A mortgage company's surety bond contains an exclusion for 'acts committed outside the scope of mortgage lending activities.' An MLO employed by the company commits fraud while also working as a real estate agent. Is this claim likely covered by the mortgage company's bond?
Correct Answer
B) No, because the fraudulent acts were outside mortgage lending scope
Surety bonds for mortgage companies typically cover only acts performed within the scope of mortgage lending activities. Fraudulent acts committed while working as a real estate agent would fall outside this scope and would not be covered by the mortgage company's surety bond, even if the same person holds an MLO license.
Why This Is the Correct Answer
Surety bonds for mortgage companies typically cover only acts performed within the scope of mortgage lending activities. Fraudulent acts committed while working as a real estate agent would fall outside this scope and would not be covered by the mortgage company's surety bond, even if the same person holds an MLO license.
More UST Questions
If a state regulatory authority finds violations during an examination, what factors typically influence the severity of enforcement action?
Under the SAFE Act, an individual who works for a federally chartered bank and takes mortgage applications must:
An MLO under investigation claims that certain requested documents are protected by attorney-client privilege because they were prepared in consultation with legal counsel. How should the state regulator respond?
Which scenario represents the MOST serious violation of appraisal independence requirements?
An MLO's license is suspended for 6 months, but after 3 months, the MLO demonstrates completion of remedial actions. Can the regulator lift the suspension early?
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Previous Question
A regulatory authority discovers that an MLO has been charging excessive fees and engaging in predatory lending practices over a two-year period. In addition to license revocation, what other administrative action is the authority likely to take?
Next Question
An MLO took a 4-hour continuing education course on January 15th and another 4-hour course on March 20th of the same year. Both courses covered federal mortgage regulations. How many hours can be applied toward the annual requirement?