Ethics
Ethical duties in origination
- Honesty and accuracy: never inflate income, assets, occupancy, or value. Occupancy fraud, such as claiming a primary residence for an investment property, and straw-buyer schemes are felonies.
- Fair lending: treat similarly situated applicants consistently; no steering, redlining, or disparate treatment based on protected characteristics.
- Conflicts of interest: disclose affiliate relationships and referral arrangements; do not accept undisclosed things of value.
- Confidentiality and privacy: safeguard nonpublic personal information under GLBA and share only on a need-to-know basis.
- Advertising: include the NMLS unique identifier where required and avoid deceptive rate, no-cost, or APR claims.
- UDAAP: unfair, deceptive, or abusive acts are prohibited even when no specific rule is broken.
- Reporting and cooperation: respond truthfully to regulators and self-report material violations.
Worked example
A real estate agent offers a $500 gift card for every buyer you refer to her preferred title company. Accepting violates RESPA Section 8 because it is a thing of value for a referral of settlement-service business. Disclosure does not cure it. The ethical response is to decline and document the request.
Traps that cost marks
Everyone does it is not a defense. A disclosed conflict can still violate RESPA. Pressure to make the numbers work on an appraisal or income document is fraud, not salesmanship. Client confidentiality does not justify hiding a material misstatement from the lender.