An applicant provides paystubs showing gross monthly income of $7,200, but their W-2 from the same employer shows annual wages of $52,000. Assuming the paystubs represent bi-weekly pay, what discrepancy exists?
Correct Answer
B) The annualized paystub income significantly exceeds the W-2 wages
Bi-weekly paystubs of $7,200 monthly equal approximately $93,600 annually ($7,200 × 13 months), which significantly exceeds the W-2 wages of $52,000. This major discrepancy suggests potential paystub falsification or income manipulation.
Why This Is the Correct Answer
Bi-weekly paystubs of $7,200 monthly equal approximately $93,600 annually ($7,200 × 13 months), which significantly exceeds the W-2 wages of $52,000. This major discrepancy suggests potential paystub falsification or income manipulation.
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An elderly homeowner with significant equity is offered a loan that requires no income documentation and has monthly payments that exceed 60% of their fixed income. The loan originator assures them they can refinance before any payment issues arise. This practice is primarily an example of:
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A lender's mobile app prominently displays a 'pre-qualification' feature that asks for minimal information but generates loan amount estimates that are consistently 20-30% higher than what borrowers actually qualify for when they complete full applications. The app includes a disclaimer that estimates are 'subject to full underwriting.' This practice is most likely: