A borrower provides a driver's license where the photo appears to match, but the MLO notices the license number format doesn't match the issuing state's standard format. The borrower claims it's a new format. What is the most appropriate action?
Correct Answer
B) Contact the state DMV to verify the license format and validity
When document formats appear suspicious, MLOs must verify authenticity through appropriate channels. Contacting the issuing authority is the proper due diligence step required under the Customer Identification Program (CIP) requirements of the USA PATRIOT Act.
Why This Is the Correct Answer
When document formats appear suspicious, MLOs must verify authenticity through appropriate channels. Contacting the issuing authority is the proper due diligence step required under the Customer Identification Program (CIP) requirements of the USA PATRIOT Act.
More Ethics & Fraud Questions
A lender's mobile app prominently displays a 'pre-qualification' feature that asks for minimal information but generates loan amount estimates that are consistently 20-30% higher than what borrowers actually qualify for when they complete full applications. The app includes a disclaimer that estimates are 'subject to full underwriting.' This practice is most likely:
An MLO discovers that multiple loan applications from different borrowers contain identical handwriting in the signature sections, despite different purported signers. The applications were submitted by different real estate agents. What is the most appropriate immediate action?
A mortgage loan originator receives a lead from a real estate agent about a potential borrower. Before calling this consumer, the MLO must:
An MLO tells Asian applicants that they need larger down payments 'because that's what investors prefer for your type of loan,' while telling similarly qualified white applicants that standard down payments are acceptable. This practice represents:
A mortgage company advertises 'Guaranteed approval for all credit types!' but internally has minimum credit score requirements of 580. This advertisement is problematic because it:
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Previous Question
An MLO is approached by a borrower who wants to purchase a home from the MLO's business partner in a separate real estate investment company. The MLO has no direct financial interest in the specific property. What should the MLO do?
Next Question
A loan officer notices that the borrower's employment verification shows a start date that is after the application date. This is a red flag for: