Which of the following is an acceptable condition on which to base a mortgage loan originator's compensation?

A fixed percentage of the loan amount is an acceptable condition on which to base a mortgage loan originator's compensation. This method is compliant with federal regulations because it aligns the compensation directly with the size of the loan being originated, ensuring that the mortgage loan originator is incentivized to provide appropriate loan options that meet the needs of the borrower.

Regulations, such as those outlined in the Truth in Lending Act (TILA) and the Loan Originator Compensation Rule, specifically aim to create a transparent and fair compensation structure for MLOs. Allowing compensation based on a fixed percentage of the loan amount maintains industry standards, as it does not encourage predatory lending practices or unfairly inflate the cost of loans based on factors such as the borrower's creditworthiness or other potentially discriminatory criteria.

In contrast, methods like compensation based on the borrower's credit score or total amount of fees charged could lead to unethical practices or incentivize MLOs to steer borrowers toward specific loans that may not be in their best interest. Such practices are discouraged and may violate federal laws. This underscores why a fixed percentage of the loan amount is the most compliant and acceptable way to determine MLO compensation.