Maryland Module 3 Exam Questions &
Answers (Grade A+)
Maryland's Finder's Fee Law has been included in the Maryland
Code since 1979, and is considered a consumer protection statute.
It is used to discourage mortgage brokers from: 2 -
correct answer ✅1. charging excessive fees
2. Encouraging consumers to refinance loans repeatedly within a
short period of time with no appreciable benefit to them
Under the Mortgage Lender Law, a mortgage lender is defined as
any person who: 3 -
correct answer ✅1. is a mortgage broker
2. makes a mortgage loan to any person
3. is a mortgage servicer
The Mortgage Lender law defines a mortgage broker as a person
who: -
correct answer ✅1. for a fee or other valuable consideration,
whether received directly or indirectly, aids or assists a borrower in
obtaining a mortgage loan, and
,Maryland Module 3 Exam Questions &
Answers (Grade A+)
2. is not named as a lender in the agreement, note, deed of trust,
or other evidence of indebtedness
The Law defines a "finder's fee" as -
correct answer ✅any compensation or commission paid to the
broker by the borrower for the services of a broker in procuring,
arranging, or otherwise assisting in obtaining an loan or advance of
money
The Finder's Fee Law does not apply to -
correct answer ✅Commercial or auto loans
In Maryland, the Finder's Fee Law sets specific limits on -
correct answer ✅the amount of compensation that mortgage
brokers can earn in lending transactions
Types of Compensation Brokers Earn - Direct Compensation
Direct compensation includes: 4 -
correct answer ✅1. loan originations fees
2. document preparation fees
,Maryland Module 3 Exam Questions &
Answers (Grade A+)
3. application fees, and
4. processing fees
When are direct compensation fees paid to the broker? -
correct answer ✅Before closing
One form of direct compensation are markups or up-charges.
Markups or up-charges occur when -
correct answer ✅one settlement service provider increases the fee
charged by another settlement service provider, then retains the
additional fees.
Consumer's regard markups as (blank), and many have challenged
the practice in lawsuits -
correct answer ✅unethical price gouging
On the issue of markups, the Department of Housing and Urban
Development (HUD) has been at odds with the mortgage industry,
taking a position that favors the consumer. HUD argues that -
correct answer ✅markups made by and for the benefit of a single
party in violation of RESPA's prohibition of fee splitting.
, Maryland Module 3 Exam Questions &
Answers (Grade A+)
Some federal courts have sided with HUD, ruling -
correct answer ✅in favor of plaintiffs who claim markups are
illegal
Even though markups are not illegal in Maryland, -
correct answer ✅regulations promulgated by the Office of the
Commissioner of Financial Regulation prohibit them
The regulations state that licensees may not retain a fee, or any
portion of a fee, collected from a borrower if that fee is represented
by a -
correct answer ✅third-party charge for services provided in
connection with the loan
Not only are markups prohibited by Maryland's regulations, but
also -
correct answer ✅licensees are required to retain records that
show all amounts received from borrowers for the payment of
third-party settlement services, as well as records that show the
amounts actually paid out.
Answers (Grade A+)
Maryland's Finder's Fee Law has been included in the Maryland
Code since 1979, and is considered a consumer protection statute.
It is used to discourage mortgage brokers from: 2 -
correct answer ✅1. charging excessive fees
2. Encouraging consumers to refinance loans repeatedly within a
short period of time with no appreciable benefit to them
Under the Mortgage Lender Law, a mortgage lender is defined as
any person who: 3 -
correct answer ✅1. is a mortgage broker
2. makes a mortgage loan to any person
3. is a mortgage servicer
The Mortgage Lender law defines a mortgage broker as a person
who: -
correct answer ✅1. for a fee or other valuable consideration,
whether received directly or indirectly, aids or assists a borrower in
obtaining a mortgage loan, and
,Maryland Module 3 Exam Questions &
Answers (Grade A+)
2. is not named as a lender in the agreement, note, deed of trust,
or other evidence of indebtedness
The Law defines a "finder's fee" as -
correct answer ✅any compensation or commission paid to the
broker by the borrower for the services of a broker in procuring,
arranging, or otherwise assisting in obtaining an loan or advance of
money
The Finder's Fee Law does not apply to -
correct answer ✅Commercial or auto loans
In Maryland, the Finder's Fee Law sets specific limits on -
correct answer ✅the amount of compensation that mortgage
brokers can earn in lending transactions
Types of Compensation Brokers Earn - Direct Compensation
Direct compensation includes: 4 -
correct answer ✅1. loan originations fees
2. document preparation fees
,Maryland Module 3 Exam Questions &
Answers (Grade A+)
3. application fees, and
4. processing fees
When are direct compensation fees paid to the broker? -
correct answer ✅Before closing
One form of direct compensation are markups or up-charges.
Markups or up-charges occur when -
correct answer ✅one settlement service provider increases the fee
charged by another settlement service provider, then retains the
additional fees.
Consumer's regard markups as (blank), and many have challenged
the practice in lawsuits -
correct answer ✅unethical price gouging
On the issue of markups, the Department of Housing and Urban
Development (HUD) has been at odds with the mortgage industry,
taking a position that favors the consumer. HUD argues that -
correct answer ✅markups made by and for the benefit of a single
party in violation of RESPA's prohibition of fee splitting.
, Maryland Module 3 Exam Questions &
Answers (Grade A+)
Some federal courts have sided with HUD, ruling -
correct answer ✅in favor of plaintiffs who claim markups are
illegal
Even though markups are not illegal in Maryland, -
correct answer ✅regulations promulgated by the Office of the
Commissioner of Financial Regulation prohibit them
The regulations state that licensees may not retain a fee, or any
portion of a fee, collected from a borrower if that fee is represented
by a -
correct answer ✅third-party charge for services provided in
connection with the loan
Not only are markups prohibited by Maryland's regulations, but
also -
correct answer ✅licensees are required to retain records that
show all amounts received from borrowers for the payment of
third-party settlement services, as well as records that show the
amounts actually paid out.
