An applicant receives an adverse action notice that states 'insufficient income' as the primary reason and 'employment history' as an additional reason. The applicant's income actually exceeds the lender's minimum requirements. This notice:
Correct Answer
B) Violates Regulation B because the stated reasons must be accurate and specific
Regulation B requires that adverse action notices contain the principal reasons for the adverse action. These reasons must be accurate and specific to the actual factors that led to the denial. Providing inaccurate reasons, even if multiple reasons are listed, violates the regulation.
Why This Is the Correct Answer
Regulation B requires that adverse action notices contain the principal reasons for the adverse action. These reasons must be accurate and specific to the actual factors that led to the denial. Providing inaccurate reasons, even if multiple reasons are listed, violates the regulation.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A mortgage broker wants to share a borrower's credit report with the borrower's real estate agent to help negotiate a better purchase price. The borrower verbally agreed to this during a phone call. Under GLBA, is this sharing permitted?
Next Question
An HPML borrower requests to cancel the required escrow account after 6 years of timely payments. The current loan balance is 75% of the original property value, but recent market conditions suggest the current LTV is 85%. Can the escrow be cancelled?