Tennessee Real Estate License Exam Practice Question
A mortgage broker offers you a percentage of his commission on every loan resulting from your client referrals. You then steer clients to this broker without the REQUIRED disclosure. Which of the following is TRUE?
Correct Answer: D
Rationale: Steering clients to a mortgage broker for personal gain without proper disclosure violates ethical standards and regulations, which can lead to serious consequences, including potential license revocation.
Option A is incorrect; while referrals might seem beneficial, failing to disclose the commission undermines trust and legality. Option B is not applicable here; a conflict of interest statement may not suffice to address the lack of disclosure. Option C is misleading; while a license may be required for certain activities, the immediate concern is the unethical referral practice itself, which can lead to disciplinary actions, including investigation and license revocation.
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