A real estate agent approaches an MLO with multiple loan applications where the purchase prices seem inflated compared to recent comparable sales. The agent claims the market is 'hot.' What should concern the MLO most?
Correct Answer
B) Potential property flipping scheme or inflated appraisal fraud
Consistently inflated purchase prices compared to comparable sales can indicate property flipping schemes or appraisal fraud, both forms of mortgage fraud that would require investigation and potentially SAR filing under fraud reporting obligations.
Why This Is the Correct Answer
Consistently inflated purchase prices compared to comparable sales can indicate property flipping schemes or appraisal fraud, both forms of mortgage fraud that would require investigation and potentially SAR filing under fraud reporting obligations.
More Ethics & Fraud Questions
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Previous Question
A borrower intentionally omits mentioning a second job that would qualify them for a larger loan amount because they want to avoid the tax implications of reporting the additional income. This scenario represents:
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A lender's fair lending examination shows that loan officers in predominantly minority neighborhoods receive different pricing discretion limits than those in predominantly white neighborhoods. This practice would most likely violate: