A borrower's bankruptcy attorney requests copies of all loan documents to prepare for proceedings. The borrower verbally authorized the MLO to cooperate but has not provided written consent. What should the MLO do?
Correct Answer
B) Require written authorization from the borrower before disclosure
Even though the attorney represents the borrower's interests, privacy regulations typically require written authorization for disclosure of nonpublic personal information to third parties, including attorneys, unless specifically compelled by court order.
Why This Is the Correct Answer
Even though the attorney represents the borrower's interests, privacy regulations typically require written authorization for disclosure of nonpublic personal information to third parties, including attorneys, unless specifically compelled by court order.
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
A loan officer routinely schedules appointments with female applicants during evening hours but meets male applicants during regular business hours, claiming 'women prefer flexible scheduling.' Several female applicants have complained about feeling uncomfortable with evening appointments. This practice constitutes:
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An MLO's company maintains its own internal do-not-call list separate from the National DNC Registry. A consumer is on the company's internal list but not on the National Registry. The MLO calls this consumer. What violation has occurred?