A borrower provides bank statements showing a large deposit of $15,000 two weeks before loan application. What is the MLO's primary concern regarding this deposit?
Correct Answer
B) The deposit may represent borrowed funds that need to be sourced and documented
Under federal lending guidelines, large deposits must be sourced and documented to ensure they represent legitimate funds and not undisclosed debt. This protects against borrowers inflating their assets with borrowed money.
Why This Is the Correct Answer
Under federal lending guidelines, large deposits must be sourced and documented to ensure they represent legitimate funds and not undisclosed debt. This protects against borrowers inflating their assets with borrowed money.
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