A borrower is $340 a month short on the ratio. The originator suggests she ask her employer to describe her occasional weekend shifts as a guaranteed 8 hours a week on the verification. Would describing nonguaranteed shifts as guaranteed income constitute a material misrepresentation?
Correct Answer
C) Fraud: the 8 hours would be called guaranteed when they are not
Asking an employer to characterize irregular work as guaranteed is procuring a false statement on a document the lender relies on, whatever hours were actually worked. Other choices: the shifts being real is exactly what makes the lie plausible rather than lawful; an employer willing to sign it is a second person committing the same act; and it is not fraud only if the loan later defaults and the file is examined, because the misstatement is complete when the verification goes in. Source: Income misrepresentation; the figures are the file in the stem
Why This Is the Correct Answer
Asking an employer to characterize irregular work as guaranteed is procuring a false statement on a document the lender relies on, whatever hours were actually worked. Other choices: the shifts being real is exactly what makes the lie plausible rather than lawful; an employer willing to sign it is a second person committing the same act; and it is not fraud only if the loan later defaults and the file is examined, because the misstatement is complete when the verification goes in. Source: Income misrepresentation; the figures are the file in the stem
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