A borrower expresses concern about their ability to afford the monthly payments on a loan they are applying for. How should an MLO respond under the duty of good faith and fair dealing?
Correct Answer
B) Suggest they reconsider the loan amount or explore other options that better fit their budget
Good faith and fair dealing requires MLOs to take borrower concerns seriously and act in their best interest. When a borrower expresses affordability concerns, the MLO should help them explore more suitable options rather than dismissing their concerns.
Why This Is the Correct Answer
Good faith and fair dealing requires MLOs to take borrower concerns seriously and act in their best interest. When a borrower expresses affordability concerns, the MLO should help them explore more suitable options rather than dismissing their concerns.
More Origination Questions
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Previous Question
A borrower obtained a conventional loan with PMI three years ago. The current loan balance is $185,000 and the original property value was $250,000. A new appraisal shows the property is now worth $280,000. Under the Homeowners Protection Act, what action must the lender take?
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An MLO is refinancing a borrower who has a second mortgage. The new first mortgage will have a higher balance to pay off both existing loans. Which analysis is required for tangible net benefit?