An underwriting fee is considered an origination fee because it is a charge for the lender's services in processing and evaluating the mortgage application. Origination fees include any fees associated with creating and underwriting the loan.
* Appraisal fees (A), title insurance fees (C), and prepaid interest fees (D) are not considered origination fees; they are separate charges related to third-party services or pre-paid interest.
References:
* TILA-RESPA Integrated Disclosure Rule (TRID)
* CFPB Mortgage Origination Fee Guidelines

Temporary authority allows certain MLOs to originate loans while their license application is pending.
However, this authority only exists if the state participates and grants temporary authority. If a state does not grant temporary authority to transitioning MLOs, the individual cannot legally originate loans in that state under temporary authority.
"Temporary authority to operate applies only in states that have adopted the provisions of the SAFE Act regarding temporary authority. If a state does not grant temporary authority, the MLO cannot operate under it."
- SAFE Act, 12 U.S.C. § 5117; NMLS Guidance
Other events listed do not directly cause the loss of temporary authority unless dictated by state law.
References:
SAFE Act, 12 U.S.C. § 5117
NMLS, Temporary Authority to Operate FAQs

Mortgage loan originators are bound by ethical and legal requirements to disclose any material changes in a loan application that could affect the underwriting decision. Discovering that the property is no longer the borrower's primary residence is a significant change and may affect loan terms, program eligibility, and disclosures. According to the SAFE Act and industry best practices, the MLO must immediately report such information to their employer and/or the lender.
"A mortgage loan originator has a duty to promptly notify the lender of any material change in the application or circumstances of the borrower that could impact loan eligibility or the terms of the loan."
- SAFE MLO National Test Study Guide; NMLS UST Outline
Other options fail to fulfill the MLO's legal and ethical obligations and could be construed as misrepresentation or fraud.
References:
SAFE MLO National Test Study Guide
NMLS Uniform State Content Outline
CFPB, Mortgage Origination Rules

Redlining is the discriminatory practice of denying loans or other financial services to otherwise creditworthy applicants based on the location of the property, often in minority or economically disadvantaged neighborhoods. This is illegal under the Fair Housing Act and Equal Credit Opportunity Act (ECOA), as it constitutes a form of racial or ethnic discrimination in housing and lending.
* Steering (A) involves directing borrowers toward certain loan products for the lender's benefit, while low balling (D) and appraising (C) are unrelated to this form of discrimination.
References:
* Fair Housing Act
* Equal Credit Opportunity Act (ECOA)

Under Federal Reserve Regulation Z, which implements the Truth in Lending Act (TILA), interest is classified as a finance charge because it represents the cost of borrowing the funds over the life of the loan.
Finance charges include any fee that a borrower pays as a condition of obtaining the loan, such as interest, points, and certain fees.
* Notary fees (A), credit report fees (C), and title insurance (D) are not considered finance charges because they are third-party fees not directly related to the cost of borrowing.
References:
Truth in Lending Act (TILA), 12 CFR §1026.4
CFPB Regulation Z Guidelines