A borrower's credit report shows a social security number that was issued after the borrower's stated date of birth. The borrower claims this is a clerical error by the Social Security Administration. When does this situation require a SAR filing?
Correct Answer
D) Only if other red flags are present in addition to the SSN discrepancy
While SSN discrepancies can indicate identity theft, they can also result from administrative errors. A SAR should be filed when the SSN discrepancy is combined with other suspicious indicators or when reasonable efforts to verify the explanation are unsuccessful. The totality of circumstances determines whether the activity is suspicious under BSA guidelines.
Why This Is the Correct Answer
While SSN discrepancies can indicate identity theft, they can also result from administrative errors. A SAR should be filed when the SSN discrepancy is combined with other suspicious indicators or when reasonable efforts to verify the explanation are unsuccessful. The totality of circumstances determines whether the activity is suspicious under BSA guidelines.
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:
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A borrower admits to an MLO that they inflated their income on the initial application but wants to provide correct information now. What should the MLO do?
An MLO's family member works as an appraiser and occasionally appraises properties for the MLO's borrowers through the normal appraisal management company rotation. The MLO never requests this appraiser specifically. Is this arrangement problematic?
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A borrower submits a rental agreement showing $2,500 monthly income from a property they claim to own. Which of the following would be the MOST significant red flag indicating potential rental income fraud?
A borrower inflates their income on a loan application for a vacation home they plan to rent out occasionally but also use personally. The primary motivation is investment return. This scenario constitutes:
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Previous Question
A mortgage loan originator discovers that a borrower submitted falsified employment verification documents three months after the loan closed. The MLO's company has already sold the loan to an investor. What is the MLO's primary obligation regarding SAR filing?
Next Question
A borrower intentionally omits mentioning a second job that would qualify them for a larger loan amount because they want to avoid the tax implications of reporting the additional income. This scenario represents: