Ben and Amy Geller have found their dream home in a suburb of Portland, Oregon,

Question

Ben and Amy Geller have found their dream home in a suburb of Portland, Oregon, and visit Western Meadow Mortgages (WMM) to obtain a loan. There, they meet Doug Burke, a loan originator who claims over ten years of experience in the industry. He explains that he used to work as a registered mortgage loan originator for a national bank, but left several years ago to work for WMM, a state-licensed mortgage company founded by his old college buddy. Fortunately, he says, he does not have to “jump through licensing hoops,” because he is a registered loan originator, making him exempt from the state’s licensing and education requirements.  

Doug tells the Gellers that he can help them to obtain the mortgage loan they need to purchase their home. They fill out an application, and he offers them a 30-year fixed-rate loan with the “standard features” of a 1% prepayment penalty in the first three years. He also explains that the lender reserves the right to refuse to accept early repayment. Ben and Amy decide to sleep on the offer, and tell Doug that they will get back to him the next day.

List two violations that Doug has committed in his dealings with Ben and Amy.

Explanation / Answer

Dog has following statements in the below conversation of mortagages loan.

Dog's statement in the conversation :

1.Doug tells the Gellers that he can help them to obtain the mortgage loan they need to purchase their home....

Violated

Mortagage loan can not be given for home purchase. This mortagage loan can be given for home rework or renovation purposes only. Hence this statement is violated by Doug. There is a separate type of loan for home purchase and it is called Home Loan. So the home loan is for Home purchae and Mortagage loan is for home upgradation or renovation purposes.

2. He also explains that the lender reserves the right to refuse to accept early repayment. ..Violated Statement : The lender do not have the right to refuse the early replayement of the loan amount.The lender needs to accept the loan amount in the repayment process. The lender can not aks to wait the loan taker. The loan needs to be get complete upon full payment of remaining loan amount.

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