During the final walk-through, the borrower discovers significant water damage that wasn't present during the initial inspection. What should the MLO advise?
Correct Answer
C) Delay closing until the issue is resolved or properly addressed
Material changes to the property condition discovered before closing should be addressed before proceeding. The borrower has the right to ensure the property is in the expected condition, and closing should be delayed until the issue is properly resolved.
Why This Is the Correct Answer
Material changes to the property condition discovered before closing should be addressed before proceeding. The borrower has the right to ensure the property is in the expected condition, and closing should be delayed until the issue is properly resolved.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
People Also Study
Federal Mortgage-Related Laws
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 loan originator receives partial application information on Monday at 2:00 PM, including the borrower's name, income, and SSN. The property address and estimated value are provided Tuesday at 10:00 AM, and the loan amount is submitted Wednesday at 11:00 AM. When must the Loan Estimate be delivered?
Next Question
A borrower requests to waive escrow on a conventional loan with 15% down payment. The property is located in a flood zone requiring flood insurance. Which statement is most accurate?