EthicsQuestion 292 of 400
Which of the following is a classic red flag for possible mortgage fraud on an application?
a.The borrower provides a clear, verifiable two-year employment history
b.A large, unexplained deposit appears in the borrower's account just before closing
c.The appraisal is supported by three recent comparable sales
d.The borrower's stated income matches verified W-2s
Explanation
An undocumented, unexplained large deposit right before closing is a red flag because it may indicate an undisclosed loan or a gifted down payment being hidden. Verifiable employment, well-supported appraisals, and income that matches W-2s are signs of a clean file, not red flags.
Law Reference: Mortgage fraud red flagsPractice all 400 questions free — no signup required.
Related questions on this topic
- A fraudster uses a stolen Social Security number and driver's license to apply for a mortgage in someone else's name without their knowledge. This type of fraud is:
- In a fraud-for-profit scheme involving inflated appraisals and quick resales (flipping), who is typically harmed?
- A family exaggerates their income slightly so they can qualify to buy a home they intend to live in. This is generally categorized as:
- A file shows the same phone number for the borrower, the seller, and the appraiser, and the sale price is far above the neighborhood. These facts most likely indicate:
- Which of the following is NOT a prohibited basis for discrimination under the Equal Credit Opportunity Act (ECOA)?
- A creditworthy single woman is told she must have a male cosigner even though her income and credit qualify her on her own. This most likely violates ECOA on the basis of:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against NMLS SAFE Mortgage Loan Originator National Test · How we review