A borrower's bank statement shows monthly service fees of $25 and overdraft fees totaling $150 over two months. How should the MLO address this in the loan evaluation?
Correct Answer
C) Consider this as evidence of potential cash flow management issues
Overdraft fees and patterns of insufficient funds may indicate cash flow management problems and should be considered when evaluating the borrower's ability to manage mortgage payments. This falls under prudent lending practices.
Why This Is the Correct Answer
Overdraft fees and patterns of insufficient funds may indicate cash flow management problems and should be considered when evaluating the borrower's ability to manage mortgage payments. This falls under prudent lending practices.
More Origination Questions
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