A loan originator notices that a borrower's employment verification letter has a phone number that, when called, goes directly to the borrower's personal cell phone voicemail. The borrower explains that their small company doesn't have a receptionist. What should the MLO do?
Correct Answer
B) Request additional employment documentation such as tax returns or pay stubs
While the explanation may be legitimate, the MLO should request additional documentation to verify employment when standard verification methods raise questions. This follows due diligence requirements under federal regulations to properly verify borrower information.
Why This Is the Correct Answer
While the explanation may be legitimate, the MLO should request additional documentation to verify employment when standard verification methods raise questions. This follows due diligence requirements under federal regulations to properly verify borrower information.
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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A borrower asks an MLO to expedite processing by skipping certain verification steps that are typically required but not legally mandated. The borrower claims financial hardship and urgency. How should the MLO respond?