A borrower provides an MLO with confidential financial information during pre-qualification that reveals they're planning to leave their current job after closing. How should the MLO handle this under good faith obligations?
Correct Answer
B) Explain that current employment must be verified and stable employment is required
Good faith requires honest dealing with all parties. The MLO must explain loan requirements honestly while maintaining appropriate confidentiality. The borrower needs to understand that employment stability is a loan requirement.
Why This Is the Correct Answer
Good faith requires honest dealing with all parties. The MLO must explain loan requirements honestly while maintaining appropriate confidentiality. The borrower needs to understand that employment stability is a loan requirement.
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:
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A lender discovers that local municipality fees have increased by $200 since the Loan Estimate was provided due to a city council vote. The lender wants to pass this cost to the borrower. This scenario:
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A lender issues a Loan Estimate on Monday. On Wednesday, the borrower emails expressing intent to proceed. On Thursday, the property appraisal comes in $20,000 lower than expected, requiring a loan amount reduction. When must a revised Loan Estimate be provided if one is issued?