Under which regulation is loan originator compensation regulated?

The regulation that governs loan originator compensation is primarily found within the Dodd-Frank Act's Mortgage Reform and Anti-Predatory Lending Act. This act established important provisions aimed at ensuring that loan originators are compensated in a manner that promotes fair lending practices and discourages predatory lending behavior. It provides regulatory guidelines to reduce conflicts of interest that may arise from compensation structures, thereby ensuring that loan originators act in the best interest of borrowers.

This regulation outlines specific rules regarding how loan originators can be compensated, including restrictions on bonuses or incentives tied to specific loan terms or conditions. As a result, it enhances transparency and encourages responsible lending practices within the mortgage industry.

In contrast, the other options do not specifically address loan originator compensation. The Home Mortgage Disclosure Act primarily focuses on data collection and reporting regarding mortgage lending, while the Truth in Lending Act aims to promote informed borrowing through transparent disclosures of credit terms. Federal Housing Administration Guidelines offer guidance on FHA loan programs and underwriting standards but do not set forth specific compensation regulations for loan originators. Therefore, the Dodd-Frank Act's provisions are central in this context for regulating loan originator compensation.