A borrower's financial situation has significantly improved since their initial loan application, making them eligible for better loan terms. The MLO's duty of good faith and fair dealing requires:
Correct Answer
D) Informing the borrower of the improved options available to them
Good faith and fair dealing requires MLOs to act in the borrower's best interest. When circumstances change that would benefit the borrower, the MLO should proactively inform them of better available options rather than proceeding with less favorable terms.
Why This Is the Correct Answer
Good faith and fair dealing requires MLOs to act in the borrower's best interest. When circumstances change that would benefit the borrower, the MLO should proactively inform them of better available options rather than proceeding with less favorable terms.
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Previous Question
An MLO issues a pre-approval letter that states 'subject to satisfactory appraisal and final underwriting approval.' The borrower uses this letter to make an offer, but the appraisal comes in $15,000 below the purchase price. What is the lender's obligation?
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Under what circumstances can a lender charge a borrower for providing the required Loan Estimate disclosure?