A borrower provides a verbal income estimate of $80,000 annually during a pre-qualification call. The MLO later discovers through employment verification that the borrower's actual income is $65,000. What is the most appropriate next step?
Correct Answer
B) Issue a revised pre-qualification letter reflecting the verified income amount
Pre-qualification is based on unverified information, but when accurate information becomes available, the MLO should provide updated guidance. The Ability-to-Repay rule requires lenders to make reasonable efforts to verify income, and misleading borrowers with outdated information could violate fair lending principles.
Why This Is the Correct Answer
Pre-qualification is based on unverified information, but when accurate information becomes available, the MLO should provide updated guidance. The Ability-to-Repay rule requires lenders to make reasonable efforts to verify income, and misleading borrowers with outdated information could violate fair lending principles.
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An MLO provides pre-qualification based on a borrower's current employment but learns the borrower is starting a new job next month with a $10,000 salary increase. How should this information be handled?
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A borrower's Loan Estimate shows a $400 flood determination fee in the 'Services Borrower Cannot Shop For' section. At closing, the actual fee is $425. The lender did not shop for this service. What is the result?