Arizona License LawIntermediateArizona Exam
Under Arizona law, when a real estate licensee discovers that a buyer client has provided false information on a mortgage application, the licensee should:
AHelp the buyer amend the application before submission, since correcting false information before the lender relies on it is not considered participation in mortgage fraud
BNot participate in or assist with the fraud, and may have a duty to withdraw from the transaction or report the fraud to appropriate authoritiesCorrect
CMaintain confidentiality as required by their fiduciary duty to the buyer client and proceed with the transaction without disclosing the discrepancy to the lender
DAsk the seller to reduce the purchase price to match the buyer's actual qualifying income, since any price reduction that enables a legitimate transaction is permissible
Why Not participate in or assist with the fraud, and may have a duty to withdraw from the transaction or report the fraud to appropriate authorities Is Correct
Answer B: Not participate in or assist with the fraud, and may have a duty to withdraw from the transaction or report the fraud to appropriate authorities
Mortgage fraud is a federal crime. An Arizona real estate licensee who assists or remains silent about mortgage fraud is potentially criminally liable as an accessory.
Key Arizona License Law Terms in This Question
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
State-Specific Concepts
License Law
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