A self-employed borrower's bank statements show regular deposits labeled as 'business income,' but cross-referencing with their business tax returns reveals the deposited amounts exceed reported gross receipts by 40%. What violation does this suggest?
Correct Answer
C) Inflated bank deposits to overstate loan qualification income
When bank deposits significantly exceed tax return income, it typically indicates inflated deposits designed to overstate income for loan qualification purposes. This represents income falsification for mortgage fraud, as the tax returns likely reflect actual business performance.
Why This Is the Correct Answer
When bank deposits significantly exceed tax return income, it typically indicates inflated deposits designed to overstate income for loan qualification purposes. This represents income falsification for mortgage fraud, as the tax returns likely reflect actual business performance.
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?
A mortgage loan originator receives a lead from a real estate agent about a potential borrower. Before calling this consumer, the MLO must:
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A mortgage company receives a consumer's written consent to call their cell phone for marketing purposes. Six months later, the consumer changes their mind and verbally revokes consent during a call. How long does this revocation remain valid?