EthicsQuestion 293 of 400
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:
a.A normal purchase transaction
b.A well-documented gift of equity
c.A required government subsidy
d.Possible collusion / fraud for profit
Explanation
Shared contact information among supposedly independent parties plus an inflated price suggests collusion, a hallmark of fraud-for-profit rings. It is not a normal arm's-length transaction, a documented gift of equity is disclosed and legitimate, and no government subsidy explains matching phone numbers across parties.
Law Reference: Mortgage fraud red flagsPractice all 400 questions free — no signup required.
Related questions on this topic
- 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:
- Which of the following is a classic red flag for possible mortgage fraud on an application?
- 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:
- Under ECOA, when a lender takes adverse action on an application, the applicant is generally entitled to:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against NMLS SAFE Mortgage Loan Originator National Test · How we review