A borrower's mortgage application is denied due to insufficient credit history rather than negative credit information. The lender obtained a credit report during the application process. Under the FCRA, the lender:
Correct Answer
B) Must provide adverse action notice because a credit report was used in the decision
Under FCRA Section 615, adverse action notice is required whenever a credit report is used in whole or in part in making an adverse decision, regardless of whether the credit report contained negative information.
Why This Is the Correct Answer
Under FCRA Section 615, adverse action notice is required whenever a credit report is used in whole or in part in making an adverse decision, regardless of whether the credit report contained negative information.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
When collecting ethnicity information under HMDA, what should a loan officer do if an applicant refuses to provide the information?
Next Question
A property was removed from a Special Flood Hazard Area through a Letter of Map Amendment (LOMA) after the borrower obtained the original loan. The borrower requests to cancel the flood insurance. What is the lender's obligation?