What activity is a residential mortgage originator explicitly prohibited from doing?

The activity that is explicitly prohibited for a residential mortgage originator is compensating an appraiser for services rendered. This restriction is in place to prevent any potential conflicts of interest that could arise if a mortgage originator were to influence an appraiser's judgment through compensation. The integrity of the appraisal process is vital for ensuring fair market value assessments, which contribute to the stability of the mortgage lending environment.

While negotiating loan terms with borrowers is a fundamental part of a mortgage originator's role, they must do so within the bounds of regulations and ethical guidelines. Offering financial services without a license is also prohibited; it is essential for mortgage originators to possess the necessary certification and follow state laws. Processing loan applications is part of the standard responsibilities of a mortgage originator; therefore, that action aligns with their role rather than being prohibited.