An MLO notices that a borrower's employment verification letter appears to have been altered. The borrower insists it's legitimate. What should the MLO do?
Correct Answer
C) Report the suspicious document and contact the employer for verification
When documentation appears altered or suspicious, the MLO should both report the suspicious activity (potentially requiring a SAR) and take steps to verify the information independently. This dual approach ensures compliance with fraud reporting obligations while conducting due diligence.
Why This Is the Correct Answer
When documentation appears altered or suspicious, the MLO should both report the suspicious activity (potentially requiring a SAR) and take steps to verify the information independently. This dual approach ensures compliance with fraud reporting obligations while conducting due diligence.
More Ethics & Fraud Questions
A lender's mobile app prominently displays a 'pre-qualification' feature that asks for minimal information but generates loan amount estimates that are consistently 20-30% higher than what borrowers actually qualify for when they complete full applications. The app includes a disclaimer that estimates are 'subject to full underwriting.' This practice is most likely:
An MLO discovers that multiple loan applications from different borrowers contain identical handwriting in the signature sections, despite different purported signers. The applications were submitted by different real estate agents. What is the most appropriate immediate action?
A mortgage loan originator receives a lead from a real estate agent about a potential borrower. Before calling this consumer, the MLO must:
An MLO tells Asian applicants that they need larger down payments 'because that's what investors prefer for your type of loan,' while telling similarly qualified white applicants that standard down payments are acceptable. This practice represents:
A mortgage company advertises 'Guaranteed approval for all credit types!' but internally has minimum credit score requirements of 580. This advertisement is problematic because it:
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Previous Question
A lender's mobile app prominently displays a 'pre-qualification' feature that asks for minimal information but generates loan amount estimates that are consistently 20-30% higher than what borrowers actually qualify for when they complete full applications. The app includes a disclaimer that estimates are 'subject to full underwriting.' This practice is most likely:
Next Question
An MLO creates a comparative advertisement showing 'Bank A: 6.5% vs. Our Rate: 5.8%' The MLO's rate requires 2 discount points while Bank A's rate requires no points. This advertisement violates which principle?