A loan officer notices that the borrower's employment verification shows a start date that is after the application date. This is a red flag for:
Correct Answer
B) Identity theft
When employment verification shows inconsistent dates that don't align with the application timeline, this indicates potential identity theft where someone is using another person's identity and employment information. The SAFE Act requires MLOs to identify and report suspicious activity.
Why This Is the Correct Answer
When employment verification shows inconsistent dates that don't align with the application timeline, this indicates potential identity theft where someone is using another person's identity and employment information. The SAFE Act requires MLOs to identify and report suspicious activity.
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 provides a driver's license where the photo appears to match, but the MLO notices the license number format doesn't match the issuing state's standard format. The borrower claims it's a new format. What is the most appropriate action?
Next Question
When an MLO's compensation is higher for certain loan products, they must: