PROHIBITION ON STEERING INCENTIVES

(A) IN GENERAL: For any consumer credit transaction secured by real property or a dwelling, a loan originator may not arrange for a consumer to finance through the rate any origination fee or cost except bona fide third party settlement charges not retained by the creditor or loan originator.

(B) EXCEPTION: Notwithstanding sub-paragraph (A), a loan originator may arrange for a consumer to finance through the rate an origination fee or cost if:

(i) the loan originator does not receive any other compensation, directly or indirectly, from the consumer except the compensation that is financed through the rate;

(ii) no person who knows or has reason to know of the consumer-paid compensation to the loan originator, other than consumer, pays any compensation to the loan originator, directly or indirectly, in connection with the transaction; and

(iii) the consumer does not make an upfront payment of discount points, origination points, or fees, however denominated (other than bona fide third party settlement charges).

(A) limiting or affecting the amount of compensation received by a creditor upon the sale of a consummated loan to a subsequent purchaser;

(B) restricting a consumer's ability to finance, at the option of the consumer, including through principal or rate, any origination fees or costs permitted under this subsection, or the loan originator's right to receive such fees or costs (including compensation) from any person, subject to paragraph (2)(B), so long as such fees or costs do not vary based on the terms of the loan (other than the amount of the principal) or the consumer's decision about whether to finance such fees or costs; or

(C) prohibiting incentive payments to a loan originator based on the number of loans originated within a specified period of time.