An MLO discovers that their lender's rate sheet contains an error that benefits borrowers but costs the lender money. The MLO's good faith obligation is to:
Correct Answer
B) Immediately notify the lender of the pricing error
Good faith dealing applies to all parties in the transaction, including the lender. MLOs have a duty to act with integrity and honesty, which includes promptly reporting known errors that could harm any party to the transaction.
Why This Is the Correct Answer
Good faith dealing applies to all parties in the transaction, including the lender. MLOs have a duty to act with integrity and honesty, which includes promptly reporting known errors that could harm any party to the transaction.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
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A borrower's current mortgage has a 6.5% interest rate and 25 years remaining. A lender offers to refinance to a 6.0% rate with 30 years. Which factor would BEST demonstrate tangible net benefit?
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