Certified Mortgage Advisor (CMA)

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A client is struggling to meet the income requirements for a loan. They tell their Certified Mortgage Advisor (CMA) that they plan to temporarily deposit a large sum of money from a personal loan into their bank account and have a relative sign a gift letter stating it does not need to be repaid. What is the CMA's most ethical and legally sound response?

Advise the client that misrepresenting the source of funds constitutes mortgage fraud and refuse to proceed with the application in that manner. Suggest the client wait until the funds have been 'seasoned' in their bank account for at least 60 days before applying. Proceed with the application but make a private note in the file about the source of the funds for internal records only. Provide the client with a standard gift letter template and advise them to have the relative sign it.

Correct Answer:

Advise the client that misrepresenting the source of funds constitutes mortgage fraud and refuse to proceed with the application in that manner.

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