapter 30 makes this critique; Chapter 20 turns it into a rule. The extension cost 0.250 point on \$365,750 = \$914.38, lender-paid. **17. (b)** The same sequence, on the same dates, plus the agent debrief. The stressed file produces the better review, because certainty is proved by behavior under stress (§38.7). **18. (c)** When the delay was your own fault. You still call and still run the service portions; you do not ask someone to publicly recommend you for work you did badly (§38.7). **19. (c)** Telling the truth early, before you have a solution — because the agent's ability to protect the transaction depends entirely on lead time (§38.3). **20. (d)** This is the false statement. There is no such rule; the boundary is set by the employment agreement, trade-secret and company-property law, and privacy obligations under the Gramm-Leach-Bliley Act, and it varies by state and by contract. Read the agreement before you sign it and get the boundary confirmed by counsel (§38.6). **21.** Partner referral rate = (their transactions you originated) ÷ (their financed transactions). The denominator is hard because buyer-side volume is frequently invisible — you can often count a listing agent's closings from public records but not their buyer representations. So you ask. An agent who will not answer a normal business question about their volume has told you the relationship is not one (§38.3). **22.** Proportionate share = \$300 (one quarter-page panel at the rate card price). Excess = \$600 − \$300 = **\$300 per month**; \$300 × 12 = **\$3,600 per year**. That excess is a thing of value flowing from a settlement service provider to a referral source, and calling the arrangement "advertising" does not change what it is (§38.5). **23.** (1) The signed written agreement — what was agreed; (2) fair-market-value support such as a dated rate card — what it costs on the open market; (3) the invoice and your payment record — what you paid; (4) proof of performance, such as a tear sheet or screenshot — **this is the one that proves the arrangement was actually performed** (§38.5, Figure 38.1). **24.** At 80% of the **original** value the borrower may **request** cancellation of borrower-paid mortgage insurance. At 78% of the original value, mortgage insurance **terminates automatically**, subject to the loan being current. The governing statute is the **Homeowners Protection Act**. On the Linden Street file those are payments 125 and 137 against an original value of \$385,000 — \$308,000 and \$300,300 respectively. **25.** Input example: "ten database calls every Wednesday" or "two partner meetings every Tuesday." Output example: "close 60 loans" or "reach a 90% on-time close rate." An output alone is not a plan because you cannot execute it on a Tuesday — there is no action it names (§38.10). **26.** 22 ÷ 41 = **53.7%**. More than half the business depends on one relationship, so a retirement, a brokerage move to a captive lender, or a change of mind removes half the book within a quarter with nothing behind it. The time to build new sources is while the concentrated one is still producing, because that is the only time you can afford to (§38.10, and Case Study 2).