During the application process, an MLO tells a borrower that their interest rate is 'locked and guaranteed' for 60 days, but the actual rate lock agreement contains standard market volatility exceptions that could allow rate increases. The borrower doesn't read the rate lock document carefully. This situation represents:
Correct Answer
A) A deceptive practice because oral representations contradict the written terms
This represents a deceptive practice under UDAAP because the MLO's oral representation that the rate is 'guaranteed' contradicts the written agreement's volatility exceptions. The misleading oral statement creates false expectations about the certainty of the locked rate, regardless of whether rates actually change.
Why This Is the Correct Answer
This represents a deceptive practice under UDAAP because the MLO's oral representation that the rate is 'guaranteed' contradicts the written agreement's volatility exceptions. The misleading oral statement creates false expectations about the certainty of the locked rate, regardless of whether rates actually change.
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