Mortgage Broker Licensing Practice Exam · Question
A mortgage agent discovers a discrepancy in a client's income documents that appears to be fraudulent. What is their ethical and legal obligation?
Mortgage professionals have a strict obligation to report suspicious activities, including potential fraud, to their principal broker and, if it meets the crite
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Question: A mortgage agent discovers a discrepancy in a client's income documents that appears to be fraudulent. What is their ethical and legal obligation?
Answer options:
- To ignore it if the client seems otherwise trustworthy.
- To advise the client to correct the documents and proceed with the application. ✅ To report the suspicion to their principal broker and potentially FINTRAC, and cease involvement if the fraud is confirmed or unaddressed.
- To approve the application quickly before the discrepancy is noticed.
Correct answer: To report the suspicion to their principal broker and potentially FINTRAC, and cease involvement if the fraud is confirmed or unaddressed.
Explanation: Mortgage professionals have a strict obligation to report suspicious activities, including potential fraud, to their principal broker and, if it meets the criteria for money laundering/terrorist financing, to FINTRAC. Failing to do so would be a breach of regulatory and ethical duties.
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Related Questions
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Question explanations
- What is the typical time frame for a mortgage agent to provide the required disclosure statement to a client?
- Funds received from a client or investor that the brokerage holds on their behalf must be deposited into:
- Ontario mortgage agents must complete which of the following at each licence renewal?
- Which entity is responsible for licensing and regulating mortgage brokers and agents in Ontario?
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