Steering
Steering occurs when a loan officer directs a borrower toward a loan that generates higher compensation instead of the loan that best fits the borrower's needs.
Federal rules prohibit steering and require loan officers to act in the borrower's best interest. Mortgage recommendations must be based on qualification and financial goals — not compensation. This is another protection under RESPA.
Signs of steering include being told there is only one option when you qualify for several, being pushed toward a higher rate without explanation, or having your questions about alternatives dismissed. A good loan officer will show you multiple structures and explain the tradeoffs of each.
Why This Matters: Steering can cost you thousands in unnecessary interest or fees. Knowing your right to ask "what other options are available?" puts you in control of the conversation.
Common question
What is steering in mortgage lending?
Steering is when a loan officer directs you to a loan that pays them more instead of the loan that best fits your needs. It is prohibited; recommendations must be based on your qualification and goals.
How do I know if I am being steered?
Ask your loan officer to explain why they recommended a particular loan and whether other options were considered. You have the right to see alternative structures and compare.
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