HI State Law Assignment 3 of 3

Based on the following case study example and your understanding of the course material you just reviewed, please answer the following multiple choice questions in the Comments Section below.

Tom has been a licensed MLO working for a lending company called S & L Associates for about a year now. And, over that time, Tom has been steadily locking down his own methods for closing loans. Let’s look at one of his latest transactions as an example.

A borrower named Claire comes to Tom for a mortgage loan. She was referred to him by her real estate agent Patricia—whom Tom has worked with quite a few times. Tom takes Claire’s application and sends her on her way.

Looking over her application, though, Tom sees that Claire forgot to write down her annual income. Thinking back, Tom realizes that they were talking a bit while she was filling out the application, about the home she is trying to buy and how it had three bedrooms that she didn’t know if she would have enough furniture to fill.

Nevertheless, she walked off without putting the income figure on her application. Tom knows that, given the volume of loans right now, it’s going to be a little tight time-wise submitting Claire’s application and getting the appraisal done, etc., by the projected closing date. And, what’s more, he has scheduled a remote hiking trip for the following week, so Tom will be out of cell phone range and away from the Internet.

So, Tom racks his brain and remembers that Claire said that she made $70,000 per year. So, he writes it in, and gets the materials ready for underwriting. 

While he is gone, Tom asks his buddy and co-worker Scott to look after Claire’s file because Tom will be out of cell phone range and away from Internet access. In exchange for his help, Tom will pay Scott $200 out of the loan commission – just for keeping Claire’s loan on track.

Scott does not notice much of anything about any loans files – including Claire’s – because, after fifteen years as an MLO, for the first time, Scott’s license has not been renewed! In scrambling to deal with reinstating his license, Scott forgets to keep tabs on Claire’s loan.

Nevertheless, a few weeks later, Claire’s loan is approved and they go on to close on time.

And, even though he didn’t really do anything for Claire’s loan, Tom decides to honor his promise to give Scott the $200 bonus for helping out with Claire’s file. After all, Scott really needs the cash right now.

A year later, seeing that interest rates have dropped significantly, Tom contacts Claire about possibly refinancing her mortgage. After two weeks of phone tag, in which Tom lets Claire know that the rates could swing back up, she finally decides to come in and talk about a refinance.

Sure enough, by the time Claire gets in to Tom’s office, the rates aren’t quite as good as they were when he originally contacted her. Even so, after running the numbers, Tom finds that Claire will still save $85 per month on her mortgage payment with the refi! So, Claire applies to refinance her mortgage (including her correct annual income and length of employment, this time) and is approved.   Based on what you have just read please answer the following questions:

1. What did Tom do wrong regarding Claire’s original loan application?

A. Tom had Claire sign in the wrong color ink

B. Tom had Claire sign while there was still a blank field for where annual income went

C. Tom had Claire sign unnecessary documents

D. Tom did nothing wrong

2.    What, if anything, did Scott do wrong in this situation?

A. He wasn’t licensed as an MLO while watching after Claire’s loan, therefore should not receive any commission from the loan

B. He asked for too much money from Tom to watch over the loan

C. He misquoted the rate that Claire would be receiving

D. Scott really did nothing wrong in this situation

3.  Did Tom actually misrepresent the rate he quoted Claire at when she refinanced?

A. Yes, he told her what the rate would be on the phone, yet the rate she actually received was higher

B. Yes, he knew the rates were going to go up, but neglected to tell her

C. No, he explained what the rates where at the time of their conversation, and also told her they could potentially increase, nor did he use an advertisement when dealing with Claire

4.   Did Tom break any laws by refinancing Claire’s loan?

A. Yes, he advertised a specific rate to her and then didn’t give her that rate when she was ready to refinance

B. Yes, he neglected to warn her that rates could swing back up

C. No, Tom did not break any laws while refinancing Claire’s loan

Students should post directly to the Blog!  If you have any problems posting your assignment to the Blog (due to firewall issues etc.), you may send your answer directly to the instructor via email at oil@mymortgagetrainer.com 

You may return to your course after you complete the assignment.