During the loan process, an MLO discovers that the lender has made an error that benefits the borrower by reducing their interest rate. What does good faith and fair dealing require?
Correct Answer
B) Notify the lender of the error immediately
Good faith and fair dealing requires honesty in all dealings, including with lenders. Even if an error benefits the borrower, the MLO must act with integrity and report the error promptly. Good faith applies to all parties in the transaction.
Why This Is the Correct Answer
Good faith and fair dealing requires honesty in all dealings, including with lenders. Even if an error benefits the borrower, the MLO must act with integrity and report the error promptly. Good faith applies to all parties in the transaction.
More Origination Questions
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For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
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