An MLO learns that a borrower who received a loan six months ago has been arrested for mortgage fraud in connection with loans at other institutions, but not involving the MLO's institution. The borrower's loan with the MLO's institution is performing normally. What is the SAR filing obligation?
Correct Answer
D) Review the borrower's file for potential suspicious indicators before determining SAR necessity
Knowledge of a borrower's arrest for mortgage fraud at other institutions should prompt a review of the borrower's file and transaction history for potential suspicious indicators. While the arrest alone may not require a SAR, it provides reasonable basis to examine whether the transaction with the MLO's institution involved suspicious activity that was previously undetected.
Why This Is the Correct Answer
Knowledge of a borrower's arrest for mortgage fraud at other institutions should prompt a review of the borrower's file and transaction history for potential suspicious indicators. While the arrest alone may not require a SAR, it provides reasonable basis to examine whether the transaction with the MLO's institution involved suspicious activity that was previously undetected.
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An MLO learns that their company's underwriter is consistently approving loans with questionable documentation for borrowers referred by a specific real estate agent who brings significant business to the company. What ethical obligation does the MLO have?
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