A borrower's employer confirms employment and salary two days before closing, but on closing day, the borrower reveals they gave notice and their last day is tomorrow. The loan has already been funded by the lender. What should occur?
Correct Answer
C) Stop the closing and return the funds to the lender immediately
Employment status is a material change that affects the borrower's ability to repay. Even if funds are disbursed, the closing should be stopped, and funds returned to prevent potential fraud. The borrower's employment change materially affects their qualifying income.
Why This Is the Correct Answer
Employment status is a material change that affects the borrower's ability to repay. Even if funds are disbursed, the closing should be stopped, and funds returned to prevent potential fraud. The borrower's employment change materially affects their qualifying income.
More Mortgage Knowledge Questions
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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