A borrower provides a bank statement showing a large deposit of $15,000 three days before applying for a mortgage. The borrower claims it's from selling personal property but cannot provide documentation. How should the MLO handle this situation?
Correct Answer
B) Require a letter of explanation and evidence of the sale transaction
Large deposits require sourcing and documentation regardless of the borrower's explanation. The MLO must obtain a letter of explanation and supporting documentation (such as sale contract, bill of sale, or other proof) to verify the source of funds per standard underwriting guidelines.
Why This Is the Correct Answer
Large deposits require sourcing and documentation regardless of the borrower's explanation. The MLO must obtain a letter of explanation and supporting documentation (such as sale contract, bill of sale, or other proof) to verify the source of funds per standard underwriting guidelines.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
For a refinance transaction, the borrower asks the loan officer if they can use an appraisal that was completed 8 months ago for their original purchase. Under typical lending guidelines, this appraisal:
Next Question
A lender's appraisal review process reveals that 15% of appraisals from a particular appraiser come in exactly at contract price, while industry average is 5%. The lender should: