In a training scenario, a borrower asks whether the company will file a suspicious activity report. What action best follows the rule?
Correct Answer
B) Do not tell the borrower that a SAR may be filed
Why this is correct: The rule from 31 CFR 1029.320 requires that information about a SAR filing remain confidential. In a training scenario simulating a borrower's question, the action that best follows the rule is to maintain this confidentiality by not disclosing any information about a potential or actual SAR. Therefore, the correct action is to "Do not tell the borrower that a SAR may be filed." Why the other choices are wrong: The choice to "Handle records, reports, and required notices with a sales script rather than the required file action" is wrong because using a sales script to address a SAR inquiry could lead to an improper disclosure; the required action is specific and non-disclosure. The choice to "Use the policy exception request as a reason to postpone the required compliance step" is wrong because SAR confidentiality cannot be postponed; it must be applied immediately when the question is asked. The choice to "Skip the rule because the policy exception request appears routine" is wrong because no exception allows skipping the core confidentiality requirement of SAR rules. Exam tip: In any scenario—real or training—the rule is simple: never tip off a borrower about a SAR. There are no exceptions for routine processes or scripts.
Why This Is the Correct Answer
The correct response is "Do not tell the borrower that a SAR may be filed". SAR rules include confidentiality; the borrower should not be tipped off about a SAR filing or potential filing.
Why the Other Options Are Wrong
Option A: Handle records, reports, and required notices with a sales script rather than the required file action.
Handle records, reports, and required notices with a sales script rather than the required file action. is not correct because it bypasses the rule supported by the explanation.
Option C: Use the policy exception request as a reason to postpone the required compliance step.
Use the policy exception request as a reason to postpone the required compliance step. is not correct because it bypasses the rule supported by the explanation.
Option D: Skip the rule because the policy exception request appears routine.
Skip the rule because the policy exception request appears routine. is not correct because it bypasses the rule supported by the explanation.
Memory Technique
For SAR questions, no tipping is almost always the tested ethics point.
Exam Tip
For SAR questions, no tipping is almost always the tested ethics point.
Common Mistakes to Avoid
- -Customer service transparency does not include disclosing SAR activity to the subject.
More Ethics & Fraud Questions
In a closing-readiness check, a disclosure specialist sees facts tied to Appraisal Fraud Detection. What should the file reflect?
An MLO recommends a loan with a low initial payment that will increase sharply in two years. The borrower says retirement income will be fixed and asks whether the payment can change. What is the appropriate response?
An MLO alters a bank statement to make the applicant's account balance appear higher and submits it to underwriting. Which response is appropriate?
A branch manager asks about a loan file because marketing proposes a rate the company is not prepared to offer. What should happen?
A borrower wants cash for necessary home repairs. A proposed refinance provides $15,000 cash but adds $12,000 in costs and extends repayment by 15 years. What is the best next step for the MLO?
Before closing, the team discovers that an ad shows an interest rate but omits the APR presentation. What is the safest compliant answer?
The loan team is resolving Privacy and Confidentiality during a quality-control sample. Which action best fits the rule?
A house last sold for $185,000 in January. In March it changes hands 3 times in 9 days, reaching $410,000, with the same appraiser and the same closing agent on every leg. Assuming the parties colluded to inflate appraisals without improvements to support the higher prices, what fraud scheme does this pattern illustrate?
For closings involving federally related mortgage loans, a title company pays a real estate brokerage $75 for each referred client who closes. The brokerage only passes along the client’s name and number. Does this referral payment comply with RESPA Section 8?
Before closing, the team discovers that a loan officer wants different terms because of a protected applicant characteristic. What is the safest compliant answer?
People Also Study
Federal Mortgage-Related Laws
24% of exam
General Mortgage Knowledge
20% of exam
Mortgage Loan Origination Activities
27% of exam
Uniform State Test Content
11% of exam
Related Study Resources
Previous Question
Before the team acts on a servicing handoff check, an operations lead must address Fraud Prevention. Which response is most defensible?
Next Question
During a post-application update, a policy analyst encounters a Confidentiality and Privacy issue. Which response should separate the real requirement from a near-miss shortcut?