A lender's website advertisement states 'Approval in 24 hours guaranteed!' This statement is:
Correct Answer
B) Prohibited because loan approval cannot be guaranteed
Advertising 'guaranteed approval' is deceptive and prohibited because loan approval depends on underwriting criteria, borrower qualifications, and property factors that cannot be predetermined. Such statements violate truth-in-advertising principles.
Why This Is the Correct Answer
Advertising 'guaranteed approval' is deceptive and prohibited because loan approval depends on underwriting criteria, borrower qualifications, and property factors that cannot be predetermined. Such statements violate truth-in-advertising principles.
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?
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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:
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Previous Question
An MLO files a SAR about suspicious borrower activity. Two weeks later, the borrower's attorney contacts the MLO requesting copies of all documents related to the SAR filing, claiming attorney-client privilege requires disclosure. How should the MLO respond?
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