CMCP Level III Exam - LO Comp and HMDA REG C
revision Questions 2025, all with Answers Verified
100% Correct
What is the definition of a loan originator? - ANSWER An organization or individual that
performs loan origination activities for compensation.
What are some examples of loan origination activities? - ANSWER Taking an application,
arranging a credit transaction, assisting a consumer in obtaining credit.
What does loan origination activities include? - ANSWER Offering or negotiating credit terms,
obtaining or making an extension of credit.
What is the distinction for employees who refer a consumer to a loan originator or creditor? -
ANSWER They provide contact information only.
What is the distinction for mentioning approved loan terms to a consumer? - ANSWER
Confirming loan terms already agreed upon by the consumer.
What is considered loan origination activity? - ANSWER Referral of a consumer to a loan
originator.
What is the special rule for employees who provide contact information for a loan originator? -
ANSWER They must not select the loan originator based on the consumer's financial
information.
,What is an example of not acting as a loan originator? - ANSWER Receptionist putting a
consumer in contact with the next available loan officer.
What is an example of acting as a loan originator? - ANSWER Receptionist selecting a loan
officer based on the consumer's financial characteristics.
Why is it important to train administrative staff on prohibited activities? - ANSWER To ensure
compliance with loan originator compensation rules.
What is the loan originator compensation rule? - ANSWER Referral of a consumer to a loan
originator is considered loan origination activity.
What is the role of administrative staff in placing consumers in contact with loan officers? -
ANSWER Providing contact information or directing consumers.
What is the exception for administrative staff in the loan originator compensation rule? -
ANSWER They can provide contact information without selecting a loan originator based on
financial information.
What is the scenario where a receptionist is not acting as a loan originator? - ANSWER When
they simply put the consumer in contact with the next available loan officer.
,What is the scenario where a receptionist is acting as a loan originator? - ANSWER When they
select a loan officer based on the consumer's financial characteristics.
What should administrative staff be trained on? - ANSWER Activities they cannot perform in
relation to loan origination.
Why is it important to train administrative staff on prohibited activities? - ANSWER To ensure
compliance with loan originator compensation rules.
What is the loan originator compensation rule? - ANSWER A rule published by the CFPB in 2013.
When was the revised version of the loan originator compensation rule published? - ANSWER
Early in 2013.
Where can the discussion on compensation variation be found? - ANSWER In the February 15,
2013 Federal Register on page 11328.
What did the CFPB state about the variation in time needed to originate different credit
products? - ANSWER There is no consistent variation.
What risk does the CFPB believe varying compensation for different loan products creates? -
ANSWER The risk that the Dodd-Frank Act seeks to avoid.
, What condition would need to be met for varying compensation to be acceptable? - ANSWER
The compensation would need to be carefully calibrated.
According to the CFPB, is it difficult or impossible to carefully calibrate compensation? -
ANSWER Difficult, if not impossible.
How would the CFPB view a lender trying to justify different compensation based on time to
originate? - ANSWER Skeptically.
What type of loan products did the CFPB mention in their comments? - ANSWER FHA loan,
nonconventional loan, and conventional loan.
What is the purpose of the Dodd-Frank Act? - ANSWER To avoid certain risks.
What input did the CFPB receive from the industry? - ANSWER Input on the variation in time to
originate different loan products.
What is the CFPB's belief about carefully calibrating compensation? - ANSWER It would be
difficult, if not impossible.
What risk does the CFPB believe varying compensation for different loan products creates? -
ANSWER The risk that the Dodd-Frank Act seeks to avoid.
revision Questions 2025, all with Answers Verified
100% Correct
What is the definition of a loan originator? - ANSWER An organization or individual that
performs loan origination activities for compensation.
What are some examples of loan origination activities? - ANSWER Taking an application,
arranging a credit transaction, assisting a consumer in obtaining credit.
What does loan origination activities include? - ANSWER Offering or negotiating credit terms,
obtaining or making an extension of credit.
What is the distinction for employees who refer a consumer to a loan originator or creditor? -
ANSWER They provide contact information only.
What is the distinction for mentioning approved loan terms to a consumer? - ANSWER
Confirming loan terms already agreed upon by the consumer.
What is considered loan origination activity? - ANSWER Referral of a consumer to a loan
originator.
What is the special rule for employees who provide contact information for a loan originator? -
ANSWER They must not select the loan originator based on the consumer's financial
information.
,What is an example of not acting as a loan originator? - ANSWER Receptionist putting a
consumer in contact with the next available loan officer.
What is an example of acting as a loan originator? - ANSWER Receptionist selecting a loan
officer based on the consumer's financial characteristics.
Why is it important to train administrative staff on prohibited activities? - ANSWER To ensure
compliance with loan originator compensation rules.
What is the loan originator compensation rule? - ANSWER Referral of a consumer to a loan
originator is considered loan origination activity.
What is the role of administrative staff in placing consumers in contact with loan officers? -
ANSWER Providing contact information or directing consumers.
What is the exception for administrative staff in the loan originator compensation rule? -
ANSWER They can provide contact information without selecting a loan originator based on
financial information.
What is the scenario where a receptionist is not acting as a loan originator? - ANSWER When
they simply put the consumer in contact with the next available loan officer.
,What is the scenario where a receptionist is acting as a loan originator? - ANSWER When they
select a loan officer based on the consumer's financial characteristics.
What should administrative staff be trained on? - ANSWER Activities they cannot perform in
relation to loan origination.
Why is it important to train administrative staff on prohibited activities? - ANSWER To ensure
compliance with loan originator compensation rules.
What is the loan originator compensation rule? - ANSWER A rule published by the CFPB in 2013.
When was the revised version of the loan originator compensation rule published? - ANSWER
Early in 2013.
Where can the discussion on compensation variation be found? - ANSWER In the February 15,
2013 Federal Register on page 11328.
What did the CFPB state about the variation in time needed to originate different credit
products? - ANSWER There is no consistent variation.
What risk does the CFPB believe varying compensation for different loan products creates? -
ANSWER The risk that the Dodd-Frank Act seeks to avoid.
, What condition would need to be met for varying compensation to be acceptable? - ANSWER
The compensation would need to be carefully calibrated.
According to the CFPB, is it difficult or impossible to carefully calibrate compensation? -
ANSWER Difficult, if not impossible.
How would the CFPB view a lender trying to justify different compensation based on time to
originate? - ANSWER Skeptically.
What type of loan products did the CFPB mention in their comments? - ANSWER FHA loan,
nonconventional loan, and conventional loan.
What is the purpose of the Dodd-Frank Act? - ANSWER To avoid certain risks.
What input did the CFPB receive from the industry? - ANSWER Input on the variation in time to
originate different loan products.
What is the CFPB's belief about carefully calibrating compensation? - ANSWER It would be
difficult, if not impossible.
What risk does the CFPB believe varying compensation for different loan products creates? -
ANSWER The risk that the Dodd-Frank Act seeks to avoid.
