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:
Correct Answer
C) Disparate treatment because different information is provided based on race
This is disparate treatment under the Fair Housing Act and ECOA because the MLO is intentionally providing different information and requirements to borrowers based on their race or national origin. Even if investors had such preferences (which would also be discriminatory), the MLO cannot treat applicants differently based on protected class characteristics.
Why This Is the Correct Answer
This is disparate treatment under the Fair Housing Act and ECOA because the MLO is intentionally providing different information and requirements to borrowers based on their race or national origin. Even if investors had such preferences (which would also be discriminatory), the MLO cannot treat applicants differently based on protected class characteristics.
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:
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:
A borrower admits to an MLO that they inflated their income on the initial application but wants to provide correct information now. What should the MLO do?
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Previous 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?
Next Question
An MLO's family member works as an appraiser and occasionally appraises properties for the MLO's borrowers through the normal appraisal management company rotation. The MLO never requests this appraiser specifically. Is this arrangement problematic?