An MLO working for a bank that originated 200 covered loans last year notices unusual patterns in denial rates by race in their portfolio. What is the MLO's primary obligation regarding this observation?
Correct Answer
B) Document the observation and report it through internal compliance channels
MLOs should report potential fair lending concerns through their institution's internal compliance procedures. The institution's compliance department is responsible for conducting proper analysis and determining appropriate action, including potential regulatory reporting.
Why This Is the Correct Answer
MLOs should report potential fair lending concerns through their institution's internal compliance procedures. The institution's compliance department is responsible for conducting proper analysis and determining appropriate action, including potential regulatory reporting.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A mortgage broker charges borrowers a $500 'processing fee' but actually performs no processing services, instead paying a third-party processor $300 and keeping $200. Under RESPA Section 8:
Next Question
A lender must provide an adverse action notice within how many days of taking adverse action on a mortgage application?