An MLO discovers that a borrower has provided false information on their loan application after the loan has been submitted to underwriting. What action best demonstrates good faith and fair dealing?
Correct Answer
B) Immediately notify the lender and work with the borrower to correct the information
Good faith and fair dealing requires MLOs to act with honesty and integrity. When false information is discovered, the MLO must promptly notify the lender and work to correct the issue rather than allowing fraudulent information to proceed through the system.
Why This Is the Correct Answer
Good faith and fair dealing requires MLOs to act with honesty and integrity. When false information is discovered, the MLO must promptly notify the lender and work to correct the issue rather than allowing fraudulent information to proceed through the system.
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An MLO is comparing a conventional loan with PMI versus an FHA loan for a borrower with 5% down payment. The conventional loan rate is 4.0% with 0.5% PMI, while the FHA rate is 4.25% with 0.85% MIP. What additional factor is crucial for an accurate comparison?
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