Finance
A Washington lender 'red flags' a transaction where the buyer's earnest money deposit is $50,000 but the bank statement provided shows only $5,000. This inconsistency indicates potential:
AAn earnest money loan from a family member
BMortgage fraud or misrepresentation of assets✓ Correct
CA legitimate cash gift from family
DAn error that can be corrected with a revised bank statement
Explanation
Significant discrepancies between stated funds and documented assets are a major red flag for mortgage fraud. Lenders are required to document the source of all funds used in a transaction, and undisclosed loans for earnest money can constitute fraud.
Related Washington Finance Questions
- In Washington, a 'non-recourse loan' means that if the borrower defaults:
- A Washington mortgage that requires a large lump-sum payment at the end of the loan term is called a:
- A Washington borrower is denied a mortgage loan. Under ECOA and Regulation B, the lender must:
- Washington's Home Equity Loan Consumer Protection Act provides borrowers with additional protections for:
- A Washington lender approves a loan based on an appraised value of $520,000 at 80% LTV. The purchase price is $535,000. The maximum loan amount is based on:
- In Washington, a 'wraparound mortgage' involves:
- In Washington, a buyer who makes a down payment of less than 20% on a conventional loan is typically required to pay PMI, which protects:
- Under ECOA (Equal Credit Opportunity Act), a Washington lender may NOT deny credit based on:
Practice More Washington Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Washington Quiz →