This is the practice of a mortgage professional guiding potential borrowers toward certain mortgage products in order to increase the amount of compensation the originator will earn.

• A. Puffing
• B. Churning
• C. Marketing
• D. Steering

Answer: (D)

Steering is when a mortgage professional guides potential borrowers toward specific loan products in order to increase the compensation they earn, rather than choosing loans that best fit the borrower’s needs. This shuffles the borrower’s best interests aside and can lead to higher costs or less suitable terms for them. It’s not just unethical; it’s prohibited in mortgage lending practices because it undermines fair treatment and informed decision-making, and lenders must present options that truly serve the borrower.

For contrast, puffing involves exaggerated or non-factual marketing statements about a product, not directing a borrower to a particular loan for personal gain. Churning means refinancing repeatedly to generate more fees, not steering to a higher-commission product. Marketing is legitimate outreach to inform borrowers about products. So the practice described is steering.