An MLO discovers that a borrower provided accurate information, but the loan processor internally altered the debt-to-income ratio to make the loan appear to qualify. What is the MLO's obligation?
Correct Answer
C) Report the incident as potential internal fraud and file appropriate reports
Internal fraud by employees must be reported under SAR filing requirements. The Bank Secrecy Act covers suspicious activities by institution insiders, and altering loan documentation constitutes fraud that must be reported to appropriate authorities.
Why This Is the Correct Answer
Internal fraud by employees must be reported under SAR filing requirements. The Bank Secrecy Act covers suspicious activities by institution insiders, and altering loan documentation constitutes fraud that must be reported to appropriate authorities.
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