\n\t\t\t\t
For closed-end consumer loans, where the compensation is based on any term other than the credit amount Regulation Z prohibits creditors from issuing compensation to loan originators or mortgagees. <\/p>
Hence, creditors cannot base compensation on whether a term or a condition is present, increased, decreased, or eliminated.<\/p>\n
<\/p>\n
Regulation Z also bans loan originators and mortgagees from steering a customer to a certain loan when that loan offers greater compensation to the originator or mortgagee but does not offer any additional benefit to the customer. <\/p>
For instance, if a customer is suggested to choose an inferior loan by a mortgage broker just because it offers better compensation, it is considered steering and is not allowed.<\/p>\n
<\/p>\n
At times when the consumer compensates the loan originator directly, the loan originator may take compensation for the same transaction from another party. <\/p>
The creditors who compensate loan originators are also supposed to keep records for a minimum of two years.<\/p>\n
According to Regulation Z, the loan originator should provide loan options for every type of loan to the borrower and the options must include \u2013<\/p>\n
A loan with the lowest interest rate,<\/p>\n
A loan with the lowest origination fees,<\/p>\n
And a loan with the lowest rate for loans with certain facilities, like the loans with zero negative amortization or prepayment penalties. <\/p>
Along with that, the loan originator must get hold of offers from lenders with whom they regularly work.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t