EthicsQuestion 329 of 400
Which combination on a purchase file is the STRONGEST red flag for occupancy fraud?
a.The borrower currently rents and is buying a first home to live in
b.The subject property is near the borrower's job
c.The borrower already owns and occupies a nearby home of similar value
d.The 'owner-occupied' subject property is hundreds of miles from the borrower's job and existing residence
Explanation
An 'owner-occupied' property located far from the borrower's job and current home strongly suggests it will not truly be occupied, a classic occupancy-fraud red flag. Renting before a first purchase, buying near work, and owning a similar nearby home are consistent with legitimate occupancy plans.
Law Reference: Mortgage fraud red flagsPractice all 400 questions free — no signup required.
Related questions on this topic
- An applicant who uses a wheelchair is told the lender 'doesn't really do loans for people who can't work full-time,' though the applicant has ample verified disability and investment income. This likely violates the Fair Housing Act and ECOA by discriminating on the basis of:
- Which arrangement would MOST likely violate the Loan Originator Compensation Rule?
- An affiliated business arrangement (where a broker refers borrowers to a title company it partly owns) can be permissible under RESPA only if:
- The core purpose of consumer protection laws like UDAAP in mortgage lending is to:
- An agent tells homeowners 'you should sell now before more minority families move in and prices drop,' hoping to profit from panic sales. This illegal practice is:
- An originator wants to email a borrower's full loan file, including SSN and bank data, over an unsecured public connection. The best practice under GLBA safeguards is to:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against NMLS SAFE Mortgage Loan Originator National Test · How we review