Ethics · 18% of the SAFE exammedium
Correct answer: Request documentation verifying the source of the large deposit before proceeding
Unexplained large deposits are a recognized red flag for potential asset fraud or money laundering. The MLO must request documentation verifying the source of the deposit before proceeding — this is consistent with both underwriting standards and BSA/AML compliance obligations. Closing the loan without investigation ignores clear warning signs and could implicate the MLO in fraud. Advising the borrower to open a new account is itself potentially fraudulent and would violate ethical and legal obligations. Simply noting the discrepancy without acting on it does not fulfill the MLO's duty to verify information or report suspicious activity.
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