A mortgage loan originator discovers that a borrower submitted falsified employment verification documents three months after the loan closed. The MLO's company has already sold the loan to an investor. What is the MLO's primary obligation regarding SAR filing?
Correct Answer
C) The MLO must report to their institution, which has 30 days from discovery to file a SAR
Under the Bank Secrecy Act, financial institutions must file SARs within 30 calendar days after the date of initial detection of facts that may constitute a basis for filing. The MLO must report internally, and the institution files the SAR. Sale of the loan does not eliminate the reporting obligation for fraud discovered post-closing.
Why This Is the Correct Answer
Under the Bank Secrecy Act, financial institutions must file SARs within 30 calendar days after the date of initial detection of facts that may constitute a basis for filing. The MLO must report internally, and the institution files the SAR. Sale of the loan does not eliminate the reporting obligation for fraud discovered post-closing.
More Ethics & Fraud Questions
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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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Which of the following is the PRIMARY distinguishing factor between fraud for profit and fraud for housing?
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A borrower's credit report shows a social security number that was issued after the borrower's stated date of birth. The borrower claims this is a clerical error by the Social Security Administration. When does this situation require a SAR filing?