Which scenario best demonstrates an MLO's duty of good faith and fair dealing?
Correct Answer
B) Explaining all loan options that the borrower qualifies for, including their benefits and drawbacks
Good faith and fair dealing requires MLOs to act in the borrower's best interest by providing complete, honest information about available loan options. This includes explaining both benefits and drawbacks so borrowers can make informed decisions.
Why This Is the Correct Answer
Good faith and fair dealing requires MLOs to act in the borrower's best interest by providing complete, honest information about available loan options. This includes explaining both benefits and drawbacks so borrowers can make informed decisions.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
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