A borrower's employment verification shows they work for a company, but when the MLO calls the main company number, the receptionist has never heard of the borrower. However, the direct number on the verification form reaches someone who confirms employment. This situation suggests:
Correct Answer
B) Potential employment fraud with a confederate answering the direct line
When a company's main number doesn't recognize an employee but a direct number confirms employment, this suggests potential fraud where someone is posing as an employer. This is a common employment fraud scheme using accomplices to verify false employment.
Why This Is the Correct Answer
When a company's main number doesn't recognize an employee but a direct number confirms employment, this suggests potential fraud where someone is posing as an employer. This is a common employment fraud scheme using accomplices to verify false employment.
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 borrower claims rental income from a property they purchased 8 months ago, providing a lease dated 6 months ago. However, property records show the previous owner had an active lease with the same tenant that expired 2 months before the borrower's purchase. What does this timeline suggest?
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A mortgage lender's statistical analysis shows that their denial rate for Native American applicants is 15% higher than for white applicants with similar credit profiles. However, the lender's overall portfolio performance is strong, and they argue this difference reflects unmeasured risk factors. Under current fair lending enforcement standards, this situation would: