During the application process, an MLO realizes that a borrower would qualify for a government program with better terms, but the MLO's company doesn't offer that program type. What does good faith require?
Correct Answer
A) Inform the borrower about the government program and their options
Good faith dealing requires MLOs to act in the borrower's best interest, which includes informing them of potentially beneficial programs even if the MLO cannot originate those loans. This ensures the borrower can make a fully informed decision.
Why This Is the Correct Answer
Good faith dealing requires MLOs to act in the borrower's best interest, which includes informing them of potentially beneficial programs even if the MLO cannot originate those loans. This ensures the borrower can make a fully informed decision.
More Origination Questions
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How long is a typical pre-approval letter valid?
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During a construction loan inspection, the lender discovers that the contractor has installed windows that do not meet the energy efficiency specifications outlined in the approved construction plans. The contractor claims the windows are 'equivalent quality.' What should the MLO advise?
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A mortgage broker discovers that an appraiser they frequently use has been providing consistently high valuations that help deals close. The broker never directly instructs the appraiser on value but continues to use this appraiser exclusively. Under AIR, this practice is: