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.
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