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Liability for Violation of the Loan Originator Compensation Rule

Q: Can a mortgage loan originator be held individually liable for a violation of the Loan Originator Compensation Rule?

A: Yes.

15 U.S. Code § 1639(d)(2) indicates that the maximum penalty for a loan originator's violation of the Loan Originator Compensation Rule is the greater of the actual damages sustained or three times the total compensation earned on the subject transactions; plus associated costs, such as reasonable attorney's fees. Noteworthy, personal liability may attach to the mortgage loan originator even if there are no actual damages sustained by a consumer.

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