Which definition best describes steering in mortgage lending?

Which definition best describes steering in mortgage lending?

• A. Pushing a client into a transaction that makes more sense for your wallet than the client’s well-being
• B. Pushing a client to take the lowest rate regardless of other terms
• C. Kept, neutral discussion of options without advice
• D. Allowing the borrower to choose any loan without pressure

Answer: (B)

Steering happens when a loan originator guides you toward a loan product mainly to benefit themselves, not what's best for your finances. Pushing you to take the lowest rate regardless of other terms is a clear example because it signals the focus is on the lender’s gain rather than your overall needs. A rate alone can be attractive, but if it comes with high fees, unfavorable terms, or hidden costs, the total cost of the loan may end up higher for you. A fair approach is to present a full range of options, disclose all costs and trade-offs, and let you decide based on your situation. Neutral discussions or allowing you to choose without pressure aren’t steering; the rate-focused push described in that choice is the hallmark of steering.

Steering happens when a loan originator guides you toward a loan product mainly to benefit themselves, not what's best for your finances. Pushing you to take the lowest rate regardless of other terms is a clear example because it signals the focus is on the lender’s gain rather than your overall needs. A rate alone can be attractive, but if it comes with high fees, unfavorable terms, or hidden costs, the total cost of the loan may end up higher for you. A fair approach is to present a full range of options, disclose all costs and trade-offs, and let you decide based on your situation. Neutral discussions or allowing you to choose without pressure aren’t steering; the rate-focused push described in that choice is the hallmark of steering.