A borrower provides an MLO with financial documents that appear to be altered. The MLO notices inconsistent fonts and formatting. The MLO should:
Correct Answer
B) Request original documents and investigate the discrepancies
MLOs have a duty to verify documentation authenticity and prevent fraud. Suspicious alterations require investigation and requesting original documents from the source to ensure loan integrity.
Why This Is the Correct Answer
MLOs have a duty to verify documentation authenticity and prevent fraud. Suspicious alterations require investigation and requesting original documents from the source to ensure loan integrity.
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 appraisal comes in exactly at the contract price for a refinance transaction, but the MLO notices the comparable sales used are all from 6-8 months ago in a rapidly appreciating market with more recent sales available. This could indicate:
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A mortgage loan originator discovers that a borrower submitted falsified bank statements during the loan application process. What is the MLO's primary obligation under federal regulations?