A loan originator tells a borrower that their loan application has been approved when it has not yet been submitted to underwriting. This would most likely constitute which type of UDAAP violation?
Correct Answer
B) Deceptive practice
A deceptive practice under UDAAP is a material representation, omission, or practice that is likely to mislead consumers acting reasonably under the circumstances. Telling a borrower their loan is approved when it hasn't been submitted is a material misrepresentation likely to mislead the consumer.
Why This Is the Correct Answer
A deceptive practice under UDAAP is a material representation, omission, or practice that is likely to mislead consumers acting reasonably under the circumstances. Telling a borrower their loan is approved when it hasn't been submitted is a material misrepresentation likely to mislead the consumer.
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Previous Question
A loan originator includes credit life insurance, debt protection insurance, and extended warranty coverage in a borrower's loan without clearly explaining these products or obtaining proper consent. The borrower discovers these charges only at closing. This practice is known as:
Next Question
A lender offers a 'payment protection package' that includes unemployment insurance, accident insurance, and credit life insurance, totaling $4,200 annually. The MLO states this package 'ensures loan approval for borrowers with marginal credit' and finances it into the mortgage. The borrower's credit score is actually 720. This practice constitutes: